Inventing and scaling the world’s largest urban vertical farming network

Starting a new business is tough for any start-up, but building a company on an entirely new business concept presents a whole other level of challenges. In a conversation with McKinsey’s Jerome Königsfeld, Infarm CEO and cofounder Erez Galonska shares his passion and vision to change the way people eat and reflects on his learnings from bringing the Infarm food-production concept to 50 percent of the world’s largest food retailers.

Key insight #1: Setting up for success Organizations require a strong purpose to manage the hardships of business building.

Jerome Königsfeld: Today, Infarm is an international business with more than 900 employees operating across ten countries. Take us back to 2013, when you started the business together with Osnat Michaeli and your brother Guy Galonska. What was the motivation behind launching Infarm?

Erez Galonska biography

Erez Galonska is the cofounder and CEO of Infarm, an urban farming start-up based in Berlin. Prior to launching Infarm in 2013, Galonska spent time as a cinematographer and traveled extensively before finding his passion for growing sustainable food. He and his brother Guy Galonska built a hydroponic “pipe garden” in their house in Berlin in 2012, growing about 150 plants. Realizing there was a real need (and a demand) for sustainable food production in urban spaces, Infarm and its modular farming concept were born.

Erez Galonska: I have always been fascinated by self-sufficiency because, for me, it ultimately means freedom. So in late 2004, I started to explore what it really means to be self-sufficient. I looked at everything from how to become energy and water self-sufficient to growing my own food.

In 2005, I started traveling between different communities and was doing work in exchange for lodging. I did many types of manual work on farms, ranging from picking mangoes to growing vegetables. At the peak of this journey, I lived on a mountain in the Canary Islands and was living completely self-sufficiently.

During this time, I became obsessed with growing my own food and saw that it allowed me to try more interesting varieties that don’t make it through today’s industrialized supply chains. When I moved back to Berlin, I asked myself, “Why can’t I take my farming with me? Would it be possible to grow my own food without soil?” When I did my research on this topic, I encountered two things: 1) there was a group of people who already farmed without soil as part of a movement called hydroponics, and 2) I saw these utopian pictures of plant-covered skyscrapers in cities, which gave me confidence that I could change the way we source and eat food. This became the driving force to build Infarm.

Early on, my brother and I built our first hydroponic farm in my parents’ living room, growing large green basil. When this proved successful, we asked ourselves how we could turn this into a business.

Jerome Königsfeld: How did you set up your first commercial farm?

Erez Galonska: We spent a year researching; you have to imagine hydroponics as an umbrella for lots of different techniques that we had to learn about. The outcome of this was that, in late 2016, together with a set of designers, mechanical engineers, and craftsmen, we built our first commercial farm in Berlin in Neukölln.

This first commercial farm also helped us to attract exceptional talent who were inspired by our purpose. At our food lab, future employees could experience for themselves the potential of Infarm to change the way people eat: having access to fresh fruits and vegetables grown near the point of purchase without pesticides and customized to local diets. This shared purpose helped us through some early hardships, when we had little funding and could barely pay our first employees. Our purpose kept us motivated to keep going.

Jerome Königsfeld: How did you make your first customers aware of Infarm?

Erez Galonska: We installed farms in caravans and put them into Berlin’s Prinzessinnengarten, which is an urban gardening project. We held workshops educating people about urban farming, which created awareness and a community of followers around the Infarm concept.

Our first customer was somewhat unexpected: 25hours Hotel, an international hotel chain in Berlin. An architect visited our urban farm and was immediately excited to bring it to 25hours Hotel, an opportunity that we hadn’t thought of before. We visited the site, and then started doing research into how we could best bring our concept to the hotel chain. There had been success in growing plants on skyscraper rooftops, which gave us confidence that we could do the same with food production. We built a farm on the hotel’s rooftop and called it the Sky Farm. Word quickly spread, which helped us reach more customers.

Key insight #2: From pivoting to scale Once you’ve found product-market fit, rigorously double down on the opportunity and scale.

Jerome Königsfeld: When did you know that it was the right time to scale the business?

About Infarm

Erez Galonska, along with his brother Guy Galonska and Osnat Michaeli, founded Infarm in Berlin in 2013 to bring fresh, sustainable, locally grown produce to urban areas through a “vertical farming” approach, using no pesticides and a fraction of the land and water necessary in conventional farming. Infarm sets up modular farms throughout the urban environment in any available space to fulfill market demand, enabling cities to become self-sufficient in their food production while significantly improving the safety, quality, and environmental footprint of the food.

Infarm has more than 900 employees and operates in ten countries globally, with about 500,000 square feet in farming facilities and plans to reach five million square feet by 2025. Infarm has raised $400 million in total funding to date, enabling it to further invest in advanced engineering, software, and farming technology to continue to drive innovation in its fresh-food production and match the needs of retailers of any size in any location.

Erez Galonska: The CEO of one of the biggest wholesalers in Europe came to our Berlin food lab to experience the future of food. We had worked together with a designer to render one of our farms inside a retail store for a demo. When the CEO saw this, he presented us with a challenge: he would close a deal on the spot if we were able to bring the Infarm concept into his retail locations.

We accepted the challenge and built our first farm in a supermarket. After three months, we launched the world’s first cloud-connected farm, where we use smart devices to gather data from the farm and apply analytics technologies to improve growing conditions, essentially creating a self-learning farm. This enables us to perfect our growing recipes and improve the yield, quality, and nutritional value of the food grown. When a video of the “farm in the supermarket” was uploaded to YouTube, it went viral. The farm attracted more than seven million views, and we received requests, mostly from retailers around the world, to build connected farms in their stores.

Jerome Königsfeld: This was when you realized that you had achieved product-market fit?

Erez Galonska: Yes. Up until that point, we had been experimenting a lot. We had been working with many different types of clients like restaurants and hotels to determine who would benefit most from our technology and where we could create the biggest impact.

The pilot at the wholesaler supermarket proved that the concept of connected farms at supermarkets was a winning formula, which enabled us to rapidly scale. We rigorously doubled down on retailers, standardized our retailer approach, and can now set up operations in a new country within three months. Today our farms can be found in 50 percent of the world’s largest food retailers.

Jerome Königsfeld: What is the business model?

Erez Galonska: We call it “farming as a service.” Retailers sign a multiyear contract with us defining the capacity they require, and we then install the required Infarm modules to meet demand. Our farms are designed especially for urban spaces, ranging from formats that can fit in a typical fruit and vegetable aisle to those developed for our large-scale, high-capacity Growing Centers, containing individual farming units each capable of producing the equivalent of 10,000 square meters of produce. This allows us to easily scale production for retailers of any size, whether they are serving a neighborhood or a national retail network.

The Infarm modules remain our property. We receive income per harvested plant. Our employees take care of the farm, including installation, cultivation, harvesting, and maintenance. All farms are controlled remotely; Infarm employees visit farms as needed to plant new seeds.

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Key insight #3: Never lose sight of your north star To unlock future growth, an organization must be willing to change and adapt.

Jerome Königsfeld: How did you ensure that your organization could cope with fast-paced growth?

Erez Galonska: We combine strategic and operational aspects. First, you need to make sure that you define your north star and never lose sight of it. Our north star has always been to serve the world with fresh premium products across the full spectrum of vegetables. We reverse engineer to define what we need to work on today to achieve our mission.

To unlock scale, you need an offering that is replicable. One example of this is that we have a “playbook” for entering a new city that enables us to rapidly enter new markets and set up operations. The playbook contains everything from job descriptions, to the ratio of people to farms, to how you connect and plug in the farm.

In the first year, we installed our vertical farms in ten cities. Today, we set up in ten new cities in a quarter. And because we use the same playbook for every city, our approach improves over time as we apply our experiences and feedback to it. Additionally, we focus on product modularity. This means that, depending on customer needs, we can quickly assemble the right mix of hardware modules and then customize environmental conditions via the cloud. In this way, we have built a system that scales, without compromising on quality.

Another aspect is employee empowerment  and building a network of cells in the company, each with clear responsibilities. We actively encourage a test-and-try mentality with our employees, following agile principles. Across the entire Infarm organization, we employ a constant process of iterations and improvements. Processes and responsibilities are documented, in what we call the “Infarm Wikipedia,” which is accessible to all employees.

Jerome Königsfeld: How did your organizational setup change over time, as you scaled from three founders to more than 900 employees?

Erez Galonska: It’s constantly changing. When you’re growing so quickly, it’s vital that your systems and organization adapt. Every quarter we go through a “restructuring” process, rigorously challenging ourselves on what we need to change to unlock further growth and how we can best set up the organization for success. We define clear targets that we measure ourselves against and break down responsibilities to the individual employee level, making sure that every employee knows how they contribute to the targets and the overall company vision.

Key insight #4: Hardware becomes a commodity Software will differentiate farming as a service in the future.

Jerome Königsfeld: What is the next frontier in your product development? Are there any specific areas that you focus on?

Erez Galonska: Going forward, we will focus on the software side of the Infarm concept. In the long term, the actual farms will become a commodity business, and in fact we have already started to outsource the development of our hardware.

The majority of our future value will happen in the cloud. The “farmer in the cloud” is continuously fed with data, enabling it to learn and get smarter and determine what grain recipes work best and how much water, light, and nutrients to use.

These improvements will also help to make a significant environmental impact. Currently, our farming-as-a-service impact has helped to save more than ten million gallons of water and 600,000 square feet of land, while harvesting more than one million plants monthly and growing.

Jerome Königsfeld: What percentage of your staff works on product development?

Erez Galonska: We look a lot like an Internet of Things (IoT) company. About 10–15 percent of our people focus on product development, and then we have interdisciplinary teams of developers, plant scientists, engineers, and user-experience designers.

Jerome Königsfeld: How do you see the future of agriculture in general?

Erez Galonska: There is a massive transformation happening in agriculture right now. Technology and software allow farmers to use fewer resources to generate more yield. This is becoming mainstream.

Agriculture, from our perspective, is returning to its roots. I think that one of the biggest powers of technology is that we can again grow food where it is consumed.

A second big trend is the personalization of farming. Today, agriculture operates according to a push concept. Companies cultivate the crop and then try to get it to the consumers. At Infarm, we do the reverse, and this is where it becomes interesting. We leverage data to understand customer preferences and then grow the crop accordingly—we call it “personalized farming.” The future will be micro farms that cultivate crops based on households’ taste profiles, diets, and health needs.

We’re part of this movement of bringing farming closer to the consumer, all while being more resource efficient as well.

Jerome Königsfeld is an associate partner in McKinsey’s Cologne office.

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May 18, 2020

A Business Framework For Vertical Farming: An Interview With Emiel Wubben

Photo Credit: High Tech Accelerator

Photo Credit: High Tech Accelerator

Written By: Michele Butturini

What is a business framework and why is it needed for vertical farming? Interview with Emiel Wubben. Urban Greenhouses and the future of food: A 3 part blog series inspired by this book .

Emiel Wubben is an associate professor of strategic management at Wageningen University and specializes in agrifood clusters & circular business. His prime interest is about: “strategizing business transitions towards a more sustainable biobased and circular economy.”

The first time I heard about the work of Emiel Wubben was during VertiFarm2019 , where he gave the presentation entitled “Where is the business? A study into the key variables of the Vertical Farm Business Framework.” The research paper in which that presentation was based on, will soon appear in the European Journal of Horticultural Science . Wubben kindly allowed me to read the submitted version of the research paper and on that, I based the questions for this interview.

What exactly is a business framework and why it is needed for vertical farming?

A business framework, in this case, is the list of key items that are considered important from a business perspective by the insiders. The development of a business framework for vertical farms was taken as the objective of this exploratory research because more substantial concepts, such as the “ business model canvas ”, could not be applied. We wanted to know the items of prime importance in strategic decision making on a vertical farm. "Business framework" is not a standard term. For example, "business model" is a standard term, but you often need more information to make one (i.e. capital expenditures, operating costs, expected revenues): this is something that was not possible in the case of vertical farming. There are three reasons why this was not possible: 

1 - the industry is too fragmented with a wide variety of vertical farming operation types

2 - nobody wants to share information considered competitively sensitive;

3 - lack of history, there is not enough longitudinal data .

This partially answers my second question: What is missing to decipher if vertical farming is a viable business?

Indeed, the 3 points I just mentioned. I would like to make a clarification concerning point 1, namely the excessive variety: there are a variety of types of vertical farms, and also a variety of contexts with different local market prices, climates, available partners, demand preferences, etc. Furthermore, about point 3, if there is a track record, and there's no plurality, no repetition, then you cannot build distributions of results to do a meaningful analysis. And, as I said in point 2, all this data is often confidential because vertical farming companies try to keep the monopoly on their data. And when the lab is sufficiently big (that’s not often the case), it does not mirror a real-life setting with less trained employees, failing system controls, diseases, etc. 

There's quite a lack of public data that may help us to assess the feasibility of these businesses. Similar to the algae hype a few years ago: there were enormous promises, but actually nobody really knew how feasible it really was. That's also the case here. You see some examples that seem to work, yes, some in the US some in Japan . However, we can't verify if vertical farming is really successful.

Can it be like that forever? What is the time span for a market to be so vague?

I don't know. A bubble can last and can explode quickly: there are no timelines for bubbles. However, there's a difference between the management of expectations and the practices, between the opinion of the public arena and thereby the investor’s arena, and the opinion of insiders.   What you often see is that practice goes on in data gathering, as it was for bioproducts, algae, and second-generation biofuels. However, you also see that people over expect and then they are up for disillusionment. And actually the practice may not be that bad, but immature!

That's with almost every new area of technology that is considered to be interesting. For example, that was also with the internet. The initial expectations are way too high and then people get disillusioned and turn away, while it may take the generation's lifespan to bring technology to maturity. Typically, if we have complex technologies the time to market can take from 10 to 20 years, because there is food safety regulation, there are consumer habits, etc… So, in the case of vertical farming, I think it will take quite some more time. And I think there's also pressure in some countries to make it work, sooner or later. Especially in Japan, which has a low number of new farming employees, little space, but a willingness to pay a premium, I foresee that there is really an incentive for Japan to continue studying robotized controlled vertical farming. While the hype in Europe and America may wither away, I think that in countries like Japan and Singapore, they will continue trying until they really know that it does or does not work. 

Do you believe we will see more subsidization of the vertical farming sector?

It's critical because you want to use limited space. You often want to reuse buildings, and somebody sets the criteria that define if you are allowed to use that building for the purpose of vertical farming, or not. And that may be interfering because if, for example, they consider it an area where sprinklers have to be installed, then you have a very expensive setting, while if it's considered to be something like a distribution center, with more or less automatic systems, you have a way simpler setting and the safety requirements are way lower. In the end, that is decided by public authorities. And this is about restrictive regulation. 

Positively, you can have financial support, but you can also have support by simplifying regulations. There are quite a lot of ways that authorities can help. For example, offering a building that is standing idle and agreeing "you can use it for five years because demolition is not planned yet. And we will not be very stringent on all the criteria we normally have". That's one way to support that we can consider, more or less, financial support. Furthermore, they can help to create the supply chain, to find buyers or help the process of startup funding. 

An item that's not mentioned at all is the European agricultural subsidies. There is a lot of money going into food subsidies in the European Union (In 2018, about  38 percent of the EU budget went to agriculture). However, there's no talking about subsidizing food that comes from a vertical farm. Vertical farming doesn’t meet the criteria for the distribution of the agricultural budget laid down in the Common Agricultural Policy , and this is because vertical farming is not performed in soil and is done within a building, often in an urban context, and not in a rural area.

Would that be a game-changer?

Yes, I think that would really change a lot. I think that could be quite important. There could be a lobby by local authorities or investors to get that worked out.

In your article, you mention three business models. Could we consider leasing a farm, or even setting up franchising, a fourth business model for vertical farming?

You only see that in the containerized vertical farming. It might be the fourth one, yes, but there are really just a few initiatives there, as far as I know. 

For example, what do you think of in-store units for supermarket chains? Besides the greens, it provides a sort of entertainment, and in a way, an advantage to the shop that hosts the unit.

It's a totally different objective: it is not to grow a lot of food for the community at large. It's to show how food is growing: that's a different ballgame. The same stands for urban farming in soil for social enterprises. If we limit the definition of vertical farming, in-store units may fit but then they are not just for food production, and it can hardly be a serious option for that. 

What do you mean exactly when you say “Over time disadvantages of such so-called vertical integration may come to dominate the advantages”

What you see with vertical integration is that, for instance, you have the final consumer nearby or that you take a lot of steps from the value chain or from the processing and distribution on your own plate. Vertical integration is typically suited for a startup, for an early setting of an industry, when there are no specialized companies around. When you want to grow and expand you often need to focus your resources and your employees, while you are often short of money, you lack specialized people, you lack management time. So then having a vertical integration becomes a burden. 

So, while vertical integration can be necessary to get started, with growth you want to outsource many activities, you want to specialize in the value-adding part. And typically you see that the distribution becomes outsourced, or that a shop near the building will emerge or that a contract with the retailer makes more sense, instead of having a home distribution network yourself. That’s typically a standard idea about how industries actually evolve: in early stages, you have to do it all by yourself because things are lacking; later everybody goes to specialized skills, specialized funding, and specialized market activities, whereby commoditization of intermediaries take place. That is suited also for expansion because some items don't need to be upscale in the same manner as other items do: in distribution actually investment maybe not that extensive, while especially if you are consolidating, then you probably need new buildings instead of the inefficient old buildings, causing moving around the produce often. And so then you want to settle, and that is often quite costly. That’s how you see that specialization takes place.

What is the future of vertical farming? How do you see the industry in the coming five years?

In countries that import a lot of foods, like Japan and Singapore, I think that they will have an incentive to continue the attempt of vertical farming successfully. I think that, in some countries, there's quite some pressure to get vertical farming working, while in Europe, I don't see that there is a lot of eagerness to get vertical farming done. In America, you typically often see the financial drive, motivating competition and selection. I expect more vertical farming expansion on the outskirts, such as on ships, but also on the north and south pole, in deserts, where these technologies can easily be brought and somebody can run it as a franchise. But I think it will become more like a chain or with someone who owns and runs a lot of them. I think that the container-farms may succeed and be the format that will work earlier since they are easily movable and easy to do data gathering and data sharing. I think that the technology is still too complicated for franchises to build. Large vertical farms for buildings are very investment intensive it will.

There's no stable format yet: I think it will take some decades, probably 20 years, before franchising for large vertical farms will be around. Also, McDonald's took decades to grow and optimize with its simple machinery. 

Indeed, the question I have next was: is the future middle-scale or large scale?

I think mid-scale for the coming decade, or you can call it also a smaller format (container). You need time and expertise. You need data. These containers are way quicker in gathering data and optimizing the procedures in the container. So, within five years the container could be quite a topic.

So, the quickness of data gathering is one of the drivers of this business

This Article is part of 3 part blog series inspired by the book “ Urban Greenhouse and the Future of Food” that illustrates the results of Student Challenge “Design the Ultimate Urban Greenhouse” and shares the visions of experts involved.

