A primer on vertical farming, which is growing like a weed

The world of vertical farming is…sigh…growing.

Historically, agriculture was an outdoor business, with farmers only able to grow certain crops in certain climates at certain times of the year—vertical farming aims to upend that millenniums-old truth. Vertical farms typically use a combination of agricultural techniques and technology, from IoT sensors to algorithms, to create controlled indoor settings capable of growing foods year-round, sometimes at a higher output per square foot than traditional farms.

In 2021, global indoor farming startups raised $1.6 billion across 70 deals, per Pitchbook—that’s ~86% more money than the sector raised in 2020.

And the space has already seen one megadeal this year: Plenty netted $400 million just last week, which it claims is the largest funding round ever for an indoor farming company, and struck a strategic partnership with Walmart. Two weeks ago, Upward Farms, a Brooklyn-based startup, announced plans to build a new 250,000-square-foot farm in eastern Pennsylvania. When the facility opens in 2023, Upward says it will be the largest indoor farm in the world, though it wouldn’t disclose the farm’s expected capacity.

“If we think about the problems of our generation—whether it’s climate change or global pandemics—there’s so many issues that vertical farming can help address—not solve by themselves, but help address.” AeroFarms chief of staff Jason Ginsberg told Emerging Tech Brew.

The Great Indoors

Vertical farms generally come in three different flavors: hydroponics, aquaponics, or aeroponics.

Hydroponics, used by growers like Bowery Farming, relies on supplying plants with nutrient-rich water in a closed system, without the use of soil.

Aquaponics, which is used by Upward Farms, is an offshoot of hydroponics that relies on a closed-loop system in which aquatic animals, like fish, produce waste that’s converted into nutrients and soil used to feed plants. Upward Farms CEO and co-founder Jason Green told us that the company’s microgreens produce between 35 to 50 crop turns a year. The company also sells its fish to Greenpoint Fish and Lobster in Brooklyn.

“Nature’s figured this stuff out,” Green said. “Nature has the capacity, at a genetic level, to produce the growth factors that plants need and to mobilize nutrients and to fight diseases and all of that. The genes are out there; it’s just a matter of developing the processes, so that the plants are colonized by the microbes that can do those functions.”

Aeroponics, which is the bread and butter of New Jersey-based AeroFarms, mists hanging plants with nutrient-rich water, and is less water-intensive than the other two methods. Aeroponic farms can use up to 90% less water than traditional farms, according to the National Center for Appropriate Technology.

Green said there are “three necessary things” needed to succeed in vertical farming: hardware that monitors plants and operates at scale; software to control the light, temperature, and humidity of the plants while growing; and strong biology to make sure the plants themselves are healthy and get the nutrients and attention they need.

For its part, AeroFarms has a “multidisciplinary team of 200+ experts representing fields like plant science, horticulture, engineering, software development, and research and development,” Ginsberg said, all working to maximize the yield of its crops without sacrificing quality.

Founded in 2004, AeroFarms has since expanded beyond its Newark, New Jersey, HQ farm, and broke ground on a new 136,000-square-foot farm in Danville, Virginia, in April 2021. AeroFarms says the facility is scheduled to open in Q2 2022, but it did not disclose the farm’s expected capacity.

AeroFarms says it has grown up to 550 different varieties of crops, mostly in the leafy greens category. The company has also branched into fruits like strawberries and blueberries, and has entered a partnership with AB InBev where it grows hops for its beer.

Its facilities utilize a combination of climate-control tech, machine-vision and machine-learning algorithms to manage and water plants, LED lighting, and nutrient-enhanced water in its facilities. Ginsberg said the company averages 26 full-cycle crop turns of its leafy greens a year, and 90 turns of its microgreens vegetables.

Looking ahead…Large vertical farm companies like Plenty, AeroFarms, and Upward Farms are already selling their products to big retailers like Walmart, Whole Foods, Stop & Shop, and Shop-Rite. Walmart spokesperson Tricia Moriarty told us the company plans to buy leafy greens from Plenty’s Los Angeles farm “for all of its California stores,” once the farm opens in the second half of 2022, but Walmart will still source the “vast majority” of its produce from traditional farming.

By 2026, vertical farming could become a ~$20 billion market worldwide, according to BIS Research. For context, US farmers accounted for $136 billion, or 0.6%, of US GDP in 2019, per the USDA.