A new opportunity for investors

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Vertical farming: A new opportunity for investors
 

Vertical farming: A new opportunity for investors

One of the most promising fields in agriculture these days entails growing crops indoors, in existing warehouses or multi-story buildings.

An increasing number of sophisticated early-stage investors believe that vertical farming could transform the agricultural world. Imagine a 365-day season without droughts, freezes or infestations. Or growing multiples more heads of lettuce per growing space, because you can grow in racks that extend to the ceiling of a warehouse or container.

We believe this is an area that has potentially massive long-term potential for growth. Global demographic and environmental change is reshaping our world, and we, as inhabitants of this world, must in turn change as well. 850 million people, or one in nine people on Earth, today go to bed hungry. Without some sort of disruptive paradigm shift in today's unsustainable agriculture model, the 850 million will surely increase. These global changes are, and will continue to impact us all. While the sequencing and severity may vary by region or economic standing (first world versus third world), the challenge, and opportunity exists everywhere. For investors, this might be the next big thing.

Expertise in vertical farming has emerged from a variety of unusual places, including Dutch bioengineers, NASA, staffers in Antarctica research stations, indoor marijuana growers, and a professor at Columbia University named Dickson Despommier, who has been an active proponent.

"Imagine a 365-day season without droughts, freezes or infestations. lettuce, vertical farming, aeroponic, herbs"

 

Vertical farming technology capitalises on years of research and development in photosynthesis and "grow medium" composition. In fact, plants grown in an indoor, vertical space typically are not grown in traditional soil, but rather some other growing substance. Add the falling cost of LED lighting, plus changing consumer tastes toward healthier and safer foods, and you have a trend in the making.

Advantages: There's a controlled climate. Crops can be grown on significantly less land closer to market, which reduces transportation costs. Less water is needed — and it can be recycled. There is a diminished — or no — need for soil and fertilizer. And there are more, sometimes many more, potential harvests per year as well as higher yields.

Disadvantages include the cost of construction, and, depending upon the system, higher electricity bills. That said, newer LED systems are bringing the expense of To be sure, vertical farming has an infinitesimally small share of the existing agriculture market in the UK, and many start-ups in this niche in the agriculture space will not survive, either through a faulty business model, bad management or a lack of technology. In fact, as is typical in any emerging industry, several have struggled or failed over the past decade. Keep in mind that the average tomato today travels 1,800 miles on a tractor-trailer from farm to table. Someday, that tomato's trip may be a few blocks by taxi — or maybe even Uber. What's that worth?