Acknowledgment:

I thank Leo Marcelis (Wageningen University and Research) and Luuk Graamans (Wageningen University and Research) for providing very useful information.  

Short Bio of the Author: Michele Butturini

Researcher at the Department of Horticulture and Product Physiology, Wageningen University (NL). Passionate about urban farming, vertical farming, and controlled environment agriculture.

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Original research article, growing-service systems: new business models for modular urban-vertical farming.

business model vertical farm

  • 1 Division of Life Cycle Management, Department of Sustainable Society, IVL Swedish Environmental Research Institute, Stockholm, Sweden
  • 2 Department of Sustainable Development, Environmental Science and Engineering (SEED), KTH Royal Institute of Technology, Stockholm, Sweden
  • 3 Department of Marketing & Strategy, Center for Digital Transformation & Innovation, Stockholm School of Economics, Stockholm, Sweden

To secure sustainable and resilient food systems, new approaches, innovations, techniques, and processes are needed. In recent years, urban farming firms have been developing and experimenting with innovative approaches to expand their offerings and connect with consumers in new ways. New business models are being developed to provide functions and services instead of traditional products to meet demands from consumers, retailers, and users. As such, modular growing systems are increasing in popularity to provide fresh produce, visual appeal, transparency, and other tailor-made functions and services in so-called “growing-service systems” (GSS). Using GSS approaches, firms are developing and providing modular and small-scale farms in restaurants, residential spaces, supermarkets, and other commercial spaces, often including a large degree of automation and optimization of digital solutions to remotely control their operation. Using qualitative methods, the aim of this study is to explore and analyze the development of these novel GSS systems, highlighting different strategies, business models, motivations, and challenges. The results illustrate the divergence in approaches to GSSs for vertical farming. This includes different scales of modular units and varying business models for capturing value from the combination of products and services. All of the systems include varying degrees of automation and digitalized solutions to ensure the services are monitored, which is done to improve growing conditions and improve the experience for the users. Business-to-business systems are being developed as both market expansion and awareness-building strategies, where modular units are provided as a rental or subscription model that includes a number of services. Business-to-consumer systems are being introduced as an alternative for consumers, particularly in urban areas, to have greater control and access over growing their own fresh produce. The modules are purchased by consumers, which includes a number of ongoing services from the GSS firms. By categorizing and exploring these systems, this article offers novel insights and a first endeavor to distinguish these new GSS systems in the growing segment of urban agriculture, controlled-environment agriculture, and product-service system literature.

Introduction

In order to secure sustainable and resilient food systems, new approaches, innovations, techniques, and processes are needed for both food production and consumption. In recent years, agriculture has seen dramatic innovations and development to bring food production systems closer to consumers ( Klerkx and Rose, 2020 ). There has been an increasing interest in urban agricultural systems and alternative food systems focusing on shorter supply chains ( Eigenbrod and Gruda, 2015 ; Benke and Tomkins, 2017 ; Pulighe and Lupia, 2020 ). As such, urban farming has been identified as a promising solution to secure food supplies and reduce pressure on agricultural land; (see e.g., Despommier, 2009 ; O'Sullivan et al., 2020 ). There are many examples and methods for urban farming, although approaches such as vertical and hydroponic farming have been popular options worldwide in urban environments; (see e.g., Kozai, 2013 ; Kozai and Niu, 2016 ; Weidner et al., 2019 ). In particular, vertical farming 1 has seen extensive expansion, technical innovations, prolific growth, and upscaling taking place worldwide ( Specht et al., 2014 ; Armanda et al., 2019 ; Appolloni et al., 2020 ).

Beyond the many prevalent large-scale vertical farming systems available worldwide, also called “plant factories,” which have met critique in recent years ( Banerjee and Adenaeuer, 2014 ; Cox, 2016 ; Pinstrup-Andersen, 2018 ; Bryce, 2019 ; McDougall et al., 2019 ), urban farming companies have been developing and experimenting with new approaches. These have spawned from the need to expand their offerings, business models, and connect with consumers in different ways. In recent years, small-scale modular, in-store growing systems are also increasing in popularity and number in connection to residential, commercial, and retail spaces; see also ( Bustamante, 2020 ; Butturini and Marcelis, 2020 ). These new systems employ new business models for ensuring that customers are provided with fresh plants or tailor-made functions. Worldwide, several flagship systems have received extensive investments and expansion, (see e.g., Jürkenbeck et al., 2019 ; Butturini and Marcelis, 2020 ; InFarm, 2021 ; Renmark, 2021 ). Often these systems provide fresh plants, while the vertical farming company retains ownership and control of the infrastructure. Using these new business models, alternatives to traditional sales of products in conventional retail supply chains from centralized production locations, e.g., from plant factories, are increasingly being explored ( Tukker, 2004 ; Mont et al., 2014 ; Geissdoerfer et al., 2018 ). As such, the operation and farming are provided as a service, i.e., “growing as a service.” In this study, we refer to these developing modular systems as growing-service systems (GSS) , as they are inherently linked to the concept of product-service systems (PSS).

PSS refers to an approach where a company (or provider) sells a service, function, or a result, instead of a traditional product, placing value on designing for durability and remanufacturing ( Tukker, 2004 ). There are different types of PSS offerings, depending on how the product is used, the business models employed, and what is to be the result of the contract. The literature categorizes different approaches to this to include product-oriented services, the most common being product, use, and result-oriented services; see a more thorough description in Tukker (2004) . Integrating product and service offerings has been outlined to improve efficiency, which can lead to positive economic and environmental effects for industry and society ( Mont and Tukker, 2006 ; Reim et al., 2015 ; Lingegård, 2020 ). Thus, PSS examples can be framed as sustainable business models which can help providers with approaches for a transition to the circular economy and provide differentiation from competitors ( Amaya et al., 2014 ; Michelini et al., 2017 ). However, while such PSS systems and circular use of products are promoted as sustainable alternatives to conventional sales, their sustainability implications are rarely accounted for and are often confined to qualitative reviews of their potential ( Lindahl et al., 2014 ; Salazar et al., 2015 ; Bocken et al., 2018 ). Furthermore, PSS research has tended to focus on the use of electronic equipment and manufacturing, with no studies related to food production systems, or services related to plant production. Despite the expansion of the field, insights on the implementation, adoption, and reasons for PSS business models are still very limited ( Baines et al., 2007 ; Gaiardelli et al., 2014 ; Reim et al., 2015 ; Annarelli et al., 2016 ). Furthermore, as outlined by several authors, consumer-oriented products have received little attention, despite their potential ( Skjelvik et al., 2017 ; Bocken et al., 2018 ; Martin et al., 2019a , 2021 ).

The aim of this study is to explore and analyze the development of these novel GSS systems in order to highlight their divergence in methods, business models, motivations, challenges, and of their implementation contexts. As such the article offers novel insights and the first of its kind to distinguish these new GSS systems in this growing segment to connect the urban agriculture, controlled-environment agriculture, sustainable business model, and product-service system literature for an emerging business-to-business (B2B) and business-to-consumer (B2C) service.

In the following sections, we outline the methodology employed to collect information on these systems (Section Methodology), highlight results from our qualitative review (Section Results), and provide a discussion on the results, including limitations and future research opportunities (Section Discussion). This is followed by a concluding discussion (Section Conclusions).

Methodology

Research design and data collection.

This study used an exploratory case study design to identify and characterize GSS firms 2 and solutions. Due to the focus on how and why GSS solutions are being introduced along with the relative novelty of the phenomenon, case study methodology was deemed appropriate, which enables rich data collection despite a small number of cases ( Eisenhardt, 1989 ; Voss et al., 2002 ). Multiple cases were selected in order to prevent researcher bias and increase the external validity of generalized findings ( Voss et al., 2002 ). Qualitative research methods that enabled an in-depth investigation of the GSS systems were utilized ( Denscombe, 2007 ).

To identify cases, we made use of an exploratory approach to identify firms implementing GSS solutions. An initial set of firms were identified from previous research conducted by the researchers. This list was expanded through information found in vertical farming newsletters and other industry news sources. Furthermore, we conducted online searches using keywords such as “growing-as-a-service,” “farming-as-a-service,” with a combination of terms such as modular, in-store, and vertical farming. To be included in the study, the firms needed to have a business model that went beyond the sale of plants to include a service component, typically realized through the combination of hardware and software systems. In addition, an effort was made to include firms with a business-to-business focus and ones with a business-to-consumer focus in order to capture the full spectrum of GSS solutions on the market.

The data was collected between February and September 2021. Questionnaires and interviews with firms made up the primary data sources. Due to the start-up environments of the firms, the researchers decided to give a choice between completing open-ended questions via an online survey tool or a video-based interview format so that firms could respond in the manner they deemed best because of often busy schedules. The questionnaire and interviews were developed and focused on seven key areas: (1) Company background and motivations, (2) Overview of how the modular unit/system work, (3) General business model (product and services), (4) Customer experience/training, (5) Benefits of the modular systems, (6) Barriers for modular systems, and (7) Sustainability aspects of the systems. The open-ended questions in the survey and structured interview questions were aligned to enable analysis of the qualitative information whether gathered in written or spoken form. The questionnaire and interview guide employed for the data collection are provided in the Supplementary Material for further information.

Questionnaires and interview requests were sent to 16 firms through the online questionnaire system Typeform. Survey responses were received from seven firms. Two of these were determined to be invalid for the study due to insufficient information or outside the case study criteria. Two firms elected to conduct a structured qualitative interview instead of participating in the survey. Primary data provided by the questionnaires and interviews were supplemented with secondary data sources, including online media articles, videos, and podcasts in order to enhance the reliability of the study through triangulation of data ( Yin, 2014 ). This resulted in seven cases built on primary and secondary data. In addition, despite not having answered questionnaires or being interviewed, further cases were added through the sole use of secondary materials due to the richness of online sources ( Yin, 2014 ; Salmons, 2015 ). Some of the largest firms providing GSS solutions had ample information in online interviews, podcasts, and their respective websites that enabled the researchers to answer questions in the questionnaire and interview protocol outlined above. Thus, a total of 11 firms from six countries in North America, Europe, and the Middle East were included in the study. See Table 1 for a summary of the data collection and firms analyzed for the study.

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Table 1 . Overview of firms analyzed.

Data Analysis

As the first step in data analysis, the results of the questionnaires and interviews were compiled and reviewed as individual cases. The two interviews were recorded and transcribed to enable the compilation of data and analysis. During this initial phase of analysis, research memos were written to capture emerging themes ( Saldaña, 2013 ). The researchers were also inspired by themes from the PSS literature (e.g., based on business models and value creation), thus an iterative process between data and literature began, which resulted in the construction of a data matrix encompassing these themes: system characteristics, general business model, benefits/drivers, barriers, and sustainability. The data collection and analysis process is illustrated in Figure 1 . The matrix was used to plot information from both primary and secondary sources for all cases and enabled a systematic cross-case analysis and comparison during the second phase of analysis. The goal during this phase was to identify similarities and differences across cases ( Miles and Huberman, 1994 ) as well as convergent or divergent views about the benefits and future needs of GSS solutions. The data matrix is not provided in the Supplementary Materials due to proprietary information and requests from the firms involved. However, anonymized information and data can be provided upon request to the corresponding authors.

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Figure 1 . Methodology employed for data collection and analysis.

In this section, we present the findings of the analysis of the firms employing GSS systems. Five key areas were observed when analyzing the data, including (1) drivers and perceived benefits, (2) key characteristics of the systems, (3) business models, (4) sustainability, and (5) barriers and challenges.

Key Characteristics of the Systems

All firms employ principles of controlled environment agriculture in their modular farms, including closed environment, sensors, LED lighting, and circulating water systems. While most firms boast a simple “plug-and-play” system, behind the hardware of the modules are complex software components, with remote monitoring of the systems for both business-to-business and consumer options. This happens through a wifi connection and is often accompanied by an App for the customer to also track and monitor the status of the plant growth and environment. Analytics technology is typically applied from the data gathered in order to improve conditions within the modules and promote “self-learning farms.” This enables optimization of the plant environment, with little knowledge or action needed from the user of the module.

Automation is a priority for the providers of the systems in order to minimize manual labor and ensure the systems are easy to use. Most firms include automation of key aspects, including lighting, climate controls, and pumps. Aspects that require human intervention, such as harvesting and cleaning, are handled through push notifications in accompanying Apps in order to minimize planning and time spent on the module. All systems require the initial placement of seedlings or seed pods in the system, and some also separate a “nursery chamber” for young plants that requires movement to a different shelf in the system until the plants are ready for harvest. The systems themselves range from small cube-like structures to shipping containers, with many likened to a large refrigerator unit found either in a home or retail location. The main products grown in the modular systems to date include leafy greens, herbs, and microgreens, with a few offering tomatoes and one focused exclusively on mushrooms.

Drivers and Perceived Benefits

The results highlight that many of the firms point to undesirable aspects of the current food system, e.g., long transport needs, unpredictability, and pesticide use as drivers to develop new ways to produce and distribute food. These drivers also translate into the perceived benefits of the systems. The ability for hyper-local production is believed to reduce transportation but also give more people the opportunity to be growers, whether that means in a retail location, restaurant, office, or at home. Some firms point to the desire to expose more people to the health benefits of a green environment, especially in cities, despite the fact that the systems themselves are not limited to use in urban areas. Contributing to food resiliency and helping to increase the local food supply are also mentioned by multiple firms as motivations for developing such modular systems.

Beyond these systematic ambitions are also business-specific drivers and benefits. As identified by several firms, the size of the systems opens up possibilities, both for location and revenue diversification. The size of the module systems also enables firms to distribute growing across locations and avoid the strict zoning and building needs of larger farming systems. But aside from these benefits, the systems also play an important role in marketing the firms and their technology. From a firm level, several firms identified that the systems bring visibility to the farms and the use of hydroponics and technology in food production. For business-to-business clients, the firms providing the GSS systems believe there are benefits to the visual appeal of the systems in stores and restaurants. In fact, one of the firms in the study initially envisioned the systems being placed in the back of the house in restaurants. However, the restaurant owners themselves began to demand well-designed systems that could be used in the front of the restaurant as a kind of art installation. This is also apparent in consumer models, where design is a key element of the systems to ensure its integration into the home where space is limited. See Figure 2 for a depiction of different types of GSS modular farms.

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Figure 2 . Depiction of different types of GSS systems analyzed in the study, with (A) showing an in-store farm by InFarm (2021) , (B) showing an in-store/in-restaurant farm by Grönska (2021) , (C) depicting a growing unit in an office environment by Hollbium (2021) , and (D) showing a B2C example by Natufia (2021) .

Business Models

Seven of the firms in this study focus exclusively on the business-to-business (B2B) market, though the users of the systems vary from food retailers, restaurants, offices, and public institutions such as elderly care homes. Two of the firms focus exclusively on the consumer market, i.e., business-to-consumer (B2C), while the remaining two have deployed both B2B and B2C models. One of these firms had plans to launch a B2C module and accelerated those plans when the Covid-19 pandemic hit. The remaining firm remains focused chiefly on B2B customers but launched a B2C solution during the pandemic as a pivot when many restaurants in its area were shut down due to restrictions.

Value Creation

The input from firms suggests that the value created by the systems is largely connected to the idea that consumers want better access to fresh, local food products. The characteristics of the systems outlined above provide a compelling experience to provide hyper-local production. From a B2C perspective, this value is expressed as the ability to grow your own fresh produce and increased access to nutrition-dense leafy greens and herbs. Some system providers are able to show a cost comparison between the long-term use of their systems vs. buying (and in many cases wasting) produce at the store. This is translated into clear value from a consumer perspective. The end-consumer is compelled to purchase a system due to a desire to grow their own produce at home in an easy, low-maintenance manner.

The value creation from a B2B perspective includes the proposition of fresh, local produce but is also driven by intangible assets such as technology, innovation, intellectual property, customer relations, and branding (both for the firms and users). These aspects are harder to quantify in economic terms, especially in a retail environment where space for modules is limited and often expensive. So while there is value being created, the economic value, specifically the profitability of the systems for the firms (providers) and the revenues generated for the users of the GSSs, is unclear at this stage, pointing to the general novelty of the systems.

Value Delivery

While the specific technology and services offered by the firms, as well as the locations of the farms can vary, all firms were found to use an operational model built on the integration of hardware and software to deliver value. This is typically realized through a type of platform for digital interaction between providers and users of the system. This requires a combination of people, processes, and technology in order to deliver value. Figure 3 depicts a generalized system and value delivery model for GSS systems.

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Figure 3 . Generalized system and value delivery model for GSS systems. The farm and vertical farming firm are connected through (1) cloud-based application to monitor and provide feedback for (2) consumables and other inputs, (3) possible maintenance and optimization, and finally (4) information about the cultivation and final harvesting periods.

From a people perspective, there is a combination of resources inside the system providers and people in the customer organization needed in order to maximize the value. Though, as pointed out in the section on characteristics of the systems, the firms look to minimize the need for human intervention from the customer, thus hoping to reduce the demand for new skill sets or a reorganization of job responsibilities. The process is largely automatic and continues to be optimized through business intelligence tools such as machine learning and artificial intelligence analytics. Off-site monitoring and proprietary software applications also help streamline the process for the end-user. The technology includes the hardware of the modules and needed input materials. There is a mix of proprietary hardware solutions and the use of third-party inputs. To deliver consumables and other materials, a number of suppliers and partners are needed, including seed providers, substrate materials, and delivery, which usually occurs through regular mail.

From a B2B perspective, scalability remains a challenge of the modular system, particularly in the retail sector. While some firms focus solely on modular solutions, others are combining the approach of both modules and their larger-scale centralized vertical farms, also called “mega farms,” in order to deliver desired volumes of local, fresh produce. Many times these are different technical set-ups, however, in one of the cases, the firm is building mega farm solutions built on its modular technology, which can easily be scaled up or down based on customer needs. Others are taking the principles of the “growing-as-a-service” model, but integrating it into partnerships in mega farm facilities, where retailers or real estate owners invest in a modular farm, and the firm takes care of the growing for them.

Value Capture

While surveys, interviews, and secondary sources provide some insights into the revenue models of these systems, there is a mix of strategies at this stage and it is unclear if the modular systems offer a sustainable profit model over time. This also points to a relatively young phenomenon. Though specifics vary, the customers of these systems are paying for the bundling of both products and services. The majority of the B2B module systems are either leased or rented, with some firms requiring longer-term contracts.

Using a subscription-based model, many firms offer a service package that includes a number of features such as access to remote monitoring and a software application and certain services, including maintenance, training, system servicing, etc. Inputs such as nutrient solutions and seeds/plugs are sometimes included in a monthly subscription fee, while others require users to purchase them on demand. Other services that may require a separate fee or are included in package pricing include installation and a customized product mix plan for the units. Some of the firms do require the B2B customers to purchase the systems, which include the hardware and software components. Customers must then pay either monthly or on-demand costs for needed supplies and inputs.

