Necessity Is Driving Agricultural Innovation Indoors

According to the United Nations, the earth will house an estimated 9.7 billion people by 2050.

Consequently, more food will need to be produced over the next four decades than has been produced over the last 10,000 years. And with more than 99.7 percent of global food coming from land, and most of the arable land already accounted for, increasing yields per surface area is essential.

One crop production solution creating opportunities for investors, entrepreneurs and multinational companies is vertical farming, aka plant factories. Although nomenclature varies, the concept involves growing crops on urban rooftops or in high rises or other controlled, indoor environments, which build vertically in stacks as opposed to spreading horizontally.

Vertical farming uses fewer water and land resources while limiting pollution and the impacts of oft-volatile Mother Nature. It also moves production closer to urban consumers, which reduces transport distances, minimizing waste and extending shelf lives.

These soil-less systems employ hydroponics (where roots are marinated in nutrient solutions) or aeroponics (roots are sprayed with nutrients). LED lights and metal reflectors magnify illumination and advanced HVAC systems maximize production.

Recently, dozens of vertical farming companies displayed their technologies at the four-day Taipei International Plant Factory and Greenhouse Horticulture Product Exhibition. A range of enterprises participated, from startups to global conglomerates: plant factory design and engineering companies, irrigation and artificial mist suppliers, LED manufacturers and sensor technology developers.

Lu Wen-Yuan, a Taiwanese representative for Japanese-based Toyobo Engineering, talked about the ability to keep food safe in plant factories and how year-round growing seasons increase per land area output manifold. He said, “because it is a closed system, daily production is stable and not reduced by the weather — such as typhoons, rain and wind.” Lu also highlighted the reduced costs and environmental impact from converting unused buildings into vertical farms (as opposed to constructing new structures).

Recognizing indoor farming’s potential, Taiwan electronics manufacturer, Advanced Connectek, started a plant engineering unit, ACON Pure. Within Taiwan, ACON Pure markets factory-grown crops. Globally, the company assists third-parties to construct controlled-system farms by designing facilities, transferring technology and providing training and management. Senior Director Sandy Wu extolled the benefits of vertical farming — no insecticides or herbicides, a 90 percent reduction in water usage relative to traditional farming and an even greater cutback in mineral nutrients.

Similarly, Priva, which has approximately 500 employees operating in more than 100 countries, designs and constructs sustainable vertical farms that enable agricultural producers to control interior temperatures, irrigation, humidity, CO2 concentration and light. Priva’s Beijing-based General Manager, Julia Charnaya, said, “With droughts and the climate changing, production is switching from growing in open fields to closed operations in greenhouses or plant factories.”

In Holland, Priva partnered with technology company Philips on urban farming research facilities. Philips’s 75-person horticulture LED division customizes lighting solutions for closed agricultural systems. Gus van der Feltz, Global Director of City Farming at Philips, said, “There are opportunities all around the world, particularly where people care about their food and have capital to invest…like with any new technology, we are looking at early adopters.”

Given favorable economics, most vertical farming plants are lettuce varieties (e.g., coral, leaf, curly, wave, antler, sweet romaine), herbs (e.g., coriander, mint, basil), and cruciferous vegetables (e.g., broccoli, cabbage, bok choy, sprouts). Some plant factories raise strawberries, tomatoes, mushrooms and peppers. And as the industry develops, cropping possibilities widen.

Functional and medicinal crops are also grown in factories. According to Wu, many Japanese hospitals have on-site plant factories producing specific crops for patients. For example, hospitals are experimenting with low-potassium spinach for patients with kidney issues. Others are experimenting with ways to lower food nitrate levels.

Wu said, “In the future, we can distinguish products by individual medical needs. By controlling the quality of the nutrient solution, we control the quality of plant nutrients.” Van der Feltz said, “We can stimulate development of desirable compounds in fruit and create high-quality produce in vertical farms.”

Startups are also capitalizing on industry opportunities. Taipei-based LED lighting company, Asensetek, was founded in 2013 and has 30 employees today. Although indoor farming only represents a fraction of their revenue, marketing representative Vincent Tsai said, “Business opportunities are expanding.” To attract agricultural clients, Asensetek developed a spectrometer that links with smart devices and enables growers to remotely monitor and analyze light wavelengths and intensities.

Although many product suppliers target large-scale vertical farms, others are retail-focused. After three years of research and development, the five-person team at Taiwan-based Fresh Intake is marketing its mini-garden cabinet to households, cafeterias and restaurants. The 3′ x 6′ cabinet is an enclosed system that enables year-round growing of crops, which can be immediately eaten after harvesting.

One criticism of indoor farming is the increased electricity usage, but supporters view the advantages as outweighing the negative externalities. Addressing the issue, van der Feltz said, “It’s a fair point on the light when not using the sun, but we think we can make the value chain more efficient and shorter.” To lessen the environmental impact from lighting, heating and cooling, many vertical farms use renewable energy.

Fresh Intake’s engineer, Chia-Yu Yen, also acknowledged the trade-off, and said, “Hydroponics uses few nutrients, but if we plant crops in the earth it uses a lot of nutrients. This is a waste of the earth’s ground. Hydroponics also uses a lot less water.” He continued, “The planet has more and more people and hydroponic output is extremely high. I believe hydroponics will become more widespread as people learn about its benefits.”

Yen also highlighted the value in growing crops in the markets in which they are consumed. He said, “Lettuce in Taiwan is imported. If we use hydroponics we don’t have to import it and it is less expensive and the quality is better.”

Beyond Taiwan and the Netherlands, research and commercial vertical farms exist in the U.S., Canada, the U.K., Sweden, the Middle East, Japan, South Korea, China and Singapore. In the future, vertical farming may be further explored in land-scarce (e.g., China, India, Korea), water-scarce (e.g., California, the Middle East), non-temperate (e.g., Alaska, Scandinavia) and other markets where producers are trying to limit environmental influences.

“Vertical farming has lots of potential and is a new and emerging market,” Priva’s Charnaya said. “And with land becoming more scarce and more expensive, it is probably the future.”