Rethinking Global Food Production

How Vertical Farming Can Overcome Challenges to Feed the World Sustainably

Climate change, severe weather, natural disasters, and conflict are significantly disrupting global food supply chains and reducing food security. With the need to produce 70% more food by 2050 to support the growing global population, the pressure is on. However, the available farmland is decreasing alarmingly; at the current erosion rates, only 10% of all farmable soil will remain by 2050.

Vertical farming is a revolutionary approach to growing plants indoors, offering significantly higher yields than conventional field farming. For example, Plenty, an indoor vertical farming company, achieves up to 350 times more yield per acre than traditional farming while using only a fraction of the land and water. Vertical farming can provide a steady supply of fresh fruits and vegetables year-round, anywhere in the world, meeting the needs that greenhouses and field agriculture cannot.

Despite its potential to transform food production and meet the demand for year-round availability of seasonal crops, vertical farming faces criticism and negative headlines. However, these are often misunderstandings of the industry’s current state.

Vertical farming is at a critical juncture. This is the end of the beginning for indoor agriculture, not the beginning of the end. Shakeouts are a natural part of the maturity cycle for emerging sectors as businesses transition from startup to scale-up, especially in high-tech, high-innovation industries like indoor agriculture. A few companies will emerge as leaders by cracking the code of successful vertical farming.

Two critical factors will determine the success of vertical farming: proving its economics and maturing its growth funding.

One fundamental difference among vertical farming companies is their growing methods. Most use a ‘stacked-tray vertical’ approach, where plants grow horizontally in trays stacked vertically. While this utilizes floor-to-ceiling space better than greenhouses, it has significant flaws.

The biggest issue with stacked trays is heat entrapment, which limits the intensity of lights they can use without damaging the plants. Light is crucial for photosynthesis and plant growth, so limiting light reduces yield, leading to less profitable farms. Stacked tray systems also struggle to grow crops outside of leafy greens at commercial scales, limiting their impact on the food system.

In contrast, a ‘true’ vertical approach maximizes plant density in three-dimensional space by growing on large, uninterrupted vertical planes. This architecture allows the use of ultra-intense lighting, facilitated by efficient air circulation in vertical aisles. Increased plant density and intense lighting drive exponentially greater yields. A true vertical system is modular and flexible, supporting a wide variety of plants and bringing crop diversity to vertical farming. This is how Plenty can grow over 50 different crops in its vertical growing system.

Vertical farming must diversify beyond leafy greens to address unmet market demand and support food and nutrition security. Growing more caloric crops at commercial scales and competitive prices with field-grown counterparts is essential.

Indoor vertical farming must scale massively to impact the global food supply. As the industry transitions from startup to scale-up, growing methods that don’t meet basic unit economics will be phased out. While this will lead to more failures in the short term, it will also create opportunities for successful companies to increase the fresh food supply.

One of the greatest challenges for vertical farming is its capital-intensive nature. Scaling infrastructure-heavy businesses requires substantial funding. With agritech VC funding drying up, the industry must find new ways to finance growth. The solution lies in accessing more efficient capital through asset-level financing, treating vertical farms as assets rather than seeking primarily company-level financing.

Potential financing partners include real estate investment trusts (REITs), which provide capital for farm sites and buildings, and farm-location financing from the public sector via grants, incentives, and policy. Public-private collaboration is another avenue. Vertical farms offer local food production and green jobs to communities, and states should compete to attract these farms with incentives and tax legislation. Public-private partnerships are essential to shaping policies that support agritech innovation while achieving social impact goals, such as providing healthy food to underserved communities.

To counter negative headlines about failed vertical farms, de-risking investment is crucial. Vertical farms need to demonstrate profitability and consistent, predictable returns, which is challenging for those using the ‘stacked tray’ approach. With increased yields and agreements with major grocery stores, Plenty has secured low-cost financing to invest in its growth.

Agriculture remains one of the few industries still primarily conducted outdoors. As we face the impacts of climate change on the global food supply, moving more food production indoors to create supply stability is imperative. Scaling up this effort rapidly is necessary. By leading with innovation and securing funding for growth, vertical farming can change the future of food, making it more sustainable and resilient.

In conclusion, while the vertical farming industry is undergoing significant changes, these are part of its natural evolution. With continued innovation and strategic financing, vertical farming has the potential to address global food security challenges and support a healthier, more sustainable world.