Not all firms surveyed have developed their own technology behind the systems. All but one use a mix of proprietary and purchased components in order to package the products and services into a unique offering. One of the firms is using a more standard white label strategy, where it resells the hardware/software bundle developed by another farm in a different market under its own brand in its region.

Unlike the majority of B2B offerings, the B2C modules are purchased by the end-consumer. Prices of the consumer GSS systems place them in a luxury category, with the current in-home units offered by the firms in our study ranging from US$4,000–US$8,000. The purchase price typically includes a starter kit of seeds and nutrient solutions, as well as access to a software application and remote monitoring support. From there, some firms offer a monthly subscription option to cover supplies, while others use an on-demand purchase model.

Sustainability

The majority of the firms suggested that their GSSs are, or are becoming, more sustainable. This is often related to environmental sustainability, where many of the firms suggest that the modular farms offer resource-efficiency advantages, primarily through reduced water and fertilizer consumption in the horticultural production methods employed.

As mentioned previously, location was identified as a key benefit of these systems. The production of hyper-local foods is often recognized by the different firms as a sustainable advantage, providing reduced transportation through shorter distances in their supply chain, and bringing the crops closer to the consumer. Connected to this are the many suggestions of increased freshness and shelf-life, which in turn are suggested to add to the quality of the product. Furthermore, this proximity to the end-users is suggested to reduce waste along the supply chain by a number of firms.

Sustainability was also suggested by many firms to be a priority in their work. Some firms are looking into reducing supply chain sustainability impacts by reducing shipping distances for consumables needed in the modular farms. Several firms also addressed the sustainability of their packaging materials, suggesting they are moving away from conventional plastics, and have been using, or experimenting with new materials. Furthermore, circularity was also discussed, as several firms are taking steps to include more circular approaches in their production. This includes reusing materials, developing new fertilizers, and improving the integration with urban environments and their building hosts. Nearly all firms were aware of the impacts of energy use, mentioning electricity and its negative environmental impacts. As such many of the studied cases highlight their purchasing of renewable energy or optimization developments to reduce energy consumption; see also discussions above on key characteristics.

Barriers and Challenges

The barriers and challenges outlined by the firms can be categorized into broader industry barriers and firm-specific challenges. From an industry perspective, the cost of technology is considered a current barrier, though many admit the costs are decreasing. The variety of products grown in the systems is also seen as a challenge for long-term growth and demand generation. Overall, the efficiency and sustainability factors of the systems are noted as an area that needs to be improved. In addition, one firm also identified the need for better business models in order to achieve economic sustainability of the modular offering. This includes aspects of the contracts and ensuring the long-term use of the systems so they are not seen as just marketing or display tools that are frequently changed out for other product displays, as floor space is often limited and/or expensive. Due to the novelty of the systems and hydroponic growing in general, supply and demand management is also difficult for most firms at this stage.

From a firm-specific perspective, the cases seem to be at different stages of development or concentrating on different concerns. In general, most of the firms are focused on bringing greater efficiency to the hardware/software interaction in order to further decrease the work required by the customer. As noted by one B2B-focused firm, the customers do not want to be farmers, so improving automation and services are seen as vital. Others are focused on increasing the variety of plants that can be grown in the systems and/or the mix within one unit. For B2C-focused firms, the initial costs of the units are seen as a barrier, as they may be considered luxury products in the current market. In addition, space is a concern, especially for city apartments. One firm mentioned the development of smaller units and units with less technology included to bring different price options to the consumer segment.

This section further elaborates on themes that emerged from the analysis and also presents avenues for future research.

Distributed Modular Systems

While there has been an extensive expansion of larger-scale centralized production systems for vertical farming ( Butturini and Marcelis, 2020 ; Kotsier, 2020 ), our results highlight an expanding smaller-scale modular system for vertical farming. It was found that the novel approach to food provisioning in urban areas is being conducted worldwide, and encompasses a number of different products and systems. As highlighted in previous studies, there is a growing market for such solutions ( Jürkenbeck et al., 2019 ; Butturini and Marcelis, 2020 ; Renmark, 2021 ). Our findings imply that these systems are being offered as novel, or niche, approaches, and in B2B environments, as an expansion of the vertical farming firms' own business portfolio. It was found that several firms are combining modular farms with conventional larger scale vertical farms; either starting directly with modular units or starting from larger farms and exploring the use of modular units. Once again, this approach has been highlighted as a way to differentiate from competitors in the market; aligning with previous studies on vertical farm market development, (e.g., Bustamante, 2020 ). As such, these tailored systems can create customized products to increase competitiveness and a unique profile in the retail market; (see e.g., Pine and Gilmore, 2014 ; Charters et al., 2017 ; Jürkenbeck et al., 2019 ; Sjölander-Lindqvist et al., 2020 ). A few of the firms in the study highlighted the ability to increase the types of products grown in the systems as an important area for expansion, which would address previous criticism of vertical farming in general ( Cox, 2016 ; Pinstrup-Andersen, 2018 ); though others argue this limitation is more about economics than system ability ( Banerjee and Adenaeuer, 2014 ).

Jurkenbeck et al. (2020) also found that the transparency provided by such modular solutions, which are directly visible to consumers, greatly improves their acceptance of such systems. Nonetheless, research has shown that consumers may be reluctant to consume foods from these more “technical” or less “natural” solutions ( Siegrist, 2008 ; Coyle and Ellison, 2017 ; Grebitus et al., 2020 ), due in part to the lack of knowledge of these systems ( Coyle and Ellison, 2017 ; Jürkenbeck et al., 2019 ; Yano et al., 2021 ). As such, by providing a visual element, the GSS providing firms are attempting to break down barriers by providing further transparency to how food is produced in vertical farming environments and engage with consumers. The firms in our study also pointed to this important aspect of the distributed model, which enables consumers to understand hydroponic growing. Placed in the retailers, the module systems provide a unique experience and educational opportunity. Located in homes, consumers are given the power over the product decisions, harvesting and availability. Such effects expand previous PSS research which have highlighted how consumer awareness of PSS systems challenges conventional product ownership, especially in urban areas, with systems for rental, sharing, and services ( Acquier et al., 2017 ; Zamani et al., 2017 ; Hollingsworth et al., 2019 ; Martin et al., 2019b , 2021 ). In addition, few previous studies have outlined B2C examples of PSS systems, where the module is included at home. While such examples are available for B2C applications in the home, e.g., printing ( McIntyre, 2018 ), robotic vacuums ( Electrolux, 2019 ), no systems have outlined food production systems.

Business Models and Market Approaches

While the study provides some general insights into the business models of GSS solutions, it was difficult to obtain a detailed view of any one firm's business model. This could be due to a number of factors including the relative recent entrance of GSS solutions in the market, a desire for secrecy about this aspect of the farms and also the limitation of using open-ended surveys, where firms may have felt less inclined to write detailed commentary on this aspect. This was especially difficult in the B2B-focused firms. However, the analyzed information did uncover a number of interesting points.

First, although the long-term sustainability of the business model is unknown, almost all of the firms acknowledged the benefits of the systems in helping to grow awareness of hydroponics and build market acceptance. For the B2B focused firms, the modular-based systems also provided an opportunity to further develop relationships with retailers and restaurants by providing a unique experience for their end customers. Thus, by introducing the modular systems, even as the business model may be in flux, the GSS providers are able to explore the market and grow a network; which has been acknowledged as instrumental for technology entrepreneurs and a key function of business models ( Doganova and Eyquem-Renault, 2009 ). This ability to extend the current offering beyond the delivery of plants and build relationships with their customers also aligns with key factors for the success of PSS offerings ( Annarelli et al., 2016 ).

Second, while specifics vary, the customers of these systems are paying for a bundling of both products and services. B2C models require the purchase of the system, which also includes access to a number of software applications. The majority of the B2B systems are either leased or rented, and contracts include a number of services, which may or may not include performance indicators around the number of plants harvested and sold. From our results, it was difficult to suggest which conventional PSS model was employed and there does not seem to be one dominant model at this stage (i.e., product-oriented, use-oriented and results-oriented per Tukker, 2004 ). The B2C models align with a product-oriented model, as the main offering is still the product, which in this case could be considered both the plants and the physical module. B2B solutions, however, are harder to categorize. Some systems seem to align best with the use-oriented model, especially those found in restaurants or offices, as the systems are rented and largely run by the customer. However, retailer-focused solutions are harder to categorize. Some seem to be use-oriented, but others are also based on the number of plants harvested, aligning more with a results-oriented model. This difficulty in categorization points to the difference in our study vs. past PSS studies, which have generally focused on the manufacturing sector. Many times, in those cases, services were added to a long-term use product, where in GSS systems, a plant is the original product. Thus, the GSS system is introducing both a new product (the module) and services to a product that is consumed and used in a relatively short period of time, making it more difficult to fit into the established categories of PSS models. As highlighted, more information is needed for GSS firms to improve upon their business models in order to achieve economic viability of the offering. As such, further design developments and business model iterations may be necessary. Similar assertions are also highlighted in Kambanou and Lindahl (2016) and Bocken et al. (2018) .

Last, our study uncovered some insights into business model innovation in the food industry. Vertical farming systems are constantly improving and expanding. As suggested in Klerkx and Rose (2020) , vertical farming innovations are potentially game-changing, affecting the way in which food is produced, processed, traded, and consumed. The visibility and benefits of hydroponic growing enables customers to make decisions based on new characteristics of food, such as environmental effects, or by taking into account intangible benefits such as eating a product closer to harvest. The ability to differentiate products based on intangible and tangible benefits, along with “turning ordinary products into extraordinary experiences” have been identified as key PSS benefits ( Annarelli et al., 2016 ). These developments are also in line with consumer demand for more locally produced food, especially in wake of the Covid-19 pandemics ( Toler et al., 2009 ; Granvik et al., 2017 ; Pulighe and Lupia, 2020 ). In particular, the B2C modules are challenging the dominant business model in the food industry, where typically an individual buying a product from a store supports the business model of the food retailer ( Kaplan, 2012 ). B2C modules enable the GSS firms to capture the value directly from the end-consumer. Some firms argue that giving the consumers the control over production is an intangible value consumers are willing to pay for. As all of the firms in the study point to a desirability to improve the environmental performance of the current food system, the experimentation of business models that support sustainable innovation is an important and ongoing endeavor, as it is difficult to simply transplant business models from one economy to another if sustainable development is a goal ( Boons and Lüdeke-Freund, 2013 ).

Benefits and Sustainability

The results suggest that most firms highlight a number of benefits of modular systems. Owing to their proximity to consumers, the location was highlighted as a beneficial aspect of these systems, where the freshness and nutritional aspects of the products were suggested to be superior in these systems. This is especially important for leafy greens, which can begin to lose nutritional value as soon as they are harvested. Indeed, previous studies have suggested that vertical farms can control the genetics, quality, and sensory experience of different croups through optimized conditions during growth and pre-harvest, (see e.g., Selma et al., 2012 ; Nicole et al., 2019 ; Sharathkumar et al., 2020 ). Furthermore, many firms also suggest location is important for sustainability, e.g., by reducing transportation along the supply chain. However, previous studies have shown that the transportation of foods has a relatively minor impact on the overall impact ( Edwards-Jones et al., 2008 ; Coley et al., 2009 ), and specifically for urban-vertical farms ( Martin and Molin, 2019 ). Nonetheless, an important benefit also highlighted for vertical farms in close proximity to consumers is also related to variety of crops which can be produced, which can be chosen for flavor and taste, thus providing differentiation, which is not always possible in conventional varieties found in retail which may be optimized for transportation resistance ( Bogomolova et al., 2018 ; Harada and Whitlow, 2020 ; Renmark, 2021 ).

Beyond transportation, many of the firms outline the advantages the GSS systems provide for environmental sustainability, primarily relating to resource efficiency improvements and reduced toxicity from the lack of pesticides employed. Such motivations are common amongst urban agricultural systems, see e.g., assertions in Specht et al. (2014) , and have been found to be a major driver in consumer acceptance of such systems for different vertical farming systems ( Coyle and Ellison, 2017 ; Jürkenbeck et al., 2019 ). However, no firms highlighted other sustainability pillars, e.g., social or economic sustainability. There are a limited number of studies reviewing sustainability or specific case studies of urban farms in different scales beyond plant factories and rooftop farms ( Kulak et al., 2013 ; Romeo et al., 2018 ; Martin et al., 2019b ) and thus more research could focus on the implication of GSS systems in comparison to their larger counterparts. Furthermore, while such PSS systems are promoted as sustainable alternatives, their economic, social, and environmental implications are rarely accounted for and are often confined to qualitative reviews of the potential of these systems ( Lindahl et al., 2014 ; Salazar et al., 2015 ; Kambanou and Lindahl, 2016 ; Bocken et al., 2018 ). It is important that further developments, case studies, and assessments are explored and tested to ensure they achieve the desired intentions and provide value to both provider and users of the systems ( Kambanou and Lindahl, 2016 ; Bocken et al., 2018 ; Martin et al., 2021 ).

A further benefit outlined by most firms is the potential to control the systems to allow for learning and ease of use by the consumers. This is often included in PSS offerings, allowing for the provider to control the system and maintenance and reduce risks for the user ( Tukker and Tischner, 2006 ; Lingegård, 2020 ), although its influence on the sustainability of the systems are not well-known ( Martin et al., 2021 ).

Limitations and Future Research

Our analysis of GSS could be improved in a number of ways. First, the study sought to understand the nature of the activities and technical functions surrounding GSS solutions but did not evaluate their effectiveness in any one area, e.g., market development, sustainability, innovation management. Future studies of GSS systems could include further information and questions relating to the business models employed. As many of the firms suggested that they are designing the systems with the users and consumers in mind, in the future, research could focus on user and consumer perception and perspectives of these systems. Furthermore, while the questionnaire and interviews did not address the lifetime of the modular units, the lifetime, and design for durability are important for the PSS systems. Our study also highlighted a limited geographical selection of such cases, which has examples worldwide, but has a more European focus. Further work can be done to develop knowledge from a broader set of GSS solutions worldwide, especially as they are becoming increasingly apparent. Finally, as the study is focused on a novel method for vertical farming, a more longitudinal approach could be employed to study the change in these systems over time to study their development. Further studies could also focus on the complexity of business ecosystems for GSS solutions.

Conclusions

Using a product-service system approach, the results of this study highlighted examples and characteristics in the development of technology and software systems in vertical farming, referred to as growing-service systems (GSS) in this paper. It was found that this novel method is employed by a number of firms as a new business model. This was used to extend and improve their markets, either as an additional approach to their larger centralized farms, or as their exclusive approach. The value created by these systems rests largely on intangibles such as fresher products, local production, and automated control over growing aspects. In order to deliver this value, all firms are developing a combination of hardware and software applications that provide a number of automated services to achieve the desired output. We found that the value capture strategies for the systems varies between the B2C and B2B contexts. While the modular units are often provided with a subscription service for B2B contexts, they are generally purchased in B2C contexts; though both concepts included a number of services to complement the hardware system.

The key motivations for these systems were the ease of use and the perceived benefits of hyper-local production, including improved product quality and building more resiliency in local food systems. Many of the firms also found the modular systems to be beneficial in their marketing by increasing transparency and awareness for vertical farming methods and products. Nearly all firms motivated the development and use of these systems to contribute to more sustainable food provisioning. Location was found to be a key aspect in both the sustainability and quality of the products, e.g., linked to the proximity to users and “freshness” of the product. However, the study also highlights some barriers to their development. These include improving the business models to allow for more economic viability, reducing costs, improving the efficiency of the systems, and technology for increased automation in limited space.

The results and knowledge produced contribute to the emerging literature on sustainable business models, urban-vertical farming, and PSS through empirical evidence from a novel segment of PSS in the food industry; once again referred to in this study as GSS. The results of this study can be useful for GSS firms, in addition to retailers and direct users, to further develop and improve the GSS offerings and modular vertical farming systems for different contexts. Future research should also be placed on understanding the implications of these modular systems in comparison to their larger-centralized counterparts, in addition to studying the role of technology and user perception/acceptance of these systems to add to the understanding of the opportunities and challenges of deploying sustainable business models.

Data Availability Statement

The raw data supporting the conclusions of this article will be made available by the authors, without undue reservation.

Author Contributions

MM and MB equally contributed to the concept of the study, its data collection, analysis, and writing of the manuscript. All authors contributed to the article and approved the submitted version.

The research has been funded through a grant from the Swedish Innovation Agency (Vinnova) in the project Urban farming for resilient and sustainable food production in urban areas, Grant 2019-03178.

Conflict of Interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Publisher's Note

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.

Acknowledgments

We would like to thank the vertical farming firms which provided information on their modular farming systems to learn more about this exciting development. We would also like to thank our colleagues in the project for support and guidance and the reviewers for feedback leading toward the development of this article.

Supplementary Material

The Supplementary Material for this article can be found online at: https://www.frontiersin.org/articles/10.3389/fsufs.2021.787281/full#supplementary-material

1. ^ In this study we define vertical farming as the vertical production of edible plants and vegetables through controlled-environment agriculture (CEA) techniques.

2. ^ Hereafter, we refer to farming companies as simply “firms,” while reference to specific sites as “farms.”

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Keywords: vertical farming (VF), product-service system (PSS), business model, in-store, urban agriculture, modular farming, hydroponic agriculture

Citation: Martin M and Bustamante MJ (2021) Growing-Service Systems: New Business Models for Modular Urban-Vertical Farming. Front. Sustain. Food Syst. 5:787281. doi: 10.3389/fsufs.2021.787281

Received: 30 September 2021; Accepted: 25 October 2021; Published: 29 November 2021.

Reviewed by:

Copyright © 2021 Martin and Bustamante. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) . The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

*Correspondence: Michael Martin, michael.martin@ivl.se

† These authors have contributed equally to this work and share first authorship

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Vertical farms, building a viable indoor farming model for cities

The number of vertical farms has grown to several hundred farms across Asia, Europe, and North America since the first appeared back in 2010. Using different types of technologies, vertical farms are a new type of Controlled Environment Agriculture (CEA) that could be described as a stack of greenhouses on top of each other, multiplying the plant yield by the number of floors comprising the vertical farm. It has now become a solution to most of the issues deriving from traditional outdoor farming: by occupying less land, it can contribute to the restoration of forests and by operating within a circular economy framework, it uses fewer resources and reuses organic waste. Impacts on health could also be significant as outdoor farming contributes to the spread of global infectious diseases. While vertical farms require a high-tech environment, which can mostly be acquired in wealthy countries, the model could rise in the coming years as a viable solution to increase food sufficiency of cities across the world with the support of local authorities and international organizations, as well as with the multiplication of large commercial growers.

Automated vertical farm Techno Farm Keihanna, capable of producing 30,000 heads of lettuce per day in Kyoto, Japan

Automated vertical farm Techno Farm Keihanna, capable of producing 30,000 heads of lettuce per day in Kyoto, Japan

You have been working for several years on the concept of vertical farming. Could you elaborate on what qualifies as a “vertical farm”? Do different types of vertical farms exist?

