Vertical Farming. Can it change the global food production landscape?

It is a known fact that the world’s population is rapidly increasing and becoming ever more urbanized. At the same time, people have never been so disconnected from their food sources. Agriculture uses a great deal of the water resources available and effluent runoff is a major problem. Vertical Farming means producing food in vertically stacked growing layers, and it seems to be a solution to address some of those problems we currently face.

Vertical Farms apply Controlled Environment Agriculture (CEA) techniques to some extent. CEA allows farmers to control many variables that influence crop growth and development, such as lighting, air and temperature control, and nutrient supply. Vertical Farms are closed production facilities that share a lot with manufacturing industries, which are constantly optimizing their processes.

The main advantages of Vertical Farms are year-round crop production, irrespective of external weather, predictable and stable yields, considerably shorter crop cycles, a highly diminished water consumption, minimal usage of pesticides or fungicides, a decreased growing area and the repurposing of urban buildings and unproductive spaces. Hydroponic, aeroponic or even aquaponic systems favour a clean and quick crop development while maintaining the resource usage to a minimum.

These advantages are clear; however, profitability is still difficult to achieve. Many new businesses suffer once their seed money dries up. Vertical Farming is still farming; therefore, the produce must be sold at the same price levels as products grown in an open field where the light, air, soil and water are almost free. Controlling each and every variable comes at a cost. The high capital and operational costs (electricity and labour) force companies to scale up in order to achieve profitability or focus on higher margin crops.

The possibility of being close to the point of consumption is another huge point in favour of Vertical Farms. There is a clear market tendency towards foods with a lower “mileage”, as well as organic produce. The lesser distance travelled not only guarantees freshness but is also a “green” selling point, saving CO2 emissions from shipping. In the US, for example, most of the greens consumed in New York City must cross the whole country, as they are produced in sunny California.

The Brazilian market does not share all the drivers that are strong in countries which have already adopted Vertical Farming commercially. Weather in Brazil allows year-round production, and the main producing areas are near to the huge cities like São Paulo or Rio de Janeiro. Trying to sell leafy greens in the open market at the same price level as open-field produce can be hard. However, business models that focus on scarcity, high value crops or medicinal compounds offer a huge opportunity which is yet to be explored.

As technologies keep evolving (like LED lighting did in recent years), costs will go down and efficiency will increase even further. This will allow Vertical Farms to be more profitable as they lower their production costs, and also diversify the crops produced. It is hard to predict whether Vertical Farms will help feed the world someday; however, the necessity for fresh, safe, dependable food will always exist. The Vertical Farming industry has a bright future ahead. This is just the start.