Vertical farms will change the way we eat

Vertical farms will change the way we eat

What is the place where you would imagine the meeting between the greatest entrepreneurs in the agricultural sector in the world? Perhaps an immense patio on a ranch nestled in the belly of an Argentine pampas, with gentlemen with long mustaches and wide-brimmed hats? Hard to imagine. So much so that it is even easier to know when and where some of the greatest agricultural entrepreneurs in the coming decades really met: last June 23, in the huge conference room that dominates the first floor of the Marriott Hotel in Brooklyn, New York City. In suits, among stands full of agrotechnical innovations, dozens of them alternated between meetings and conferences in one of the last places that can be associated with traditional farms: a more than suitable scenario, on the other hand, to talk about vertical farming , the vertical farms.

It is from these that the vegetable food produced in the future will come, medical herbs for pharmaceuticals, microalgae for very different uses (such as microprocessor food), commodities such as cocoa or cotton. I ndoor AgTech Innovation summit, New York. In the city that never sleeps and where you can taste everything that tastes of the future, this event - the most important in the world on vertical farms - did not go unnoticed: at the inauguration there was the mayor Eric Adams, a real and his local celebrity who, despite that day the public debate in the States was centered on the rejection of his law on the limitation of weapons by the Supreme Court, did not give up his speech to enhance the possibilities of vertical farms: "We must return to urban agriculture, incentivizing urban farmers ".

Indoor Agtech - Inauguration of New York Mayor Eric L. Adams (Photo @IndoorAgtech)

Nicole Pereira PhotographyAfter Adams, the speakers on stage alternate in the large conference room. At one point, one of them refers to a very topical topic in Italy: "I will start by talking to you about the current situation of water scarcity that we are experiencing right now in Italy, which never thought it could experience a crisis like the one that we are experiencing in this period. The river Po, the fifth most important in Europe, is today in this situation: the drought of the Po affects the activity of 200,000 farms and puts at risk a third of Italian production and the well-being of millions of families ”. These are the words of Thomas Ambrosi, CEO of Ono Exponential Farming. Made in Italy company: one of the three Italians present at Indoor AgTech together with Planet Farms and Igrox. Ambrosi continues: “So what could be the solution? ". In the large room everyone has bet their business on one answer: vertical farming.

How vertical farms are born The vertical farming market The way to success: between final price and tech innovations Vertical farmers, a priority : cutting down the costs of LEDs The products of the future in vertical farms: not just cannabis How vertical farms are born It is no coincidence that Mayor Adams has baptized the largest world event on this development of modern agriculture: it is precisely in New York which originates vertical farming. "Actually, thinking about it, the basic idea was born thousands of years ago in Babylon, with the hanging gardens - Ambrosi tells - but what we mean by this new way of farming was born here in New York, by Columbia University Professor Dickson Despommier ”. Despommier assigned a sort of thesis to his students to understand if using the roof gardens of New York it would be possible to feed the population of the metropolis: “The answer was negative, but from this question we asked ourselves if it was possible to produce food vertically: this is where vertical farming is born ".

A business that began in the States, around 2004, with the first pioneer of the market, Aerofarms. Even today, the most important market is the US, with heavy disruptors like Plenty: in English it means "abundance" and this California-based company has plenty to sell. It has raised nearly $ 1 billion in investments so far and is now financially supported by a man named Jeff Bezos. Co-founder and cso Nate Storey, present at AgTech in New York, explains to why there is a growing interest in this business:

“Over the next 10 or 20 years the cost of food it will be higher, we will have less fresh water and people will live mainly in cities, far from the canonical places of agricultural production: this is the world in which we will live. And we will suffer heavy impacts caused by climate change for which some spaces will become unsuitable to continue today's agricultural production. How will we move crops, infrastructure or trees? The answer is that we will not be able to do it: or at least not at low cost, not in a simple or quick way "

Storey explains that what has the greatest impact on the planet is human agriculture: 70% of the earth's surface is been changed for agricultural purposes. “This is the big picture from which the big question arises: how are we going to keep feeding ourselves? Twenty thousand years ago we started moving the soil with a stick until we reached the last hundred years when we adopted precision agriculture. But we are still subject to the seasons, to the variability of the weather: half a century ago we started with greenhouses - a leap forward - which allowed more efficient crops, but still very energy-intensive, horizontal and subject to external factors. Now we can protect crops from external agents ”. Today, through vertical farming, the weather, climate change and soil quality are no longer determining factors in agricultural production.

"We are talking about an almost zero use of water (95% less) and soil (98% less) - continues the CEO of Ono - To give an idea, they can be obtained in a 72 thousand plants per square meter compared to 3 that are produced with traditional horizontal agriculture. What still weighs in terms of cost are above all personnel and energy "

The vertical farming market Behind smiles, 3D presentations, gadgets," tasty "salad bags and plants on display, there is a truth known to all that hovers among the exhibitors at the Marriott Hotel in Brooklyn: at the moment, vertical farming is a loss-making business. There is talk of companies burning 50 or even over 100 million dollars every year. Stuff to shake your wrists, despite the fact that in this business there are rounds of funding that reward companies with even half a billion dollars. "There have been many expectations and many attempts: we produce 550 varieties of different crops, but I must specify that we generate revenues above all from 30 of these": words released to during the New York appointment of Marc Oshima, co-founder and marketing director of Aerofarms. The most famous company: the first to have opened to the market and which today has 250 employees, 6 farms in the USA, 4 of which in New York and a large research and development facility in Abu Dhabi.