Dickson Despommier : Vertical farms are a type of Controlled Environment Agriculture (CEA). CEA strategies are far from new, as they emerged in the 1700s. They have traditionally taken the form of greenhouses, which have greatly contributed to the global food supply over the last decades. Vertical farms differ from greenhouses in terms of their height. Indeed, a vertical farm can be simply perceived as a stack of greenhouses on top of each other. Therefore, for the same amount of ground space used, the plant yield is multiplied by the number of floors of the vertical farm. The higher the vertical farm, the more produce it yields, albeit with the same footprint. Consequently, they are now capable of producing millions of tons every year.

Vertical farms mainly differ amongst each other in terms of the technological methods used to grow edible plants indoors.

The first one, hydroponics, consists of growing plants on a neutral and inert substrate (e.g. sand, clay, and rock material), which is regularly irrigated by a liquid fortified with minerals and nutrients that are necessary to sustain plant growth. Hydroponic systems use 60-70% less water than traditional outdoor agriculture. They are widely employed by hundreds of thousands of commercial greenhouses and vertical farms throughout the world.

The second process of vertical farming is aeroponics, through which plants are grown without the use of any soil (or soil replacement): their roots, hanging down in the air inside a closed container, are exposed to a fine mist of nutrient-laden water, regularly sprayed through a nozzle. While this is a relatively new method for growing edible plants – it was first developed in 1983 – it is increasingly employed by commercial vertical farms such as Aerofarms and Tower Garden in the US.

Finally, a hybrid method, aquaponics, integrates fish production into the hydroponic growing scheme. More precisely, it uses fish waste as a nutrient source for the plants after treatment, operating as a closed loop ecosystem for indoor farming. However, this system’s complexity and high cost hinder its widespread use. The former two methods are the most common forms of CEA.

Is there a particular model of vertical farming you perceive as more optimal for the future than others?

D.D.: In terms of methods, aeroponics has two advantages in comparison to hydroponics: it uses approximately 70% less freshwater, and aeration of the nutrient solution is unnecessary through this technology so that the system becomes more profitable and easier to monitor. Aeroponics is a more efficient process of vertical farming. Nevertheless, farmers using aeroponic systems have faced a challenge for some time: the nozzle used to spread the nutrient-enriched water mist used to clog regularly. However, Shanghai-based AEssenceGrows developed a nozzle design that would not clog when delivering water to aeroponic plants, improving the reliability of the mist system. AEssence today supplies an in-house engineered patented aeroponic system which allows vertical farms to grow numerous kinds of produce.

But besides the technological aspect, to be promising and sustainable, the business model of an urban vertical farm should be viable. For instance, Infarm offers a high-potential commercial design for vertical farms. Infarm, for which I consult, is a startup created in 2013 in Germany that has now expanded to several European countries and has over 200 employees. It designs high-tech indoor gardens in supermarkets produce aisles employing hydroponic systems and a biomimicry design for its growing-trays, which are stacked vertically and housed in a protected environment. The Infarm app monitors all aspects of grow technology, such as pH levels. Supermarkets such as Metro have partnered with Infarm to build small-scale LED-powered grow modules in their stores so that consumers can themselves pick the fresh vegetables they want to consume, albeit these are more expensive and hence tend to be purchased by the upper middle class.

Together, AEssence and Infarm are good examples of start-ups providing an extremely strong growing system for urban settings, both technically and commercially.

What factors have contributed to the emergence of vertical farms, historically and geographically?

D.D.: As far as I am aware, the first vertical farm appeared in Japan in 2010. Rather than a commercial enterprise, it was established as an experimental farm at Chiba University by Dr. Kozai and his research team. Following the 2011 earthquake, tsunami and nuclear crisis, 5% of the farming in Japan was destroyed or unusable due to saltwater and nuclear contamination. The government made a public call for a solution, and Dr. Kozai suggested his vertical farming model which grows food in a controlled, safe indoor environment, clean from contaminated water or soil. The Japanese government started to provide widespread support to vertical farms and their numbers have greatly increased. As of 2018, there are several hundred commercial vertical farms operating throughout Japan’s islands, such as Spread Co. Particularly easy to grow in this sort of setting, leafy green vegetables, became a key element of the Japanese food habits.

The second country to engage in vertical farming was South Korea. It started with an experimental seed bank complex based in Suwan and then expanded to provide agricultural training so that people could replicate the model themselves. This has resulted in a strong industry that has spread throughout the country.

The third known case of vertical farming was a 3-story building in the old meatpacking district of Chicago. Each story grew a particular kind of product: fish, mixed greens, and fish foods and barley. This initiative, which started in 2013, was fully dedicated to educational purposes.

Since then, a large number of vertical farms have mushroomed across the world. They doubled in one year, and since then have been experiencing incredibly rapid growth. Over the next five to ten years, the number of vertical farms has the potential to increase at a geometric rather than at an arithmetic rate. That means that vertical farming is on the way to become a common feature of city landscapes and that cities will have the capacity to produce significant quantities of food for more than 60% of the urban population.

I would explain this recent development through two main factors:

The first (1) is that the time for innovation in urban agriculture is right. Indeed, although the idea of a vertical farm might have been developed several years before 2010, it may not have gained the attention necessary for its survival and expansion. However, the market today is receptive to vertical farms, driving its success.

This is enhanced by a second factor: (2) rapid climate change. It should not come as a surprise that the number of vertical farms is evolving at a similar pace to anthropogenic climate changes. Planners of vertical farms are motivated by the realization that the earth’s environment and climate are being disturbed by current modes of food production so that innovative ways to grow food are necessary. At the other end, environmentally-aware consumers and citizens welcome vertically farmed products into their food consumption habits. As the climate continues to be disrupted, populations continue to multiply, and cities continue to expand – all of which are unlikely to slow down – food production and consumption are forced to assume new and more sustainable patterns, in which vertical farming plays a central role. Thus, vertical farming is expected to continue expanding and scaling across the world.

You often depict traditional outdoor farming as an unsustainable model of agriculture. To what extent and how can vertical farming contribute to the sustainability of food systems?

D.D.: Vertical farming is a valuable solution to the issues involved with traditional outdoor farming. Its first and foremost contribution is on the environment. There is a broad consensus among academia, policymakers, international organization staff, and society in general that the contemporary system of outdoor soil-based farming is unsustainable and largely responsible for climate change. Half the world’s trees – the equivalent of the size of Brazil – have been deforested for the sake of agriculture. As it is well known, trees are a core element that sequesters carbon dioxide and produces oxygen, so that the destruction of forests for agricultural land use has a considerable role to play in climate change. Indoor farming, notably vertical farming, would allow us to reduce the amount of land that is necessary to feed the ever-increasing world population, which is particularly important considering that the latter is expected to grow up to 9.8 billion in 2050. Vertical farms could even contribute to the restoration of 60 to 70% of forests (two trillion trees), which would sequester enough carbon to reverse the rate of global warming.

Admittedly, indoor farming cannot be expected to fully replace all of the 1.87 billion hectares devoted to crop production. For instance, rice is highly costly to grow indoors, while beef is almost impossible to raise indoors. However, it can become a considerable source of food which would decrease the need for excessive farmland usage. Indeed, other animals such as crustaceans, fish, and poultry can be produced in vertical farms, as well as cattle food – growing soy indoors could have a great impact on deforestation. Even if indoor farming does not fully replace outdoor farming, it may well complement the food system facing the increasing pressures of demographic growth coupled with land scarcity.

Additionally, vertical farming can operate through “zero” pollution circular reuse grow systems. Not only can urban farms contribute to land use, but also to the reduction of other natural resources such as water and energy, and to the reutilization of organic waste. Further, growing food indoor could have a significant impact on global health. Outdoor farming is one of the main causes of global diseases since half the world gets sick from vegetables contaminated with human feces. Growing food in a controlled environment would allow everyone to grow safe-to-eat, healthy food and thus decrease the number of diseases throughout the world.

Vertical farms decentralize the food system, as well as democratize the food supply, since it increases supply, lowers prices, and therefore contributes to food access to all sections of the population, including the poorest. More equitable and widespread access to food will further enhance urban systems’ sustainability.

It is also interesting to compare the advantages of vertical farms with those of other types of urban agriculture. For instance, open lots are a common way of growing food in an urban environment, as seen in La Paz (Bolivia). However, open lots are in close contact with car exhaustion, which penetrates the soil, is absorbed by plants, and consumed by people. Another example is that of building gardens on rooftops, which can only be done in regions of the world where winter temperatures are mild. While greenhouses deal with this issue, they cannot yield sufficient food to feed the increasing number of urban dwellers. Vertical farms can be perceived as an ideal method of urban farming, as it optimizes land use and increases food density per square foot of farming space.

The Sunqiao Urban Agricultural District integrates vertical farming systems in conjunction with research and public outreach in Shanghai, China

The Sunqiao Urban Agricultural District integrates vertical farming systems in conjunction with research and public outreach in Shanghai, China

©Courtesy of Sasaki

What needs to be done for vertical farming to expand?

D.D.: Vertical farming faces several kinds of challenges.

First, the question of training and indoor farming skills is very important. Commercial vertical farms operate like any other business, and there are numerous reasons why businesses fail. They require constant oversight of all aspects of the growing environment, as well as employing skilled and experienced staff, who can identify and correct problems in the growing system. I would suggest that schools of agriculture should offer specialized degrees in urban farming, which could not only train city dwellers to work in urban farms, but also stimulate them to work in them, further driving growth in the sector.

Commercial viability is definitely a challenge for vertical farms. There is however great hope that it can become sustainable at a large scale. Some have suggested that the energy cost of running a vertical farm makes it difficult to realize a profit. However, as the price of electricity and LED lights become cheaper, the profitability of vertical farms will undoubtedly increase. Diversifying the crop selection could further contribute to the success of vertical farms, since most today focus on highly productive leafy green vegetables.

Next, opposition from city dwellers and politicians to urban agriculture remains common. Many assume that due to the dense, crowded, contaminated environment of cities, these are not appropriate spaces for vegetable growth. Nevertheless, as the industry matures, indoor farming gains visibility, and the advantages of vertical farming become obvious, it will get easier to get approval for their construction from city planners and other stakeholders, so that vertical farms will gain a lasting place in urban centers.

Last, vertical farms remain relatively expensive to build, maintain, and endure. These are abundant in places such as Japan, Singapore, Taiwan, and the US, where people have high purchasing power. However, the challenge now resides in spreading vertical farming to poorer populations. In places like India, Africa, South East Asia, Latin America, urban agriculture has been growing. But vertical farming, as it requires more expensive technology, has been lagging. Expanding it to larger shares of the population, large commercial growers must step in, as well as international organizations in order to encourage it and make it more accessible. It is only a matter of time for poorer people to demand what the middle class already has access to, at the right market price, and at that point, vertical farming will emerge in cheaper forms.

Vertical farming is often perceived as a “futuristic” model of urban agriculture. According to you, how will cities look like in 50 years?

D.D.: Urban dwellers need to re-imagine city planning and buildings, enabled by the current technological advances which already allow for alternatives modes of production.

1 See more: http://www.sasaki.com/work/

I believe buildings will acquire entirely new functions in 50 years. Buildings today are functionless columns of steel, glass, and concrete which endlessly consume resources such as electricity for air conditioning and heating. Instead, architects should develop buildings that integrate vertical farming systems and that are made of alternative materials such as wood timber (i.e., laminated wood). An example is the Sunqiao Urban Agriculture District, a 1,000-hectare master plan designed by Sasaki Architects in Shanghai 1 . This could lead to a hyper-localized mode of consumption in which citizens buy and consume produce from their own buildings. Further, buildings could be equipped with a circular economy infrastructure. For example, they could have water harvesting systems that capture and store rainwater, contributing to the decrease of clean water usage and waste. Further, solar panels could integrate buildings, especially in regions of the world where solar light is constant and abundant throughout the year.

The Living Tower is an urban vertical farm concept associated with a residential and business campus

The Living Tower is an urban vertical farm concept associated with a residential and business campus

©SOA Architectes

2 See more: https://archello.com/project/la-tour-vivante-the-living-tower#stories

In sum, buildings in the future will have similar characteristics to that of trees, creating a decentralized food production system that contrasts with today’s grids. We are currently on the way to developing this possibility, embraced by architects, academics, and policymakers, as seen in the Réinventer Paris (Reinvent Paris) conference, of which I had the opportunity to be part of the jury. SOA Architects have also designed this kind of building, named La Tour Vivante (The Living Tower), which associates agricultural production, dwelling and activities along the building 2 .

Meanwhile, supermarkets could embrace the benefits from both AEssence and InFarm: indoor growing systems could continually produce vegetables and be located in their aisles, replacing today’s boxes, cans, and packages, and customers could directly order on an app the vegetables they wish to purchase and obtain them freshly grown and harvested.

Ultimately, vertical farming could contribute to climate change efforts, reduce the usage and waste of resources, enhance people’s health and productivity, enabling us to depict a more positive outlook on the future of cities than commonly done.

List of illustrations

Bibliographical reference.

Dickson Despommier , “Vertical farms, building a viable indoor farming model for cities” ,  Field Actions Science Reports , Special Issue 20 | 2019, 68-73.

Electronic reference

Dickson Despommier , “Vertical farms, building a viable indoor farming model for cities” ,  Field Actions Science Reports [Online], Special Issue 20 | 2019, Online since 24 September 2019 , connection on 19 February 2024 . URL : http://journals.openedition.org/factsreports/5737

About the author

Dickson despommier.

Dickson Despommier is an Emeritus Professor of microbiology and Public and Environmental Health at Columbia University (New York City, USA). After conducting research on ecology and intracellular parasitism, he has developed the concept of vertical farming since 1999 with graduate students in his medical ecology class. He is the author of the 2010 book The Vertical Farm: feeding the world in the 21 st Century.

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The text only may be used under licence CC BY 4.0 . All other elements (illustrations, imported files) are “All rights reserved”, unless otherwise stated.

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The Vertical Farm

By Ian Frazier

Vertical farming can allow former cropland to go back to nature and reverse the plundering of the earth.

No. 212 Rome Street, in Newark, New Jersey, used to be the address of Grammer, Dempsey & Hudson, a steel-supply company. It was like a lumberyard for steel, which it bought in bulk from distant mills and distributed in smaller amounts, mostly to customers within a hundred-mile radius of Newark. It sold off its assets in 2008 and later shut down. In 2015, a new indoor-agriculture company called AeroFarms leased the property. It had the rusting corrugated-steel exterior torn down and a new building erected on the old frame. Then it filled nearly seventy thousand square feet of floor space with what is called a vertical farm. The building’s ceiling allowed for grow tables to be stacked twelve layers tall, to a height of thirty-six feet, in rows eighty feet long. The vertical farm grows kale, bok choi, watercress, arugula, red-leaf lettuce, mizuna, and other baby salad greens.

Grammer, Dempsey & Hudson was founded in 1929. Its workers were members of the Teamsters Union, whose stance could be aggressive. Once, somebody fired shots into the company’s office, but didn’t hit anyone. Despite the union, the company and its employees got along amicably, and many of them worked there all their lives. Men moved steel plate and I-beams with cranes that ran on tracks in the floor. Trucks pulled up to the loading bays and loaded or unloaded, coming and going through the streets of Newark, past the scrap-metal yards and chemical plants and breweries. In an average year, Grammer, Dempsey & Hudson shipped about twenty thousand tons of steel. When the vertical farm is in full operation, as it expects to be soon, it hopes to ship, annually, more than a thousand tons of greens.

Ingrid Williams, AeroFarms’ director of human resources, lives in Orange but knows Newark well. She has degrees in labor studies and sociology from Rutgers, and she visited many of the city’s public-housing apartment buildings in her previous job as a social-services coördinator. She is a slim, widely smiling woman with shoulder-length dreads who dresses in Michelle Obama blues, blacks, and whites. For a while, she had her own show, “The Wow Mom Show,” on local-access TV. Through it she met many people, including a woman who is a financial expert and helps local residents with their budgets. The two became friends, and last year when this woman was giving a speech at a Newark nonprofit Williams showed up to support her.

One of the other speakers that day was David Rosenberg, the C.E.O. and co-founder of AeroFarms. “A light went on in my head when I heard AeroFarms,” Williams told me. “There’s an AeroFarms mini-farm growing salad greens in the cafeteria of my daughter’s school, Philip’s Academy Charter School, on Central Avenue. I volunteer there all the time as part of parents’ stewardship, and I know the kids love growing their own lettuce for the salad bar.” After the speeches, she stayed to congratulate her friend and also introduced herself to Rosenberg. He asked her if she was looking for a job. She started as H.R. director at AeroFarms nine days later.

The mini-farm in the cafeteria at Philip’s Academy is a significant piece of technology. In fact, it is a key to the story, and it figures in the larger picture of vertical farming worldwide and of indoor agriculture in general. If the current movement to grow more food locally, in urban settings, and by high-tech indoor methods follows the path that some predict for it, the mini-farm in the school cafeteria may one day have its own historical plaque.

The mini-farm’s inventor, Ed Harwood, of Ithaca, New York, sold it to the school in 2010. Harwood is a sixty-six-year-old man of medium stature who speaks with the kind of rural accent that sometimes drops the last letters of words. He has been an associate professor at Cornell’s famous school of agriculture, and he began his career as an inventor by coming up with revolutionary improvements in the computer management of dairy cows, an animal he loves. His joyous enthusiasm for what he does has an almost messianic quality.

“There are scones in the oven too in case youre peckish.”

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After spending part of his youth and young adulthood working on his uncle’s dairy farm, he got degrees in microbiology, animal science, dairy science, and artificial intelligence, and applied his knowledge to the dairy industry. One of the first inventions he worked on was a method to determine when a cow is in estrus. Research showed that cows move around more when they’re ready to breed. Harwood helped develop a cow ankle bracelet that transmitted data on how active the cow was each day; the farmer could then consult the data on his computer and know when it was time for the artificial inseminator. To check the accuracy of the bracelet, Harwood spent days walking around the pasture beside a cow with his hand on her back while he counted her steps. He enjoyed the companionship during this rather tedious exercise in ground-truthing and thinks the cow did, too.

He first became interested in growing crops indoors in the two-thousand-aughts. Around 2003, his notebooks and diaries began to converge on ideas about how he could raise crops without soil, sunlight, or large amounts of water. That last goal pointed toward aeroponic farming, which provides water and nutrients to plants by the spraying of a mist, like the freshening automatic sprays over the vegetables in a grocery’s produce department. Aeroponic farming uses about seventy per cent less water than hydroponic farming, which grows plants in water; hydroponic farming uses seventy per cent less water than regular farming. If crops can be raised without soil and with a much reduced weight of water, you can move their beds more easily and stack them high.

