The promise of vertical indoor farming (VIF) has been decades in the making. The concept of a vertical food system was first proposed in a Columbia University classroom in 1999, where it was envisaged as a skyscraper capable of feeding thousands of people.1 Today, vertical farming is seen as a way to plug gaps in traditional agriculture, help countries meet rising consumer demand, and protect food supply chains from disruptions brought on by crises—a necessity made all too clear in the COVID-19 era.
The impending food crisis in numbers
By 2050, the world’s population is expected to reach nearly 10 billion, and food production will need to double to meet demand.2 Today, however, we simply do not have the resources to stay on that trajectory:
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Agriculture already accounts for 70% of global water use, and it’s predicted that by 2025, half the population will be impacted by water scarcity.3
Agriculture is also a significant contributor to climate change, producing almost 20 percent of total greenhouse gas emissions.4
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Climate change is depleting the arable land necessary for crop production at an alarming rate, with one third of the earth already degraded.5
Humans waste 1.3 billion tons of food each year, largely as a result of logistical challenges.6
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In the face of these conflicting challenges, however, there is hope. A food production system that uses nutrient-rich growth systems instead of soil, artificial light instead of the sun, and indoor controlled environments near communities instead of vast swathes of land offers an attractive, sustainable solution.
Vertical indoor farming resolves demand, degradation and disruption
VIF is an instant driver of more sustainable food production. VIF systems leverage data to produce food three times faster than traditional farming methods while using up to 95 percent less water.7 A vertically farmed acre can produce the equivalent of four to six soil-based acres, depending on the crop, alleviating pressure on arable land.8 In addition, VIF production sites can be set up close to urban populations, reducing transport emissions and minimizing supply chain risks. Together, these savings could drive environmental stewardship and help advance several of the UN’s sustainable development goals.9
The consumer experience can also be improved, with VIF produce providing superior flavor, more nutrients and an extended shelf life, helping to reduce food wastage while clearly meeting the demand for more environmentally-conscious consumption.
A growth market to meet growing demand
There is certainly interest in these types of solutions. The controlled environment agriculture (CEA) market size, including VIF, was approximately $106 billion in 2017, and conservative projections show a $171 billion market by 2026.10 COVID-19 and the ensuing supply chain disruption is likely to increase those projections further as populations work to defend against future crises. Pair this with growing consumer demand for local, sustainable, pesticide-free and fresh food and the sky is, literally, the limit.
COVID-19 has also underscored the need for rapid pharmaceutical development, and VIF is proving an innovative tool for delivering gram quantities of high-quality, monoclonal antibodies, vaccines, bioinks and other proteins quickly and efficiently—potentially increasing the VIF market size even further. And this in not just theoretical: In March 2020, for example, start-up iBio announced it was developing SARS-CoV-2 vaccine candidates using VIF.11
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The potential of VIF to address increasing food demand, water scarcity, consumer sustainability preferences and climate change is enormous.
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Bringing the AgriTech stack under one roof
While VIF has huge growth potential, there are many challenges that face the industry. These include high capital expenditure costs—with an estimated $4 million of up-front investment needed for a 30,000 square-foot farm, energy consumption, a lack of skilled manpower, the need to diversify crops on a large scale, and other as yet unknown factors that may arise from growing crops indoors.12 In addition, the disconnect between pain points and technology solutions is vast, with countless technologies used across different aspects of the farming process that no one is owning, connecting or leading. VIF needs a common language and end-to-end solutions that enable integration across the system.
There are three key areas that companies must invest in to unify VIF practices and prepare the industry to meet demand and tap into growth opportunities: technology and innovation, crop diversity and supply chain collaboration.
Technology and innovation
The digitalization of food production is ripe with possibilities. Data analytics, artificial intelligence, robotics and machine learning can increase efficiencies and grow profits. Digital technology can be used to measure, calculate and deconstruct the optimal micro-needs of a plant, and determine its water, food and light requirements, disease resistance and corresponding yield. Farmers can use that information to optimize production and replicate the same yield every time. Automation and robotics can also drive greater precision in indoor farming practices and reduce the need for manpower—as an example, Intelligent Growth Solutions has used robotics to reduce labor costs by 80%.13 In short, technology removes uncertainty and maximizes yield.
Investment in consolidating and integrating the vast and complicated landscape of agtech tools will be key to realizing these gains. The VIF industry needs a common technology platform to provide farmers with a 360-degree view of operations, and more integration of tools and services from disparate companies.
Today, only a small subset of seeds has been bred to grow indoors. For the most part, leafy greens, herbs and flowering plants have been used to demonstrate VIF advances. Now there is an opportunity to expand to more crops, including fruit and root, pod and seed vegetables. But investment in breeding more types of crop seeds and growing methodologies is needed. Seed genetics offers a significant opportunity for crop science companies, allowing them to target factors such as taste, flavor, texture, yield and nutritional value. Bayer and investment company Temasek launched Unfold in 2020, a start-up aimed at developing new vegetable seed varieties optimized for vertical indoor farms.14
Supply chain collaboration and the broader ecosystem
Driving greater cooperation between disparate but connected nodes of the supply chain—including seed breeders, technology companies, utilities, farms, distributors, grocers and the end consumer—will enable more transparency and shared learning (or “OpenAg”—referring to open/shared agriculture learnings) and ultimately, a more resilient supply chain that is optimized from end-to-end. More can be enabled with support from key stakeholders of the broader ecosystem, such as communities, governments and investors, that all can gain from advancements in this area.
Scaling for growth, for future generations
The potential of VIF to address increasing food demand, water scarcity, consumer sustainability preferences and climate change is enormous. But it’s clear that the path to capturing growth needs investment, research and partnerships. Today, VIF is made up of a continuous but disconnected flow of innovations. The industry must regroup and move forward with a sustainable, consolidated and collaborative strategy centered on end-to-end solutions that prioritize the best of technology and human ingenuity. Ecosystem partners, such as gene-editing and seed-growing start-ups; tech partnerships like the Boomi low-code development platform; and artificial intelligence, machine learning and quantum computing-backed platforms for service integration will, together, dramatically improve VIF outcomes.15
The time is now to start uniting the food system of seed breeders, technology companies, utilities, farms, distributors, grocers and the broader ecosystem through innovation and collaboration, and by doing so, the VIF industry could bring sustainable farming to communities, and hope to our planet.
This is #NextGenFarming.
Special thanks to Accenture’s Jay Corwin and Dorothy Vincent for their help on this blog.