Stand of one of the exhibiting companies at the Indoor AgTech Innovation summit

“In 2004 we were the pioneers and leaders, we opened a market that did not exist. The big difference in what we did was the scientific approach: we thought of plants, biology and the ecosystem first in a holistic and synergistic way. I wonder how many vertical farms have a Chief Scientific Office. To grow, today, only commercial promotion is still not enough: we need to do research ”. And also have fresh capital to invest or otherwise use what you have in the best possible way: it is a different approach, the first more American and the second more European. “Traditional farms are very closed and there are high barriers to entry to the market: we are talking about 20, 30 million euros to open a vertical farm - explains Thomas Ambrosi -. We at Ono have created a system to produce what is needed, when needed, unlike those who have to have large production volumes in order to have returns, and therefore create gigafarms ".

Agriculture is the new frontier in the fight against global warming It is called carbon farming and it plans to "sequester" the carbon in plant biomass. But there is a risk of fraud.Everyone has his own method, but the engine of every new business must be fueled by a high dose of courage, a good amount of capital and a great aspiration to set a market in motion. last aspect, the numbers speak for themselves. In 2020, the vertical farming market was estimated at around 5.5 billion dollars: in 2027 it should be worth over 22.5 billion. And if today it is equally divided between North America and Europe, the growth rates of the vertical farm market reward China, in addition to the USA, followed by Canada, Germany and Japan. “The US remains the engine of this movement - explains the CEO of Ono - The growth of this market in the Gulf countries in the Middle East is interesting, which need not to import food and have very little water. Then the Scandinavian countries, where it is very cold: Russia is also investing a lot. While the Japanese were the first to innovate on a technological level ”. In fact, after the Fukushima disaster it was no longer possible to cultivate on the ground in many areas and therefore the Japanese have accelerated vertical farming technologies. “At a European level, if we also consider the United Kingdom, geographically Great Britain is the one that runs the most. France and Germany follow, Italy is a bit behind but we are recovering. With us you can hardly find founders who give you more than 50 thousand euros or supports that go beyond training. We have chosen to focus on disruptive technology and not on marketing. In the meantime, the market in Italy has opened thanks to the entry of a large player who has shown that this type of business can be financed: I'm talking about Planet Farms. They played with us too ", concludes Ambrosi.

Image of the interior of the Cavenago plant (@Planet Farms)

The company that created the largest farm in Europe in Cavenago has raised "more than 50 million euros in funding, of which the last piece was 40 million collected last year and which will lead us to grow five times in the next year and a half", Daniele explains to Benatoff, co-founder of Planet Farms. Benatoff believes that the current losses of many players are physiological to the development of such a large market: "It is a market that today is indisputable that it exists, that it can work and that it is necessary. It is a product that has written its future on billboards. Are there too many players? The point is not the quantity, but the production dimension and technological evolution: as in many nascent industries, there are many small players that have a limited role in the development of the industry.

It takes a few large players with a technological mentality for this development: this will bring an element of standardization and specialization within the industry. And technologies will bring better quality with better yields and less use of resources ".

The way to success: between final price and tech innovations How to conquer the Eldorado, what the big players in vertical farms must aim for to overcome the break even, take a position and grind margins? The first lever is the final price of the product, today higher than the traditional price on the market: sometimes even five times. But the parameter of comparison, that is how much a product grown on a traditional farm costs today, is destined to change according to what Storey of Plenty explained and with which Benatoff of Planet Farms agrees: "The price of the traditional product can only increase: climate change, water availability and energy will have a significant impact. While the development stage of the vertical farming product is comparable to that of the mobile phone with the briefcase (nineties of the last century, ed). For this reason, in the future we will have different types of products with different types of prices, regardless of the reduction of the technological cost. There will be mass market ones, top-of-the-range ones, other verticals. It is always easy to be strict with companies that innovate: let's think about the criticisms that came to Tesla at the beginning. And today we have Tesla cars that meet the needs of the consumer and have a price even lower than 40 thousand dollars: we have arrived at this evolution ”.

There is therefore the issue of technological progress which will contribute to optimizing the final production costs and therefore the price for the consumer. "We - follows the cofounder of Planet Farms - are more oriented towards a logic of tech enable growth, while others have been more rooted in low cost growth: and trying to make huge productions, to reach a point of development similar to ours, they burned a great deal of capital ”.

From insects to microalgae, the food of the future is already here Snacks and burgers with crickets, pasta with seaweed, cheese made of vegetable proteins: a journey into a new generation of sustainable ingredients Breaking down the final price is not a concern for Aerofarms: according to Oshima “the cost of our product is the same at the time of what is produced on the ground”. However, there is talk of comparisons with organic products, particularly refined for the American market. Even if the crops of vertical farms are even purer than organic ones because they are not subject to soil contamination or external agents. Even if for now this is not a qualitative characteristic that is easily managed to transmit to the consumer, although one day it could become an added value. In any case, the lever on the price of the product that can expand the popularity of "vertical crops" is always technological: “We are called Aerofarms because we produce with the aeroponic method: so we have a more efficient system than the classic hydroponic cultivation. We produce using 95% less water than traditional agriculture, but also 40% less water than hydroponic crops ", concludes Oshima.

The Californian company founded by Nate Storey has a clear objective on this issue: "Seventeen years ago I started asking myself this question: starting from the vertical farming business, how can I maximize production efficiency in space? From this point we began to trace a general road of optimization. The cost of the vertical farm was initially high and will continue to decrease: we aim to produce at a lower price than the average cost of the product of the vertical farms on the market. How? Using less steel, less plastic, glass: I have to pay less than the average per square meter for the realization of a certain output, aim for energy savings and spend less on human labor costs. It is not a possibility, but a prospect: at Plenty we aim to cut costs every 3 years ".

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