Harwood solved the problem of the crop-growing medium by substituting cloth for soil. He tried every type of cloth he could think of—“They got to know me well at the Jo-Ann Fabric store in Ithaca,” he said. Finally, he settled on an artificial fabric that he created himself out of fibres from recycled plastic water bottles, and he patented it. The fabric is a thin white fleece that holds the seeds as they germinate, then keeps the plants upright as they mature. The roots extend below the cloth, where they are available to the water-and-nutrients spray.

Devising a nozzle for the aeroponic sprayer proved a tougher problem. The knock on aeroponics had always been that the nozzles clogged. How he solved this Harwood won’t say. He has no patent for his new nozzle. “It’s more of a stream than a spray,” he said, “but we’re keeping the design proprietary. I have no fear of anyone copying it. You could look at it all day and never figure out how it works.”

He rented an empty canoe factory in Ithaca and set up a two-level grow tower a hundred feet long and five feet wide to employ his new discoveries, along with a light system that eventually consisted of L.E.D. lights modified to his needs. He had decided to grow commercial crops and chose baby salad greens. “My ‘Aha’ moment came when I was in the Wegmans supermarket in Ithaca,” he said. “My engineer, Travis Martin, and I looked at the greens for sale and saw that a pound of lettuce cost one dollar, while a pound of baby greens cost eight dollars. That was enough of a premium that we figured I could make my system profitable with baby greens, so I started a company I called GreatVeggies, and soon I was selling baby greens in several supermarkets in Ithaca.”

When that didn’t bring in enough money, he shut the company down. His financial situation, never robust, then took an upturn when an investor offered funding on the condition that he concentrate on selling the grow towers themselves, rather than the greens. Switching to that business model, Harwood formed a new company called Aero Farm Systems. He leased a number of his grow towers and sold a few. One of them went to Jeddah, Saudi Arabia, and he has no idea what happened to it. Another went to Philip’s Academy, where it’s the mini-farm in the cafeteria. The new company did not earn much, either, but he kept it going in a smaller part of the canoe factory.

The term “vertical farming” has not been around long. It refers to a method of growing crops, usually without soil or natural light, in beds stacked vertically inside a controlled-environment building. The credit for coining the term seems to belong to Dickson D. Despommier, Ph.D., a professor (now emeritus) of parasitology and environmental science at Columbia University Medical School and the author of “The Vertical Farm: Feeding the World in the 21st Century.”

The Vertical Farm

Hearing that Despommier would be addressing an audience of high-school science teachers at Columbia on a recent morning, I arranged to sit in. During the question period, one of the teachers asked a basic question that had also been puzzling me: What are the plants in a soil-free farm made of? Aren’t plants mostly the soil that they grew in? Despommier explained that plants consist of water, mineral nutrients like potassium and magnesium taken from the soil (or, in the case of a vertical farm, from the nutrients added to the water their roots are sprayed with), and carbon, an element plants get from the CO 2 in the air and then convert by photosynthesis into sucrose, which feeds the plant, and cellulose, which provides its structure.

In other words, plants create themselves partly out of thin air. Salad greens are about ninety per cent water. About half of the remaining ten per cent is carbon. If AeroFarms’ vertical farm grows a thousand tons of greens a year, about fifty tons of that will be carbon taken from the air.

Despommier lives in Fort Lee, New Jersey, and not long after his lecture I visited him at his apartment, in a high-rise with a skyline view of New York. He is a cheerful, demonstrative man, seventy-six years old, with a short gray beard and a mobile face. The concept of vertical farming came from a class he taught in medical ecology, he said. “It was in 2000, and the students that year were bored with what I was teaching, so I asked them a question: ‘What will the world be like in 2050?’ and a followup, ‘What would you like the world to be like in 2050?’ They thought about this and decided that by 2050 the planet will be really crowded, with eight or nine billion people, and they wanted New York City to be able to feed its population entirely on crops grown within its own geographic limit.

“So they turned to the idea of rooftop gardening,” he continued. “They measured every square foot of rooftop space in the city—I admired how they went to the map room of the public library on Forty-second Street and found aerial surveys and got their rulers out—and then they calculated what the city’s population will be in 2050, and the amount of calories that many people will need, and what kind of crops can best provide those calories, and how much space will be necessary to grow those crops. Finally, they determined that by farming every square foot of rooftop space in the city you could provide enough calories to feed only about two per cent of the 2050 population of New York. They were terribly disappointed by this result.”

At the time, Despommier’s wife, Marlene, who is a hospital administrator, was working in midtown Manhattan. As the couple drove back and forth along the West Side Highway, Despommier considered the light-filled glass-and-steel structures, and that got him thinking about the thousands of abandoned buildings throughout the city. He began to wonder why plants couldn’t live on multiple levels, as human beings do. For his next year’s class he carried over the previous year’s project, and this time had the students calculate what kind of structure a multilevel urban farm would need and how many people you could feed that way.

Despommier taught the class for nine more years, always asking his students to build on what previous classes had done. He began using the term “vertical farming” in the second year. For methods of indoor agriculture, he referred to technology pioneered by NASA and to the work that a scientist named Richard Stoner did decades ago on how to grow crops in non-Earth environments. By the class’s final year, Despommier and his students had determined that a complex of two hundred buildings, each twenty stories high and measuring eighty feet by fifty feet at its base, situated in some wide-open outlying spot—say, Floyd Bennett Field, the airport-turned-park on Jamaica Bay in Brooklyn—could grow enough vegetables and rice to feed everybody who will be living in New York City in the year 2050. These vertical farms could also provide medicinal plants, and all the herbs and spices required for five different traditional cuisines.

“Ive written my diagnosis on this piece of paper. Im going to slide it over to you and I want you to tell me if youre...

The possibilities that opened up put stars in his eyes. Agricultural runoff is the main cause of pollution in the oceans; vertical farms produce no runoff. Outdoor farming consumes seventy per cent of the planet’s freshwater; a vertical farm uses only a small amount of water compared with a regular farm. All over the world, croplands have been degraded or are disappearing. Vertical farming can allow former cropland to go back to nature and reverse the plundering of the earth. Despommier began to give talks and get noticed. He became the original vertical-farming proselytizer. Maybe the world’s mood was somehow moving in that direction, because ideas that he suggested other people soon created in reality.

“When my book came out, in 2010, there were no functioning vertical farms that I was aware of,” Despommier said. “By the time I published a revised edition, in 2011, vertical farms had been built in England, Holland, Japan, and Korea. Two more were in the planning stages in the U.S. I gave a talk in Korea in 2009, and they invited me back two years later. Fifty reporters were waiting for me. My hosts led me to a new building, where they had ‘Welcome Dr. Despommier’ in neon lights. I saw that, and I cried! The ideas that I had described in my ’09 talk they had used as the basis for building a prototype vertical farm, and here it was. When I’m lying in my coffin and they pull back the lid, the smile on my face will be from that day in Korea.”

Today in the U.S., vertical farms of various designs and sizes exist in Seattle, Detroit, Houston, Brooklyn, Queens, and near Chicago, among other places. AeroFarms is one of the largest. Usually the main crop is baby salad greens, whose premium price, as Ed Harwood realized, makes the enterprise attractive. The willingness of a certain kind of customer to pay a lot for salad justifies the investment, and after the greens get the business up and running its technology will be adapted for other crops, eventually feeding the world or a major fraction of it. That is the vision.

AeroFarms occupies three other buildings in Newark aside from the main vertical farm, on Rome Street. At 400 Ferry Street, it has a thirty-thousand-square-foot space whose most recent previous use was as a paintball and laser-tag entertainment center called Inferno Limits. The graffiti-type spray-painted murals and stylized paintball splatters of that incarnation still cover the walls. AeroFarms’ headquarters—sometimes referred to as its “world headquarters”—are in this building, some of which is taken up by a multiple-row, eight-level vertical farm that glows and hums. Technicians in white coats who wear white sanitary mobcaps on their heads walk around quietly. Some of these workers are young guys who also have mobcaps on their beards. The salad greens, when you put on coat and mobcap yourself and get close enough to peer into the trays, stand in orderly ranks by the thousands, whole vast armies of little watercresses, arugulas, and kales waiting to be harvested and sold. For more than a year, all the company’s commercial greens came from this vertical farm.

Nobody in the building appears to have an actual office. Employees are distributed in more or less open spaces here and there. In a dim corner of the area with the vertical farm, where the fresh, florist-shop aroma of chlorophyll is strong, young graduates of prestigious colleges confab around laptop screens that show photos of currently germinating seeds and growing leaves. Folding tables burgeon with cables, clipboards, and fast-food impedimenta. David Rosenberg, the C.E.O., who hired Ingrid Williams last year, is the boss. This distinction is hard to notice, because he looks more or less like anybody else.

“Tell the truth Ezra. Does it look like hes being a more effective parent than me”

I first met Rosenberg at an international conference on indoor agriculture held at a theatre in Manhattan. He wore dark jeans, a blue-and-white plaid shirt with the AeroFarms logo on the breast pocket, and running shoes. In past years, he used to fence competitively and win championships. He is forty-four, tall, and still fit, with close-shaved black hair and dark, soulful eyes. The quietness and patience with which he speaks can be disconcerting. He grew up in the Bronx, went to U.N.C. at Chapel Hill, and got an M.B.A. from Columbia in 2002. AeroFarms is not his first company. When his grandfather Michael Rhodes, a chemist, died, in 2002, a relative told Rosenberg about a molecule that his grandfather had created that could be used to make a weatherizing treatment for concrete. Rosenberg used his grandfather’s invention to start a business called Hycrete, which he later sold, though not for a sum so great that he has chosen to fund AeroFarms himself. In recent years, his new start-up has raised more than fifty million dollars in investment, about twice as much as has any other vertical farm, or indoor farm of any kind, in the U.S.

After Hycrete, he wanted to create a for-profit company that would do good for the environment and for society. With his fellow business-school alumnus and fellow-fencer Marc Oshima, he set about researching the latest indoor agricultural technology. When they learned about the work of Ed Harwood, they immediately got in touch with him. “David and Marc called me, and they kept calling back and asking better and better questions,” Harwood remembered. “They said they wanted their first farm and their world headquarters to be in Newark, and I told them, ‘I’ve got a grow tower in a school cafeteria in Newark!’ That’s when I knew this was going to work out.”

Rosenberg and Oshima had set up an indoor-agriculture company called Just Greens, which existed primarily in name. Harwood had the trademark on the name Aero Farm Systems. They proposed to him that the two companies merge and do business under the name of AeroFarms. Rosenberg would be the chief executive officer, Oshima the chief marketing officer, and Harwood the chief science officer. Like the original Aero Farms Systems, this company would base itself on Harwood’s patented cloth for growing the plants and on his nozzle for watering and feeding them. It would build the vertical-farm systems but not sell them, grow baby greens commercially, and scale the operation up gigantically. This change in fortunes left Harwood thunderstruck. “I couldn’t believe it,” he said. “How many inventors have inventions sitting around, waiting for a break, and then something like this happens?”

Most of America’s baby greens are grown in irrigated fields in the Salinas Valley, in California. During the winter months, some production moves to similar fields in Arizona or goes even farther south, into Mexico. If you look at the shelves of baby greens in a store, you may find plastic clamshells holding five ounces of greens for $3.99 (organicgirl, from Salinas), or for $3.29 (Earthbound Farm, from near Salinas), or for $2.99 (Fresh Attitude, from Quebec and Florida). Harwood’s magic number of eight dollars a pound would be on the cheap side today. Four dollars for five ounces comes to about thirteen dollars a pound.

AeroFarms supplies greens to the dining rooms at the Times , Goldman Sachs, and several other corporate accounts in New York. At the moment, the greens can be purchased retail only at two ShopRite supermarkets, one on Springfield Avenue in Newark and the other on Broad Street in Bloomfield. The AeroFarms clamshell package (clear plastic, No. 1 recyclable) appears to be the same size as its competition’s but it holds slightly less—4.5 ounces instead of five. It is priced at the highest end, at $3.99. The company plans to have its greens on the shelves soon at Whole Foods stores and Kings, also in the local area. Greens that come from California ride in trucks for days. The driving time from AeroFarms’ farm to the Newark ShopRite is about eleven minutes. The company’s bigger plan is to put similar vertical farms in metro areas all over the country and eventually around the world, so that its distribution will always be local, thereby saving transportation costs and fuel and riding the enthusiasm for the locally grown.

At the Bloomfield ShopRite, I watched a woman pick up a clamshell of AeroFarms arugula, look at it, and put it back. Then she picked up a clamshell of Fresh Attitude arugula and dropped it in her cart. I asked her if she knew that AeroFarms was grown in Newark. She said, “I thought it was only distributed from Newark.” I told her the arugula was indeed Newark-grown and explained about the vertical farm. She put the out-of-state arugula back, picked up the Newark arugula, and thanked me for telling her. I think AeroFarms does not play up Newark enough on the packaging. They should call their product Newark Greens.

“No. But if we see anything well let you know.”

The reason they don’t is probably the obvious one—the negative ideas that salad buyers may have about Newark, its poverty and history of environmental disaster, including the presence of Superfund toxic-waste sites contaminated by dioxins and pesticides. That’s not the aura you want for a healthy-greens company. AeroFarms chose Newark because of its convenient location and the relative cheapness of its real estate. City and state development agencies encouraged the decision, and the company has hired about sixty blue-collar workers from Newark, some of them from a program for past offenders. At least geographically, the company so far is exclusively a Newark production.

But in another sense it could be anywhere. The technology it uses derives partly from systems designed to grow crops on the moon. The interior space is its own sealed-off world; nothing inside the vertical-farm buildings is uncontrolled. Countless algorithm-driven computer commands combine to induce the greens to grow, night and day, so that a crop can go from seed to shoot to harvest in eighteen days. Every known influence on the plant’s wellbeing is measured, adjusted, remeasured. Tens of thousands of sensing devices monitor what’s going on. The ambient air is Newark’s, but filtered, ventilated, heated, and cooled. Like all air today, it has an average CO 2 content of about four hundred parts per million (we exceeded the three-fifty-p.p.m. threshold a while ago), but an even higher content is better for the plants, so tanks of CO 2 enrich the concentration inside the building to a thousand p.p.m.

The L.E.D. grow lights are in plastic tubing above each level of the grow tower. Their radiance has been stripped of the heat-producing part of the spectrum, the most expensive part of it from an energy point of view. The plants don’t need it, preferring cooler reds and blues. In row after row, the L.E.D.s shining these colors call to mind strings of Christmas lights. At different growth stages, the plants require light in different intensities, and algorithms controlling the L.E.D. arrays adjust for that.

In short, each plant grows at the pinnacle of a trembling heap of tightly focussed and hypersensitive data. The temperature, humidity, and CO 2 content of the air; the nutrient solution, pH, and electro-conductivity of the water; the plant growth rate, the shape and size and complexion of the leaves—all these factors and many others are tracked on a second-by-second basis. AeroFarms’ micro-, macro-, and molecular biologists and other plant scientists overseeing the operation receive alerts on their phones if anything goes awry. A few even have phone apps through which they can adjust the functioning of the vertical farm remotely.

Though many of the hundred-plus employees seem to be diffused throughout the enterprise and most vividly present in cyberspace, everybody gathers sometimes in the headquarters building for a buffet-style lunch, at which Rosenberg makes a short speech. Talking quietly, he repeats a theme: “To succeed, we need to be the best at four things. We need to be the best at plant biology, the best at maintaining our plants’ environment, the best at running our operational system, and the best at getting the farm to function well mechanically. We have to be the best total farmers. And to do all this we need the best data. If the data is not current and completely reliable, we will fail. We must always keep paying close attention to the data.”

Ed Harwood’s original prototype mini-farm, the one he sold to Philip’s Academy in 2010, still produces crops six or seven times every school year. The invention sits in a corner of the cafeteria by the round lunch tables and the molded black plastic cafeteria chairs, an improbable-looking teaching tool. Examining it, you feel a mystified wonder, and perhaps a slight misgiving about the inventor’s soundness of mind, remembering what happened to Wile E. Coyote. For concentrated ingenuity and handcrafted uniqueness, its closest simile, I think, is the Wright brothers’ first biplane, the Flyer, now on display in the National Air and Space Museum, in Washington. Like the Flyer, and like many other great inventions, Harwood’s prototype is also an objet d’art.

The Vertical Farm

Its dimensions are five feet wide by twelve feet long by six and a half feet high. Essentially, it consists of two horizontal trays of thick plastic, both about ten inches deep, one above the other, suspended in a strong but minimal framework of aluminum. Below the trays, at floor level, a plastic tank holds two hundred and fifty gallons of water. Frames like those used for window screens fit on top of the plastic trays. Each frame holds a rectangle of Harwood’s grow cloth, about two and a half feet by five feet in size. The cloth is attached to the frame by snaps. On small pipes running along the inside bottom of the tray, Harwood’s special nozzles emit a constant, sputtering spray of water at a downward angle. The spray hits the bottom of the tray and bounces up, and some of it becomes the mist that nourishes the roots growing through the cloths. Eventually, most of the water drains down and returns to the tank to be reused.

Seeds speckle the white surface of the cloth. The L.E.D. lights above the trays shine on the seeds. They germinate, and soon the roots descend. Seedlings grow. In about three weeks, the plants are ready for harvesting. The trays are taken out and the leaves are cut off and given to the cafeteria staff, who put them in the salad bar. The cloths are scraped of residues, which are composted for the school’s rooftop garden, and then the cloths go into the washing machine to be laundered for reseeding.

Throughout the mini-farm, PVC pipes and wires run here and there, connecting to clamps and switches. The pumps hum, the water gurgles, and the whole thing makes the sound of a courtyard fountain.

The teacher who keeps all this machinery in good order is Catkin Flowers. That is her real given name. A tall auburn-haired woman in her forties, she starts her science students working with the farm when they’re in kindergarten. “We use the farm to teach chemistry, math, biology,” she explained to me one morning between classes. “The students learn with it all the way through eighth grade. I think the farm is the reason our science scores are so competitive in the state. We get the kids involved in running the grow cycles and then solving the problems that inevitably come up. That’s how kids really learn, not from sitting back and watching the grownups do everything.”

“We’re also teaching food literacy,” put in Frank Mentesana, the director of EcoSpaces, the school’s environmental-science program, who joined us. “Some of our kids have never seen vegetables growing. They may live in a part of the city that’s a food desert, and their families get food at McDonald’s or at bodegas. They may never have seen fresh greens in a store.”

“Kids love to grow things,” Flowers said. “It teaches them about nutrients, the minerals we put in the water, and why the water’s pH affects how the plants absorb them, and about the light spectrum, and how photosynthesis works. The kids monitor the same kind of data as AeroFarms does, but less of it, of course.”

“Ed Harwood is still a huge help,” Mentesana said. “If we have a problem with the farm that we can’t solve, Ed will make time to stop by and fix it.”

“When we’re ready to harvest, the kids can’t wait to eat what they’ve grown,” Flowers said. “They’ll start eating the plants while they’re harvesting, and we actually have to tell them to wait because these are for the salad bar. They want to find out how they taste. And they’re excited when the plants they’ve grown become part of a meal for the whole school. Because of this farm, our school’s consumption of leafy greens is probably not met by any other school in the country.”

