Lighting the Path Ahead: A Dialogue on Vertical Farming Challenges and Opportunities

In a recent discussion, industry veterans Sonia Lo, a board member at urban-gro & CEO at unfold.ag, and Randy Frederick, a strategic consultant at urban-gro, explored the role of controlled environment agriculture (CEA) in this transformative change, addressing the unique challenges and future opportunities.

The discussion ranged from lighting choices in CEA facilities to the genetic constraints of specific crops in vertical systems. The experts emphasized the importance of balancing technology and operational excellence and the need for a holistic approach that addresses market demands.

Looking ahead, they underscored the need for explicit business models, regulatory support, and well-defined market routes for successful vertical farming ventures. They envisioned growth opportunities extending from urban areas and highlighted the potential role of vertical farming in aiding reforestation efforts.

Considerations In The Construction Of A Vertical Farm

One of the primary differentiators in CEA facilities is lighting. Sonia Lo emphasized that growers can choose between mid-cycle or cutting-edge lighting innovations, with the latter commanding a premium due to their higher effectiveness. Facility construction typically spans 5 to 10 years, so growers must consider the amortization schedule when selecting lighting solutions. Additionally, Sonia highlighted the importance of testing lights for future-forward capabilities during the build-out phase.

When constructing CEA facilities, choosing vertical and horizontal setups impacts the components involved. While tubs, trays, and irrigation systems remain consistent across both approaches, Sonia suggested that horizontal stack tray systems are more suitable for certain crops, such as vine crops. The genetics of these crops currently limit their growth beyond lab scale in vertical farms.

The interview also explored the role of vertical farming techniques over time. Sonia Lo shared her experience at Crop One, where they achieved unit-level profitability by employing multi-cutting techniques for leafy greens. Multi-cutting involves establishing a root mass and regrowing from the same root ball, when done correctly, enhances yield. However, she emphasized that successfully implementing multi-cutting requires extensive screening and trialing to identify suitable genetics and optimize irrigation formulas.

Regarding the scalability of vertical farms, Sonia and Randy stressed the significance of a solid business plan and management team. They noted that more than relying solely on technology as a value proposition is required. Instead, successful vertical farming ventures balance technology and practicality, leveraging the former to grow and develop products while focusing on operational excellence and meeting market demands.

When asked about common challenges growers face in building and operating CEA facilities, Randy Frederick emphasized the importance of a strong management team and a well-thought-out business plan. He emphasized shifting from a technology-centric approach to a more holistic strategy demonstrating practicality and economic viability. Sonia Lo concurred that the industry is evolving, with investors now seeking operational excellence rather than solely focusing on flashy technologies.

The Future of Vertical Farms: Identifying Opportunities and Challenges

With its potential to address food security concerns, reduce environmental impact, and provide fresh produce to urban areas, this innovative farming method has captured the interest of entrepreneurs, investors, and policymakers alike.

Sonia Lo emphasized the importance of continued investment in the vertical farming sector. She acknowledged the sector's significance in the agricultural infrastructure and emphasized the need for thoughtful investment decisions prioritizing profitability and understanding the market. Lo pointed out that while the industry is experiencing a period of consolidation, there are still ample growth opportunities.

When discussing the potential pitfalls in vertical farming ventures, Lo noted that industry entrepreneurs generally understand the challenges and are prepared for the hard work required. She highlighted the need for a transparent business model and a well-defined route to market to ensure success. Lo also emphasized the importance of identifying the customer base and meeting their needs, as different markets have varying demands and price constraints.

The conversation then shifted to the regulatory aspects of vertical farming. Sonia Lo mentioned that while there may not be significant regulatory loopholes, governments are recognizing the value of vertical farming and exploring avenues for support. For example, research and development tax credits and other financial instruments are available in the United States to aid vertical farming initiatives. Lo predicted that government support for vertical farming would continue to evolve as the industry becomes an integral part of the agricultural landscape.

The experts then delved into the potential limits and prospects of vertical farming. Lo expressed her belief that there are vast untapped opportunities within the sector. She envisioned concentric circles of growth radiating from urban areas, with various vertical farms addressing different markets.

The innermost circle represents small-scale systems designed for avid gardeners or individuals interested in growing their food. Moving outward, the experts discussed the potential for compact, high-yield farms within suburban or urban areas, what she called the "Starbucks radius." These farms would cater to local communities and offer fresh produce with reduced transportation requirements.

Lo also highlighted the potential of vertical farming as nurseries for tree saplings, aiding reforestation efforts and regenerative farming. Vertical farms can enhance sapling growth and survival rates by providing an optimal environment.

Another concentric circle emphasized by Lo and Frederick is the established greenhouse clusters within a 400-mile radius of urban centers. These farms, often using Dutch Glass House technology, are already well-known and provide leafy greens efficiently. However, alternative form factors and distribution models might be more appropriate for specific crops like soft fruit.

The final circle discussed was municipal-level scale vertical farms integrated into the energy infrastructure. These farms could utilize orphaned energy assets or be part of new construction projects. With a focus on food security, these large-scale farms could grow crops like rice and wheat, necessitating genetic modifications to adapt to the vertical farming environment.

What The Future Holds

Lo acknowledged the current economic climate shaped by the COVID-19 pandemic, with governments seeking to tighten their budgets and scale down spending. However, she emphasized the need for governments to adopt a generational perspective when investing in transformative infrastructure like vertical farming. Governments can ensure food security for future generations by investing long-term.

The discussion then turned to the potential of carbon capture in vertical farming. While container farms have been used in Europe to address high CO2 concentrations in cities and provide fresh produce to local neighborhoods, Lo expressed concerns about their energy-intensive nature. She highlighted the importance of utilizing waste heat and the built environment for energy generation in vertical farms. However, she noted that influential form factors and technologies for carbon absorption and issuing renewable energy credits are yet to be readily available.

When asked about the relationship between vertical farming and traditional farming methods, Lo emphasized that certain crops will likely transition substantially to vertical farming due to climate volatility and labor shortages. Soft berries like strawberries and raspberries, smaller-sized melons, and larger-sized tomatoes were identified as potential candidates for vertical farming. Vertical farms’ efficiency and controlled environment make them well-suited for such crops, which may need to be more practical and economically viable to grow in traditional open fields.

Frederick added that conventional farmers are increasingly interested in vertical farming to supplement their existing practices. Climate change impacts, water savings, and the urgency to address droughts are driving the industry-wide recognition of the benefits of vertical farming. While traditional farming methods will remain valuable, the growing sense of urgency and the need for sustainable solutions push farmers to explore and embrace vertical farming.

The experts agreed that vertical farming has the potential to revolutionize agriculture and address critical challenges such as food security and climate change. However, they also highlighted the importance of continued research, investment, and technological advancements to unlock the potential of vertical farming fully.