On another morning, I stayed for lunch. First, Mentesana took me, along with Marion Nestle (not Nestlé; she’s no relation), the nutrition expert and N.Y.U. professor, on a tour of the school. A Clinton campaign e-mail released by WikiLeaks the day before had referred to harassment of Nestle by the beverage industry because of her book “Big Soda: Taking on the Soda Industry (and Winning),” and she was in a great mood, proud to have been mentioned. Robert Wallauer, the school’s young chef, introduced himself. He has worked for famous restaurants, but decided he could contribute more to the public good by running school kitchens. The entrée was a Chinese-style dish of pasta with chopped vegetables. I told him it was so delicious that if this were a restaurant I would come back and bring my friends.

“I didnt know you had a minor.”

Zara Hawkins, a fifth grader, stopped by our table. Her mother is Ingrid Williams, the H.R. director at AeroFarms. Zara has a quiet manner, and she sometimes looks thoughtfully into the near distance as she talks. She noted the greens we’d just been served, supplied by AeroFarms. “We eat a lot of this salad at home,” she said. “My mom brings the bags of lettuce from work. I didn’t use to like it, but now I do. I have the baby kales in omelettes, with cheese. You can also put them in smoothies. They are O.K. In fact, they can be pretty good.”

Wallauer got up and brought us back glasses of a kale-pineapple-and-yogurt smoothie whose color had the bright seaside green of a lime treat. “It takes a while for kids to start eating certain foods if they’re not used to them,” Wallauer said. “We made some of these smoothies yesterday, and we handed them out as dessert. One little girl took a sip and said it was pretty good. Then she took another and looked at me suspiciously and said, ‘Did you put salad in this?’ ”

A few weeks before the vertical farm at 212 Rome Street was to harvest its first official crop, I walked through the building with David Rosenberg. After the usual handwashing, putting on of mobcaps and coats, and wiping our feet on mats for disinfecting, we stepped into the high-ceilinged room where the vertical farm was humming away. If Harwood’s prototype at the school was the Wright brothers’ first biplane, this immense scaled-up elaboration of it was a spaceship in drydock.

I thought of the tenderness of the greens this device produces—a natural simplicity elicited mainly from water and air by high-tech artifice of the most complicated and concentrated kind. It seemed a long way to go for salad. But if it works, as it indeed appears to, who knows what might come of it when we’re nine billion humans on a baking, thirsting globe? Rosenberg and I stood looking at the vertical farm in silence. On his face was a mixture of pride and love; he might have been seven years old. “We are so far above everybody else in this technology,” he said, after a minute or two. “It will take years for the rest of the world to catch up to where we already are now.” ♦

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business model vertical farm

Vertical farming economics in a nutshell

An essential step towards success in vertical farming is to take control of your economics. You need to create and maintain a good balance between capital, operating costs, and earnings. Let’s take a look at the most critical factors of vertical farming economics.

Technological advances, climate changes, and increasing food demand rapidly accelerate the CEA business (Controlled-Environment Agriculture). However, many vertical farms struggle to make ends meet, which has raised questions about the profitability of CEA.

Relevant article: Why is CEA growing so fast?

Indoor agriculture technology has existed for 20 years or more. However, not until recently has it been possible to turn it into a major business. CEA has gradually gained traction over the last decade or so, but it still takes skill to balance vertical farming economics right.

Vertical farming is still a relatively small niche in many parts of the world. However, some countries, like Japan, Singapore, and the United States, have turned it into big business. The question is, can anyone make a profit from vertical agriculture?

In theory, yes, but there are many things to consider. For example, the financial potential of your vertical farm depends on factors such as size, location, demand, target customers, and more. This article will take you through the basics and give you some pointers to keep in mind.

Keep an eye on our blog and sign up for our newsletter. Then you’ll get notified when we publish our upcoming business plan template for vertical farms.

The questions you need to ask when starting

When setting up a vertical farm, you need to assess the operating cost and resources thoroughly. Resources must include calculations such as labor, supply chain, sowing, and nutrients.

To make the calculations, you need to ask yourself some much-needed questions like;

  • How is your location? Is it a hot or cold climate?
  • How large will your crops be?
  • What is the growth period for the specific plants you will cultivate? This determines how many crops you can harvest in a year.
  • Can your equipment recreate optimal conditions for the plants at low operating costs?
  • How much return can you expect?

Each of these questions requires that you look at the details of your production line and make a correct calculation of the cost of your infrastructure, such as the seeds, equipment, machinery, lamps, substrate, etc.

You must also decide whether you want a fully automated or semi-manual production. Of course, you’ll need labor either way. The difference is how many you have to hire and what kind of knowledge or skills they need.

When we developed the Avisomo-system, we planned for you to get started small and scale-up. This way, you can start a small manual production to familiarize yourself with the system and then invest in larger facilities with appropriate automation.

This approach increases the likelihood of success considerably. You get the opportunity to qualify the market in advance by delivering samples and ensuring stable production before you take on significant investments.

Investor interest affects vertical farming economics

For those who succeed in vertical farming, the rewards can be considerable.

A research report from Emergen Research from 2020 shows that the global market value of vertical agriculture is 2.9 billion USD, with an expected growth of 20% per year. It is expected that the sector will be worth $ 11.7 billion by 2027.

Naturally, this has piqued the interest of that many investors.

In the United States, some big investments have been made in companies such as Brightfarms and Plenty in recent years. In 2020, even the government of Abu Dhabi invested $ 100 million in vertical agriculture . These are companies that will compete with the existing food production system.

But for every success story, there are several that have ended up with such high capital costs that it will take them decades to create profitability. Or even worse: They have unnecessarily high operating costs, making it impossible for them to achieve profitability.

Avisomo has excellent solutions for getting started with vertical agriculture to increase the efficiency of your farm or create a new department elsewhere.

In addition, we are in contact with several investors who would like to invest in this industry. It’s seen as a safe investment because everyone needs food!

Heaps of plants growing in a vertical farming system.

Vertical farming profitability

Creating profitability in vertical farming is about having a good plant factory.

A good plant factory is located in a cool and well-insulated building, which results in lower operating costs.

You will also have to depend on good cooling and circulation to reduce the heat from the lamps and transport away moisture that the plants emit.

Electricity costs are therefore affected by how well insulated and how naturally cool the premises are, cooling, ventilation, and the efficiency of the lamps.

Avisomo uses market-leading LED grow lights that, when used correctly, provide lower costs than other lamps.

There are many different solutions for vertical agriculture when it comes to stacking plants. Some suppliers have specialized solutions for specific plants, while others have solutions that can be used for many types of plants.

Avisomo uses standardized trolleys that are already used in Norwegian agriculture. This significantly reduces investment costs since you can use the same trays and pots you are used to.

We will also take a closer look at:

  • The main reason for profitability in a plant factory
  • Use of light
  • Climate control

Related article: How to reduce vertical farming energy consumption?

The game-changer that turned plant factories into big business

Many exponential developments have contributed to better achievements in vertical agriculture in the last ten years alone. LED lamps have become significantly better, renewable energy has become considerably cheaper, and we’ve seen the same development for air conditioning and dehumidification.

This is why vertical agriculture or plant factories have gone from red figures to solid profits in many places.

Plant factories are known to be massive investments. Avisomo has addressed this by offering a cost-effective way to get started: The revenue is higher than the cost, and the investment is replaced with regular monthly expenses instead. We also use standardized components to keep costs low.

The fact that the technology is more accessible than ever has contributed to making such models possible.

Grow lights are the key to good vertical farming economics

One of the biggest challenges in creating profitability in vertical agriculture is that different plants will need different lighting conditions. Even the slightest mistake can lead to increased costs and lower returns, which is what you want to avoid. 

Take LED lamps. This type of light can account for 30% of start-up costs, and depending on other factors, power can account for anything between 25 – 65% of your operating costs. So, just optimizing the light spectrum of your crops will reduce operating costs majorly. 

In vertical agriculture, we often talk about how many micromoles are needed for a plant to develop properly. If, for example, you give the plants 200 micromoles and, in reality, they only need 180 micromoles, you are simply wasting 10% of the light you’re using.

More importantly, the light should always hit the plants. The photons that hit something other than the plant leaves are just a waste of energy.

Therefore, you must choose suitable lamps from the start. Don’t fall into the position where the lights use more energy than they need. And ensure that you work with someone who understands the technology, the product, and the current data.

Relevant article: Why is LED grow lights best for vertical farming?

Hand checking plant growth in a vertical farm.

Technological advances and replacement of lamps

In 2021, the LED industry reached a new peak. Knowing that the next generation of LED’s will appear on the market in a few years, we’ve taken into account that the older lamps must be replaced. When they are to be replaced, it must be possible to do so as smoothly and effortlessly as possible. 

At Avisomo, we’ve made it extremely easy to replace the lamps you no longer need. It will require very little time, and most importantly, it will not disturb the production process.

When new lamps arrive, you can buy them directly from us with the same fastening mechanism as their predecessor. You will never be left with a bunch of lights you do not need. We then take the used ones back and give them a new life!

It’s good to note that replacing lamps is a part of the operating costs that must be balanced against the capital costs and earnings to create great profitability in vertical agriculture.

Let the laws of physics help you create profitability

By having specialists on your team, you can avoid mistakes and increase your profit margins. Specialists can help you create different spectrums that use minimal energy and give you the intensity and spectrum your plants need to grow – no more and no less.

Also, remember to implement due diligence when it comes to LED lamps. Cheap is not necessarily best. Cheap lamps may have lower CRIs, poor phosphor and color shades, and will not provide the right amount of light.

One of the biggest pitfalls in the LED industry is that the diodes and resistors are soldered together too tightly. This is done to make the lamps as small and compact as possible. Unfortunately, this creates more heat in some places than necessary, which drastically reduces the lifespan of the lamps. The heating of the circuit boards and poor heat dissipation are the main reasons for a short lifespan. 

Therefore, it is essential not to be seduced by a supplier but to look at its science. Light has a weaker effect over long distances, and you must investigate whether what the manufacturer promises is possible according to the laws of physics.

Related article: Vertical farming research

Climate control equals cost control

In vertical farming, you have complete control over the lighting conditions. You also have total control over the climate. Since vertical farming takes place indoors, you also get a degree of built-in pest control as an extra benefit.

In addition, avoiding the cost of pesticides gives you greater control over your crops. This is how you get predictability and how you can plan your crops carefully.

This is a big advantage as we are likely to experience more extreme weather in the future. Both extreme drought and extreme rainfall can damage crops or reduce production predictability.

Vertical farming is not affected by such extreme weather and can increase your bottom line.

With the help of climate control and access to light and nutrients, you can grow the plants as you wish. For example, you can influence whether the plant grows tall or in a more compact shape and whether it grows more or fewer leaves. You can also control the aroma and nutritional content of the final product.

All of these are things we can do or have done in our test facilities. The most crucial factor is the intensity of light and color spectrum, but fertilizing the plant at different stages of the plant’s growth also affects the result.

How does labor affect vertical farming economics?

Labour is not cheap, so you need to limit your labor needs as much as possible. First, you need to find out how much labor you need. This depends on several factors.

Number of levels

Some systems have many levels, which can seem wise since you will get more square meters of cultivation area per square meter of premises. However, this may not always be the case. 

The disadvantage of many levels is the limited access to the higher levels, which will require expensive equipment to inspect and harvest the crop. This also means that there must be enough space between the shelves, which reduces the cultivation area.

In addition, employees must work at height and operate equipment, which also entails costs for training.

The Avisomo-system is built so that the plants can stand tight and be inspected without additional equipment. You can also automate most of the production as well. 

Automation leads to fewer employees

If you invest in full automation with a sowing machine, robot, and harvesting line, you can significantly reduce the cost of labor and increase profitability.

The difference between manual and automated production is quite drastic:

With complete automation, one worker can handle 550 stations. Then you only need to monitor the production and take measures if problems arise.

On a farm without automation (but with innovative tools), one person can handle 80 stations.

Therefore, labor is an important factor to consider when trying to create profitability in vertical agriculture.

What should you cultivate to strengthen your economy?

When it comes to what to grow, you have many choices.

Although it’s technically possible to produce any plant, some plants give higher yields than others. Therefore, to ensure profitability, you should focus on crops that grow fast and have a high market value.

These plants will be the most cost-effective.

Therefore, many of those who run vertical farming facilities focus on high plant density and fast-growing crops where the whole plant can be sold, such as herbs and lettuce. These plants typically need fewer resources to grow and can be sold at a higher margin than, for example, root vegetables.

Another option worth exploring is to take advantage of the high germination rate and the increased rate you can achieve in a controlled environment. You can sell small plants to commercial producers who focus on field and greenhouse production. 

All-year-round producers need good quality small plants, and there is a desire for more small plant producers in Norway as most people buy such plants from abroad with a high risk of transport damage, diseases, and other problems.

Organic crops might be the future

If you want increased profitability in vertical agriculture, you must sell your products at the right price.

Producers engaged in vertical farming have already begun to increase prices, but it is also crucial to find the right price point for each crop.

Sales of organic foods are also increasing as consumers become more aware of what they eat and what effect the food has on their health. As a result, the organic food market is predicted to be worth $ 320 billion by 2025.

The increased demand for organic products is also one of the reasons why it is predicted that the vertical agricultural sector will increase to 11.7 billion USD by 2027.

Since vertical farming provides your crops with natural protection against pests and plant diseases, this is an excellent production method for growing organic produce.

In the long run, organic food from vertical agriculture will cause organic food prices to fall, but this will make production more profitable because people will buy more organic produce.

Vertical farming in the process of achieving good economics.

The long-term perspective is important

Although start-up costs can be high, it is important to look at the long-term perspective regarding climate concerns, less accessible land areas, unpredictable weather conditions, climate change, and the limited resources we have to secure food for the ever-growing world population.

Even though we are now starting to see some companies with great success in which a lot is being invested, we still have to be wary. 

CEO of British Crop Health and Protection, Fraser Black , compares the industry with electric cars and believes the industry is following the same trend. More people are starting to make a profit, and the market is developing in a positive direction. Vertical farms can compete with more traditional production methods, especially in northern countries such as Russia, Finland, Sweden, Norway, and Canada.

A changing market will increase profitability

As mentioned, the market is constantly evolving, and the benefits of vertical agriculture make it interesting for many private equity funds and venture capital funds to invest in the sector.

Some of the benefits are that you save costs on water and pesticides, while you can harvest crops throughout the year and grow more per square meter.

Related article: Vertical farming vs. traditional farming

For the customers, some of the advantages are that you can make the produce more nutritious. The crop is also often fresher when it arrives on the shelves due to a shorter transport route and more predictability in production. This also leads to less wastage because the products have a longer shelf life.

It will also be cheaper to run your vertical farm when you have established your production, gained more knowledge, and the technology develops further. This also makes it easier to increase profitability.

This is something we have a strong focus on in Avisomo. Therefore we designed our system to make it easy to always take advantage of new developments in the market and technology.

The system can be further developed and upgraded but never needs replacing!

Take control of your vertical farm’s economy from the start

To ensure profitability from the beginning, you must think carefully through all aspects of production.

If you establish the right kind of production for your geographical location and your market, you will be able to create profitability from the start.

Related article: Vertical farming – From concept to profit

You need to choose suitable systems, plants, and much more to manage this. At Avisomo, we have experience with this and can help you with the choices you have to make.

Ensure profitability with Avisomo’s vertical farming system

Our system makes it easy to take control of vertical farming economics. By relying on modular units that can be connected, we reduce investment costs and standardize production figures. This makes it easy to calculate the profit!

In an Avisomo cultivation station (standard), you can accommodate 3 CC trolleys with four levels. This corresponds to a cultivation area of ​​11 sqm. In this area, you can fit 480 pots with a distance of 15 cm between the pots (as recommended by NLR).

Suppose you are growing herbs in peat that are sold in pots. Pots, peat, and seeds can cost between 2 and 3 NOK per pot, depending on how you choose to do it. Then there are operating costs in relation to lighting, ventilation, maintenance, and staffing. Many things come into play here, but these variables usually come to between 3 to 5 NOK per pot. If you assume a bulk price of 12 to 15 NOK per pot, you have a solid profit.

The profit is significantly better if you can sell directly to consumers, but there may be increased costs in connection with sales and the market.

These figures are experience figures from our test facility at Skreia, where we currently produce a variety of herbs, lettuce, and microgreens for the local market in Oslo.

If you have 1/3 of each plant type, you will be able to achieve 9,290 NOK in profit per station.

  • Vertical farming business

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Please note you do not have access to teaching notes, using bibliometric analysis to map innovative business models for vertical farm entrepreneurs.

British Food Journal

ISSN : 0007-070X

Article publication date: 10 January 2022

Issue publication date: 8 June 2022

This paper aims to explore the literature on vertical farming to define key elements to outline a business model for entrepreneurs. The research aims to stimulate entrepreneurship for vertical farming in a smart cities' context, recognising urban agriculture as technology to satisfy increasing food needs.

Design/methodology/approach

The research conducts a structured literature review on 186 articles on vertical farming extracted from the Scopus. Moreover, the bibliometric analysis revealed the descriptive statistics on this field and the main themes through the authors' keywords.

Different perspectives showed the multidisciplinary nature of the topic and how the intersection of different skills is necessary to understand the subject entirely. The keywords analysis allowed for identifying the topics covered by the authors and the business model's elements.

Research limitations/implications

The research explores a topic in the embryonic stage to define key strands of literature. It provides business model insights extending George and Bock's (2011) research to stimulate entrepreneurship in vertical farming. Limitations arise from the sources used to develop our analysis and how the topic appears as a frontier innovation.

Originality/value

Originality is the integration of literature strands related to vertical farming, highlighting its multidisciplinary nature to provide a holistic understanding of the themes. In smart cities' context, innovations allow traditional business models to be interpreted in a novel perspective and revealed the elements for transforming vertical farming from innovative technology to an effective source of food sustenance. Finally, the paper suggests a new methodology application for the analysis of word clusters by integrating correspondence analysis and multidimensional scaling analysis.

  • Vertical farm
  • Business model
  • Agricultural entrepreneurship

Biancone, P.P. , Brescia, V. , Lanzalonga, F. and Alam, G.M. (2022), "Using bibliometric analysis to map innovative business models for vertical farm entrepreneurs", British Food Journal , Vol. 124 No. 7, pp. 2239-2261. https://doi.org/10.1108/BFJ-08-2021-0904

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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Business models in vertical farming: IDTechEx

The concept of vertical farming, the idea that crops can be grown much more efficiently indoors under controlled environmental conditions than conventional farmland would have been possible, has captured the imagination of entrepreneurs and investors alike, with dozens of start-ups around the world raising ever-increasing amounts of investor capital.

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The recent IDTechEx report ‘Vertical Farming 2020-2030’ explores the technologies and market factors that shape this rapidly expanding industry.

The ongoing argument within the industry is about size – is it better to focus on building a large, highly automated plant factory to minimise production costs, or is a small, more flexible approach the best way to set up a vertical farm?

This question arises from some of the challenges facing the vertical farming industry. Setting up and running a vertical farm is not cheap, and many vertical farming companies have struggled to overcome spiralling labour and power costs, alongside unforeseen logistical complexities, and problems with maintaining an optimum growing environment.

A potential solution to some of these problems is the construction of a very large vertical farm , which allows the power costs to be averaged over a large quantity of crops. In addition, large vertical farms make it easier to justify the use of advanced automation systems that can help reduce labour costs, while the cost of automated systems is also spread over large quantities of crops.

Such economies of scale can help a vertical farm to begin to achieve price parity with a conventional farm, something that has long eluded smaller vertical farms , which are often forced to sell products in premium categories. Large vertical farms producing large quantities of crops can also be more easily integrated into existing food supply chain structures, for example, next to the main distribution centre of the supermarket.

One company trying to use this scale-based approach is the Jones Food Company , a British vertical farm start-up that currently operates the largest vertical farm in Europe. The company believes that the only way for vertical farming to be successful in the long term is to achieve price parity with conventional farming, which it hopes to achieve through automation and the operation of large scale facilities near distribution centres.

The company draws its inspiration from car factories – it is far more cost-effective to produce cars in a large central plant than it would be to produce them in small premises near dealerships, and Jones Food Company believes that the same logic applies to vertical farming .

Crops grown in distribution centres are still able to reach consumers quickly, often within a day of harvesting, and the company does not believe that the hyper-local model promoted by certain competitors is worth the inefficiencies and costs of many small facilities located in city centres.

Several other vertical farmers are following this approach, with New Jersey’s start-up, AeroFarms , announcing in 2019 that it would invest US$42mn to build a 150,000sq foot facility in Danville, Virginia, which the company claims will be the largest in the world. Jeff Bezos-backed Plenty operates a 52,000sq foot facility in South San Francisco to maximise production efficiency to improve the economy of vertical farming.

Not everyone, however, agrees with this large-scale approach. Large installations and automation are expensive, with large installations costing tens of millions of dollars. While this approach may make sense for a car manufacturing plant or other high-margin products, for low-margin products such as fresh produce , it may take decades to repay this initial investment.

In addition, supply and demand for fresh produce are not always consistent, and pricing can often change, making it difficult to predict investment returns accurately, which can be very problematic for a vertical farm that has cost several million dollars to build. Moreover, many of the processes required to grow crops can not yet be addressed through off-the-shelf automation solutions, creating difficult engineering challenges that can make scale-up very complicated.

Another problem for very large vertical farms is that the operational complexity can increase considerably for larger farms. Plants are living organisms that can act in unpredictable ways, making it difficult to grow them in a way that resembles a factory production line. Plants emit heat and water vapour as they grow, while also requiring supplies of carbon dioxide and oxygen , in addition to nutrients.

Keeping crop inputs consistent across the entire vertical farm and managing waste heat and water vapour can also be very difficult in a high density growing area. Careful consideration of plant science, together with the planning of a logistic workflow to maximise efficiency, is needed to successfully operate a large-scale vertical farm.

As a result of these challenges, some companies have instead chosen to focus on smaller vertical farming facilities, choosing to focus on flexibility instead of economies of scale. For example, Freight Farms , which manufactures turnkey, modular vertical farms inside 40' containers, believes that smaller vertical farms provide a more flexible and targeted business model than large, centralised facilities.

Small vertical farms can be tailored to certain markets with gaps, such as crops that can't be imported, and transient falls in supply for high-demand crops and restaurants or food suppliers that need a specific ingredient. These are all markets in which large, warehouse-like, vertical farms are not easily accessible.

Rather than focusing on mass-produced, wholesale crops, where vertical farms will always struggle to compete on price with traditional farms and greenhouses , it may make more sense for vertical farm operators to focus on high-value crops with price premiums, perhaps on niche markets or on specialised applications.

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ProfitableVenture

Vertical Farming Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Agriculture Sector

Advertising Agency Business

Are you about starting a vertical farming company? If YES, here is a detailed sample vertical farming business plan template & FREE feasibility report.

Starting a vertical farming business is one sure way of earning good money. In the united states of America owing to the fact that you will definitely get all the support you need in terms of technology and finance to grow the business. If you are considering starting a vertical farm, the good news is that you can’t get it wrong because various types of crops can be cultivated via vertical farming and interestingly, agriculture produce are consumed all over the globe.

Starting a vertical farming business comes with its own fair share of challenges, but that does not rule out the fact that it is indeed a profitable business venture.

An aspiring entrepreneur can either choose to start the farm on a small scale or large scale depending on their financial status. Here is a sample vertical farming business plan template that can guide you to come up with yours within record time.

A Sample Vertical Farming Business Plan Template

1. industry overview.

Vertical farming is the method of cultivating crops in vertically stacked layers. It often incorporates controlled-environment agriculture which aims to optimize plant growth, and soil-less farming techniques such as hydroponics, aquaponics, and aeroponics.

Some common choices of structures to house vertical farming systems include buildings, shipping containers, underground tunnels, and abandoned mine shafts.

Vertical farms come in different shapes and sizes, it could be simple two-level or wall-mounted systems or large warehouses several stories tall. But all vertical farms use one of three soil-free systems for providing nutrients to plants; hydroponic, aeroponic, or aquaponic.

It helps to grow small size crops like Greens (Lettuce, Broccoli, Amaranthus, Tuber crops et al) and medium sized crops (Cabbage, cauliflower, Tomato, brinjal et al) than big sized crops (Maize, Sorghum et al). Vertical farming is rapidly gaining entrance in our world today. Vertical farming gives room for greater control over the growing environment of crops.

Dependent upon the technicality and specification of a vertical farming design, some of the important factors which may be controlled include temperature, levels of light and shade, irrigation, fertilizer application, and atmospheric humidity et al.

This is so because vertical farming enables certain crops to be grown all though the year irrespective of the climatic conditions. Vertical farming is increasingly becoming an important factor in the food supply chain of high-latitude countries.

The vertical line of business is indeed a large industry and a recent reports released by Beyer shows that the AeroFarms building cost an estimated $39 million for what amounted to less than two acres of farm land, noting in contrast that an acre of farmland in Iowa has an average cost less than $8,000.

In the united states of America, Chicago is home to several vertical farms, while New Jersey is home to AeroFarms, the world’s largest vertical farm. Other countries such as Japan, Singapore, Italy and Brazil have also seen more vertical farms.

2. Executive Summary

Kelly Norman® Vertical Farms, LLC is a registered and licensed farming business that will be based in the outskirts of East Rutherford, New Jersey – United States. We have done our detailed market research and feasibility studies and we were able to secure an ideal facility to start our vertical farm.

We will construct different shapes and sizes, both simple two-level and wall-mounted systems and large warehouses several stories tall. Our vertical farms will make use of three soil-free systems for providing nutrients to plants; hydroponic, aeroponic, or aquaponic.

At Kelly Norman® Vertical Farms, LLC we will be involved in the cultivation of common crops grown indoors such as greens, microgreens and herbs, vine crops, cannabis, some fruits, and flowers or nursery crops, tubers, mushrooms, insects, hops, algae, and commodity crops (corn and wheat) et al.

In the nearest future, hopefully within the first five years of officially running Kelly Norman® Vertical Farms, LLC, we will start our food processing and packaging plant and also start exporting our agriculture produce to other parts of the world.

Which is why aside from the fact that we’ve secured the farming are and most of the farming equipment and machines, we have also hired some key employees who are currently undergoing training so as to be able to fit into the ideal picture of the 21 st century vertical farming business workforce that we want to build.

We are in the vertical farming business because we want to leverage on the vast opportunities available in the agriculture industry, to contribute our quota in growing the U.S. economy, in national food production, raw materials production for industries, to export agriculture produce from the United States to other countries and over and above to make profit.

Kelly Norman® Vertical Farms, LLC is well positioned to become one of the leading vertical farming businesses in the United States of America, which is why we have been able to source for the best hands and machines to run the business with. We have put process and strategies in place that will help us employ best practices when it comes to vertical farming processes.

Kelly Norman® Vertical Farms, LLC is a private registered company that is owned by Kelly Norman and his immediate family members. Kelly Norman has a Degree in Agriculture from the University of New Jersey and he has over 23 years’ experience in the industry.

3. Our Products and Services

Kelly Norman® Vertical Farms, LLC will be involved in cultivating various crops via the vertical farming model. We are in business to produce both vegetable, and fruits in commercial quantities. We will also ensure that we operate a standard food processing and packaging plant as part of our complimentary business.

These are the areas we will concentrate on in our vertical farming business. If need arises, we will definitely add more agriculture produce to our list;

  • Greens, microgreens and herbs, vine crops, cannabis, some fruits, and flowers or nursery crops, tubers, mushrooms, insects, hops, algae, and commodity crops (corn and wheat).
  • Plant transplant services
  • Vegetable and fruit processing and packaging
  • Vertical farming construction, consultancy and advisory services

4. Our Mission and Vision Statement

  • Our Vision is to become one of the top 10 vertical farm brands not just in the United States of America but also on the global stage.
  • Our mission is to go into full – time cultivation of vegetables, and fruits that will not only be consumed in the United States of America, but also exported to other parts of the world.
  • We want our farm produce to flood the nooks and crannies of the United States and other countries of the world.

Our Business Structure

Kelly Norman® Vertical Farms, LLC is family owned and managed vertical farm that is into the cultivation of vegetables and fruits. At Kelly Norman® Vertical Farms, LLC, we will ensure that we hire people that are qualified, hardworking, creative, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders.

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the board of trustees of the company. In view of the above, we have decided to hire qualified and competent hands to occupy the following positions;

  • Chief Operating Officer

Vertical Farm Manager

Administrator/Accountant

  • Crop (Vegetable and Fruits) Cultivation Manager/Supervisor

Vegetable and Fruits Processing and Packaging Plant Manager/Supervisor

  • Sales and Marketing Executive
  • Front Desk Officer

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

  • Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
  • Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
  • Responsible for fixing prices and signing business deals
  • Responsible for providing direction for the business
  • Responsible for signing checks and documents on behalf of the company
  • Evaluates the success of the organization
  • Responsible for the planning, management and coordinating all farm activities across the various sections on behalf of the organization
  • Supervise other section managers
  • Ensure compliance during project executions (especially in the construction of vertical farming structures et al)
  • Providing advice on the management of farming activities across all sections
  • Responsible for carrying out risk assessment
  • Using IT systems and software to keep track of people and progress of the growth of crops
  • Responsible for overseeing the accounting, costing and sale of farm produce after harvest
  • Represent the organization’s interest at various stakeholders’ meetings
  • Ensures that farming goals desired result are achieved, the most efficient resources (manpower, equipment, tools and chemicals et al) are utilized and different interests involved are satisfied. Responsible for preparing financial reports, budgets, and financial statements for the organization
  • Responsible for overseeing the smooth running of HR and administrative tasks for the organization
  • Handles all financial transactions for the company
  • Defining job positions for recruitment and managing interviewing process
  • Carrying out staff induction for new team members
  • Responsible for training, evaluation and assessment of employees
  • Oversee the smooth running of the daily farming activities across the various farming sections.
  • Carrying out induction for new team members
  • Responsible for preparing financial reports, budgets, and financial statements for the organization
  • Responsible for financial forecasting and risks analysis.
  • Responsible for developing and managing financial systems and policies
  • Responsible for administering payrolls
  • Ensuring compliance with taxation legislation
  • Serves as internal auditor for the company

Crop (Vegetable and fruits) Cultivation Manager/Supervisor

  • Responsible for the cultivation of crops such as; cucumbers, shallots, tomatoes, lettuce, chilies, capsicum, red salad onions and snow peas, Chinese cabbage, lettuce, basil, roses, tomatoes, okra, cantaloupe and bell peppers, watercress, basil, coriander, parsley, lemongrass, sage, beans, peas, kohlrabi, taro, radishes, strawberries, melons, onions, turnips, parsnips, sweet potato, cauliflower, cabbage, broccoli, and eggplant.
  • Handles plant transplant services
  • Supervises other workers within the department
  • Work closely with the General Manager to achieve the organizations’ goals and objectives
  • Responsible for managing the fruits and vegetable processing and packaging plant section of the business

Sales and Marketing Officer

  • Identify, prioritize, and reach out to new markets for our agriculture produce, processed food, new partners, and business opportunities within the industry
  • Document all customer contact and information.
  • Represent the company in strategic meetings
  • Help increase sales and growth for the company

Front Desk/Customer’s Service Officer

  • Welcomes clients and visitors by greeting them in person or on the telephone; answering or directing inquiries.
  • Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
  • Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s farm produce
  • Manages administrative duties assigned by the HR manager in an effective and timely manner
  • Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to potential clients when they make enquiries

6. SWOT Analysis

Kelly Norman® Vertical Farms, LLC do not intend to launch out with trial and error hence the need to conduct a proper SWOT analysis.

We know that if we get it right from the onset, we would have succeeded in creating the foundation that will help us build a standard commercial vertical farm that will favorably compete with leading vertical farms in the United States of America.

Here is a summary from the result of the SWOT analysis that was conducted on behalf of Kelly Norman® Vertical Farms, LLC;

  • Year-round crop production.
  • Eliminates agricultural runoff.
  • Significantly reduces use of fossil fuels (farm machines and transport of crops)
  • Makes use of abandoned or unused properties.
  • No weather-related crop failures.
  • Offers the possibility of sustainability for urban centers.

Part of the weakness that will affect us is the fact that vertical farming technologies face economic challenges with large start-up costs compared to traditional farms.

Other weaknesses could be that we are a new commercial vertical farm in the United States, it might take some time for our organization to break into the market and gain acceptance especially from international markets in the already saturated and highly competitive commercial farming industry; that is perhaps our major weakness.

  • Opportunities:

The opportunities available to us are unlimited. The fact that vertical farms attempt to produce food in challenging environments, like where arable land is rare or unavailable. Having greater output from a small cultivation area is not the only advantage of vertical farming, vertical farming produces more crops from the same square footage of growing area.

Part of the threats we will face is the fact that vertical farms face large energy demands due to the use of supplementary light like LEDs. Moreover, if non-renewable energy is used to meet these energy demands, vertical farms could produce more pollution than traditional farms or greenhouses.

7. MARKET ANALYSIS

  • Market Trends

If you are conversant with rising technology and scientific development in the agriculture industry, you will quite agree that vertical farming is at the front burner. Vertical farming is rapidly gaining entrance in our world today.

While vertical farming can help improve a community’s economic and social base, most of the debate surrounding its sustainability is centered around its environmental base. Sustainability also depends on the efficient use of local resources such as water and land. Vertical farms also achieve a higher crop yield.

Vertical farming gives room for greater control over the growing environment of various crops. Dependent upon the technicality and specification of a greenhouse design, some of the important factors which may be controlled include temperature, levels of light and shade, irrigation, fertilizer application, and atmospheric humidity et al.

Basically, vertical farming methods are used to overcome shortcomings in the growing qualities of a piece of land, such as a short growing season or poor light levels. In essence, they are designed to improve food production in marginal environments.

Interestingly, vertical farming methods enable certain crops to be grown all though the year irrespective of the climatic conditions. Greenhouses are increasingly becoming an important factor in the food supply chain of high-latitude countries.

Lastly, it is important to point out that the dependence on technology is a big disadvantage to vertical farming. If a vertical farm loses power for one day then it will be a big loss in production. While vertical farm companies promise more-sustainable produce by growing it closer to consumers and using renewable energy to power their operations.

8. Our Target Market

The end consumer of vertical farm produce and also those who benefits from the business value chain are all encompassing. Every household consumes produce from vertical farms be it vegetables, or fruits et al. In essence a commercial vertical farmer should be able to sell his or her farm produce to as many people as possible.

We will ensure that we position our business to attract consumers of agriculture produce not just in the United States of America alone but also other parts of the world which is why we will be exporting some of our farm produce either in raw form or processed form to other countries of the world.

Our competitive advantage

Kelly Norman® Vertical Farms, LLC is fully aware that there are competitions when it comes to selling vertical farm produce, which is why we decided to carry out thorough research to know how to take advantage of the available market in the United States and in other parts of the world.

We have done our homework and we have been able to highlight some factors that will give us competitive advantage in the marketplace; some of the factors are effective and reliable vertical farming processes that can help us cultivate and sell our produce at competitive prices, good network and excellent relationship management.

Our competitive advantage lies in the power of our team; our workforce. We have a team of hardworking and highly proficient vertical farmers, a team with excellent qualifications and experience in various niche areas in the industry. Aside from the synergy that exists in our carefully selected team members, we have some of the latest and efficient vertical farm machines and equipment and we will be guided by best practices in the industry.

Another competitive advantage that we are bringing to the industry is the fact that we have designed our business in such a way that we will operate an all-round vertical farm that will be involved in diverse areas such as crop cultivation, plant transplant services and food processing and packaging plant. With this, we will be able to take advantage of all the available opportunities within the industry.

Lastly, all our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our objectives.

9. SALES AND MARKETING STRATEGY

  • Sources of Income

Kelly Norman® Vertical Farms, LLC is in the vertical farming business for the purpose of maximizing profits hence we have decided to explore all the available opportunities within the industry. Below are the sources we intend exploring to generate income for Kelly Norman® Vertical Farms, LLC;

  • The more common crops that will be grown by us in our vertical farm are greens, microgreens and herbs, vine crops, cannabis, some fruits, and flowers or nursery crops, tubers, mushrooms, insects, hops, algae, and commodity crops (corn and wheat).

10. Sales Forecast

From the survey conducted, we were are able to discover that the sales generated by a vertical commercial farm depends on the size of the farm, and the nature of the vertical commercial farm. We have perfected our sales and marketing strategies and we are quite optimistic that we will meet or even surpass our set sales target.

We have been able to examine the agriculture industry cum vertical commercial farm business, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the projections that we were able to come up with for the first three years of running Kelly Norman® Vertical Farms, LLC;

  • First Fiscal Year (FY1):  $280,000
  • Second Fiscal Year (FY2):  $500,000
  • Third Fiscal Year (FY3):  $800,000

N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown that can impact negatively on household spending.

  • Marketing Strategy and Sales Strategy

We are quite aware that the reason why some vertical farms hardly make good profits is their inability to sell off their farm produce especially perishable crops as at when due. In view of that, we decided to set up a standard food processing plant to help us maximize profits.

Our sales and marketing team will be recruited based on their vast experience in the commercial farms industry and they will be trained on a regular basis so as to be well equipped to meet their set targets and the overall business goal of Kelly Norman® Vertical Farms, LLC.

Our goal is to grow Kelly Norman® Vertical Farms, LLC to become one of the leading vertical farms in the United States of America which is why we have mapped out strategies that will help us take advantage of the available market. In summary, Kelly Norman® Vertical Farms, LLC will adopt the following strategies in marketing our commercial farm produce;

  • Introduce our business by sending introductory letters alongside our brochure to stake holders in the agriculture industry, companies that rely on the agriculture industry for their raw materials, hotels, restaurants and agriculture produce merchants et al.
  • Advertise our business and agriculture produce in agro – allied and food related magazines and websites
  • List our vertical farm on yellow pages ads
  • Attend related agriculture and food expos, seminars, and business fairs et al
  • Leverage on the internet to promote our business
  • Engage in direct marketing
  • Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

Any business that wants to grow beyond the corner of the street or the city they are operating from must be ready to advertise and promote the business. We intend growing our business which is why we have perfected plans to build our brand via every available means.

Below are the platforms you can leverage on to boost our vertical farm brand and to promote and advertise our business;

  • Place adverts on both print (newspapers and magazines) and electronic media platforms
  • Sponsor relevant community based events/programs
  • Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, YouTube, Google + et al to promote our business
  • Install our Billboards in strategic locations all around East Rutherford – New Jersey
  • Engage in roadshow from time to time in targeted neighborhoods
  • Distribute our fliers and handbills in target areas
  • Contact corporate organizations and residence in our target areas by calling them up and informing them of Kelly Norman® Vertical Farms, LLC and the farm produce we sell
  • List our vertical farming business in local directories/yellow pages
  • Advertise our vertical farming business in our official website and employ strategies that will help us pull traffic to the site.
  • Ensure that all our staff members wear our branded shirts and all our vehicles are well branded with our company logo et al.

12. Our Pricing Strategy

We are quite aware that one of the easiest means of penetrating the market and acquiring loads of customers for our produce is to sell them at competitive prices hence we will ensure that the prices of our fruits and vegetables are going to be what other farmers would look towards beating.

  • Payment Options

The payment policy adopted by Kelly Norman® Vertical Farms, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulations of the United States of America. Here are the payment options that Kelly Norman® Vertical Farms, LLC will make available to her clients;

  • Payment with cash
  • Payment via online bank transfer
  • Payment via check
  • Payment via Point of Sale Machines (POS Machines)
  • Payment via mobile money transfer

In view of the above, we have chosen banking platforms that will enable our clients make payment for our farm produce without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.

13. Startup Expenditure (Budget)

When it comes to calculating the cost of starting a vertical farm, there are some key factors that should serve as a guide. The most important expenses are the construction of the vertical farming structures. Below are some of the basic areas we will spend our startup capital in setting up our vertical farm;

  • The Total Fee for incorporating the Business (aquaponics commercial farm) in United States of America – $750.
  • The budget for key insurance policies, permits and business license – $2,500
  • The amount needed to acquire / lease a farm land – $50,000
  • The amount required for preparing the farm land (for construction of vertical farming structures) – $70,000
  • The cost for acquiring the required working tools and equipment / machines / stacked layers et al – $25,000
  • The amount required for purchase of seedlings – $20,000
  • The Cost of Launching an official Website – $600
  • The amount required for payment of workers for a period of 3 months – $100,000
  • Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,000

Going by the report from detailed research and feasibility studies conducted, we will need an average of three hundred and fifty thousand dollars ($350,000) to start a standard vertical farm business in the United States of America.

Generating Funds/Startup Capital for Kelly Norman® Vertical Farms, LLC

No matter how fantastic your business idea might be, if you don’t have the money to finance the business, it might not become a reality. Finance is a very important factor when it comes to starting a business such as vertical farming. No doubt raising startup capital for a business might not come cheap, but it is a task that an entrepreneur must go through.

These are the areas where we intend sourcing for fund for Kelly Norman® Vertical Farms, LLC;

  • Generate part of the startup capital from personal savings and sale of his stocks
  • Generate part of the startup capital from friends and other extended family members
  • Generate a larger chunk of the startup capital from the bank (loan facility).

N.B: We have been able to generate about $100,000 (Personal savings $80,000 and soft loan from family members $20,000) and we are at the final stages of obtaining a loan facility of $250,000 from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business close shop.

One of our major goals of starting Kelly Norman® Vertical Farms, LLC is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to sell our farm produce a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while. Kelly Norman® Vertical Farms, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of.

Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner of our business strategy. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

  • Business Name Availability Check:>Completed
  • Business Incorporation: Completed
  • Opening of Corporate Bank Accounts: Completed
  • Opening Online Payment Platforms: Completed
  • Application and Obtaining Tax Payer’s ID : In Progress
  • Application for business license and permit: Completed
  • Purchase of Insurance for the Business: Completed
  • Leasing of farm land in East Rutherford – New Jersey: Completed
  • Conducting Feasibility Studies: Completed
  • Startup Capital Generation: Completed
  • writing of business plan: Completed
  • Drafting of Employee’s Handbook: Completed
  • Design of The Company’s Logo: Completed
  • Printing of Promotional Materials: Completed
  • Recruitment of employees: In Progress
  • Building/construction of vertical farming structures and facility: In Progress
  • Purchase of the needed working tools, machines and equipment: Completed
  • Creating Official Website for the Company : In Progress
  • Creating Awareness for the business (Business PR): In Progress
  • Farm land Treatment, Health and Safety Arrangement: In Progress
  • Establishing business relationship with key players in the industry (agriculture farm produce merchants, transporter/haulage and suppliers of seeds, fertilizers, pesticides and insecticides et al): Completed

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Is Vertical Farming Profitable? Guide to Build a Successful Farming Venture

  • What to pay attention to when doing a market research
  • The keys of crop selection for a profitable vertical farm
  • In-depth guide to the facility selection
  • How automation helps business metrics
  • Financial models with payback time calculated
  • Free tool to create your own vertical farming business model

Market research: What to pay attention to

Source: iFarm.

Contact iFarm to get a custom market research and financial plan for your vertical farm

“Recipe” for a high yield on a profitable vertical farm

Facility for a vertical farm: recommendations and calculations.

  • The ceiling height should range between 4.5-6 meters to maximize the growing area.
  • Choose sandwich panels, cellular concrete, inflatable, or any other type of building, appropriate for the climate zone.
  • Ensure a reliable water supply and efficient sewer system. Note that septic systems are only allowed for small farms (under 100 square meters).
  • The estimated available power needed for 1 m² of growing area is 0,1 to 0,4 kW depending on farm size and crop type.
  • The land plot should be within 1 hour driving distance from the city and have convenient traffic exchange.

Technology and automation for profitable farming

How profitable is vertical farming payback time, ifarm leafy greens technology, financial model for a profitable vertical farming venture.

  • Estimation of the cultivation area
  • Power requirements
  • Average daily electricity and water consumption
  • Total initial investments
  • Estimated monthly expenses

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Gulf Business

Masdar City launches first indoor vertical farm

business model vertical farm

The vertical farm uses 90-95 per cent less water than conventional farms

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Masdar City has partnered with Alesca Technologies, an agricultural technology company, to launch the city’s first indoor vertical farm.

Housed in repurposed shipping containers near Masdar City’s Eco-Plaza, the farm features two full‐size commercial farming containers that will generate upwards of 650kg of leafy greens per month all year round for a farm‐to-fork experience.

The first container is fully operational, with plans to expand to the second in the coming year.

The farm uses automated equipment and AI software to grow multiple varieties of leafy greens, lettuce and herbs that are fresh, free of harmful chemicals, and ready to eat.

Sebastien Miller, Masdar City’s manager of public realm, said. “We’re glad to be partnering with a company like Alesca, which is known as a test bed for the localisation of food production and producing high-quality food, both of which play a role in addressing food security and related climate change challenges.”

Benefits of the indoor vertical farm in Masdar City

The vertical farm uses 90-95 per cent less water than conventional farms.

The farm’s highly controlled and automated monitoring process helps maximise food production and minimise food waste.

Masdar City is educating the community about the potential of indoor vertical farming, which makes fresh, post-organic produce available locally while reducing carbon emissions related to the supply chain.

The Alesca indoor vertical farm also showcases the potential of multi-functional land use, which is particularly important in high-density cities.

“Using urban land for more than one purpose reduces cost, makes better use of limited space, and enhances urban resilience,” added Miller. “In the case of a vertical farm, the greenery can also contribute to improved air quality and reduced urban heat island effect.”

Alesca Technologies is part of Masdar City’s growing agri-tech cluster, which also includes other startups such as Circa Biotech, which uses black soldier flies to turn food waste into organic animal feed and other products, and HydroArtPod, which is bringing organic vertical farming into homes.

In other news, in November last year,  Masdar   City completed construction on the region’s first net-zero energy commercial building, called NZ1 .

The building was largely constructed with locally sourced, sustainable materials, with around 90 per cent of construction waste diverted from landfills.

NZ1 is designed to consume 53 per cent less energy than an equivalent conventional building. On-site solar panels will generate the building’s annual energy needs, making it ‘net-zero’ energy. Any excess energy produced will be fed into the Abu Dhabi electric grid.

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business model vertical farm

Mark Zuckerberg is risking a Steve Ballmer moment with his Apple Vision Pro takedown

  • Mark Zuckerberg trashed Apple's Vision Pro this week and called out Apple's "fanboys."
  • But Zuckerberg isn't the first to vocally dismiss an Apple flagship product.
  • Steve Ballmer infamously laughed off the iPhone at first.

Insider Today

Mark Zuckerberg posted a takedown this week of Apple’s just-launched Vision Pro, criticizing its cost and specs, and calling out Apple's "fanboys."

It was a surprising swipe from the Meta boss at one of his biggest virtual-reality rivals. But if history's any indication, underestimating Apple is a risky play.

After the iPhone launched in 2007, the outspoken Microsoft founder Steve Ballmer infamously laughed off the product.

"Five hundred dollars? Fully subsidized? With a plan?” Ballmer said at the time . “I said, that is the most expensive phone in the world, and it doesn't appeal to business customers because it doesn't have a keyboard — which makes it not a very good email machine. Now, it may sell very well or not."

It sold — very well.

Now Zuckerberg has hit out at Apple’s $3,500 Vision Pro, deriding Apple “fanboys” and saying they're hyping a product with inferior specs to Meta’s $500 competitor, the Quest headset.  

Zuckerberg said on top of being cheaper, the Quest had a brighter screen and was more comfortable than Apple's divisive device — though he did concede the Vision Pro had “really nice” eye tracking and resolution.

"I know that some fanboys get upset whenever anyone dares to question if Apple's going to be the leader in a new category," Zuckerberg said in an Instagram review of the Vision Pro posted Tuesday.

"But the reality is that every generation of computing has an open and a closed model," he said. "And yeah, in mobile, Apple's closed model won, but it's not always that way."

He added: "I really want to make sure that the open model wins out. Again, the future is not yet written."

business model vertical farm

Watch: Here’s the historic moment when Steve Jobs unveiled the first iPhone ten years ago

business model vertical farm

  • Main content

IMAGES

  1. How Vertical Farming Is Impacting The Food Supply Chain And Enabling

    business model vertical farm

  2. A Business Framework For Vertical Farming: An Interview With Emiel

    business model vertical farm

  3. 3 emerging trends in vertical farming that will cultivate the future of

    business model vertical farm

  4. ilimelgo's vertical farm introduces urban agriculture in grand paris

    business model vertical farm

  5. Indoor Vertical Urban Farming

    business model vertical farm

  6. 6 Use Cases of Factory Automation in Vertical Farming

    business model vertical farm

COMMENTS

  1. Inventing and scaling urban vertical farming

    When I did my research on this topic, I encountered two things: 1) there was a group of people who already farmed without soil as part of a movement called hydroponics, and 2) I saw these utopian pictures of plant-covered skyscrapers in cities, which gave me confidence that I could change the way we source and eat food.

  2. Vertical Agriculture Roadmap: From Concept to Profit

    Vertical or indoor farming is a combination of plant biology, hardware manufacturing, and greenhouse vertical farming software. A vertical farm is an enclosed environment providing all necessary resources to grow crops. You can build a farm in reused shipping containers, building sections, and even space stations.

  3. The business model of a successful vertical farm

    The consideration that is specific to a vertical farms business model include: target customers, crop mix, farm size, location, and finally a distribution strategy. Crop mix One of the most important issues in farm design and the business model is what crop (s) to grow?

  4. How to Create a Business Plan to Start a Vertical Farm

    We'll examine the necessary parts of a vertical farm business plan and walk you through the process of creating one. Before Writing Your Farm's Business Plan Before you jump in, there are a few steps you should take to build the groundwork for your new venture. Some of these you may need to research now and complete after funding is obtained.

  5. A Business Framework For Vertical Farming: An Interview With Emiel

    The development of a business framework for vertical farms was taken as the objective of this exploratory research because more substantial concepts, such as the " business model canvas ", could not be applied. We wanted to know the items of prime importance in strategic decision making on a vertical farm.

  6. Growing-Service Systems: New Business Models for Modular Urban-Vertical

    Growing-Service Systems: New Business Models for Modular Urban-Vertical Farming Michael Martin 1,2*† Maria J. Bustamante 3† 1 Division of Life Cycle Management, Department of Sustainable Society, IVL Swedish Environmental Research Institute, Stockholm, Sweden

  7. Business model configurations for successful vertical farming

    The research goals were met by conducting literature reviews coupled with a fuzzy-set qualitative comparative analysis (fsQCA) on five business model elements, "superior" OR "strong" performance as two possible outcomes, and the top-ranked global VF growers listed in the Crunchbase Database. Findings

  8. (PDF) Vertical Farms: A business model built for the future?

    Vertical Farms: A business model built for the future? June 2022 DOI: 10.13140/RG.2.2.32585.83048 Thesis for: Biotechnology and Entrepreneurship Advisor: Prof. Dr. Daniela Zirra Authors:...

  9. Business model configurations for successful vertical farming

    Originality/value This paper contributes to expanding the knowledge of business model theory, business model configurations and VF management, providing specific guidelines for vertical...

  10. Vertical farms, building a viable indoor farming model for cities

    But besides the technological aspect, to be promising and sustainable, the business model of an urban vertical farm should be viable. For instance, Infarm offers a high-potential commercial design for vertical farms. Infarm, for which I consult, is a startup created in 2013 in Germany that has now expanded to several European countries and has ...

  11. The Vertical Farm

    Vertical farming can allow former cropland to go back to nature and reverse the plundering of the earth. ... Switching to that business model, Harwood formed a new company called Aero Farm Systems ...

  12. Vertical farming economics in a nutshell

    For those who succeed in vertical farming, the rewards can be considerable. A research report from Emergen Research from 2020 shows that the global market value of vertical agriculture is 2.9 billion USD, with an expected growth of 20% per year. It is expected that the sector will be worth $ 11.7 billion by 2027.

  13. Using bibliometric analysis to map innovative business models for

    The keywords analysis allowed for identifying the topics covered by the authors and the business model's elements.,The research explores a topic in the embryonic stage to define key strands of literature. It provides business model insights extending George and Bock's (2011) research to stimulate entrepreneurship in vertical farming.

  14. Vertical farming business economic considerations FAQ

    The vertical farming business model is always calculated individually. The following indicators are taken into account: Information about the local sales market (consumer preferences, price and format of product — potted or cut plants) Crop assortment; The cost of energy; Worker wages in the region; Building size

  15. Business models in vertical farming: IDTechEx

    Several other vertical farmers are following this approach, with New Jersey's start-up, AeroFarms, announcing in 2019 that it would invest US$42mn to build a 150,000sq foot facility in Danville, Virginia, which the company claims will be the largest in the world. Jeff Bezos-backed Plenty operates a 52,000sq foot facility in South San ...

  16. "Our business model is a feasible solution for ...

    In our business model, vertical farming is a feasible solution for wholesalers and companies that are not necessarily at the top of the supply chain," according to Ben. The secret lies in applying technology that is capable of reducing labor and energy costs, as these are the biggest cost drivers. Reducing these costs will enable vertical ...

  17. PDF Analysis of Vertical Farming Business Model

    model, a case study was conducted with a vertical farming company in Sweden called Swegreen, and data on business model analysis and SWOT analysis were collected through an interview. Based on the findings, the company changed its business model from B2C to B2B based on past experiences to stay consistent in the economic sector and reduce costs.

  18. (PDF) Sustainable Business Model Innovation in Vertical Farming

    2.3 Sustainable Business Model Innovation in Vertical Farming Business 15 . viii . 3 METHODOLOGY 17 . 3.1 Research Design 17 . 3.2 Research Process 17 . 3.3 Research Method 18 .

  19. Vertical farming business planning services

    Get a full financial model and desk & field research to perfect your vertical farming business strategy. Take advantage of a special 15% discount on our pre-setup services pack: Vertical Farm Financial Model and Market Research. Enjoy an additional 5% discount on the entire project if you decide to start your farm with iFarm within 2 weeks ...

  20. PDF 10 Innovative Business Models for Agriculture and Farming

    Urban Vertical Farming 16 3. Agritourism And Educational Farms 22 4. Farm-To-Table Subscription Services 27 5. Aquaponics And Hydroponics Systems 32 6. Renewable Energy Farming 37 ... FARMING BUSINESS MODEL CANVAS Customer Segments - Urban residents seeking fresh produce - Restaurants and cafes focusing on local and organic

  21. Vertical Farming Business Plan [Sample Template]

    1. Industry Overview Vertical farming is the method of cultivating crops in vertically stacked layers. It often incorporates controlled-environment agriculture which aims to optimize plant growth, and soil-less farming techniques such as hydroponics, aquaponics, and aeroponics.

  22. Can vertical farming be profitable? Complete guide to profitable farming

    The vertical farming business model is always calculated individually. We take into account the consumer preferences on a particular market, crop assortment, the cost of energy, worker wages, facility size, and investments in the construction or repair of a site for a farm.

  23. Le Roots urban farm founders draw from finance ...

    It's a commercial indoor vertical farm growing high-quality, sustainable aeroponic and hydroponic produce. Plants are grown in 100 towers (he's got 100 more coming) in a 4,000-square-foot ...

  24. Why vertical farming is such an innovative business model

    The vertical farming concept has been around for over two decades; however, it has gained momentum in recent years, with many companies worldwide adopting the business model. This relatively recent type of business model is a transformational innovation .

  25. Masdar City unveils first indoor vertical farm

    The vertical farm uses 90-95 per cent less water than conventional farms. The farm's highly controlled and automated monitoring process helps maximise food production and minimise food waste.

  26. This Indoor Farming Firm Is Trying to Attract Workers to Agriculture

    Eden Green uses high-tech systems to grow greens indoors and reduce the unpredictability of farming. The company also aims to draw workers by offering health insurance, paid leave, and a 401(k).

  27. Patrick Mahomes Net Worth: How the Chiefs QB Spends His Money

    Patrick Mahomes is arguably the best player in the NFL. The superstar Kansas City Chiefs quarterback has won three Super Bowls and three Super Bowl MVPs in his career — all before turning 30. He ...

  28. Mark Zuckerberg Risks Steve Ballmer Moment With ...

    Mark Zuckerberg posted a takedown this week of Apple's just-launched Vision Pro, criticizing its cost and specs, and calling out Apple's "fanboys.". It was a surprising swipe from the Meta boss ...