· Farming,Agrarian Economy,Agriculture,Indoor Farming,Food

Vertical Farming

Florida-based vertical farming startup, Kalera, recently announced plans to open what it describes as the largest vertical farm in Houston, Texas, by spring of 2021. By positioning its farms in direct proximity to the major metropolitan areas that they serve, Kalera will be able to better meet the needs of national retailers and food service distributors for fresh produce.

Farm.One, a similar business model that grows and delivers more than 500 different varieties of rare produce for top chefs in New York City straight out of their indoor vertical farms in Manhattan, has boasted massive success on the east coast. Their produce includes pesticide-free rare herbs, edible flowers, and microgreens, with a total of 14 Michelin Star restaurants using their products.

Vertical farming businesses such as Kalera and Farm.One solve quite a niche customer problem – the lack of a quick and easily accessible supplier of fresh produce in metropolitan centers. Traditionally, NYC restaurants would source their ingredients and rare edible plants via boat or plane from Upstate New York, California, Mexico, or other remote locations.

This poses challenges such as an extensive shipment time, resulting in a drop in crop quality and increases in transportation costs. The proximity of Farm.One and the firm’s use of an advanced hydroponic system, as well as the Fluence RAZR lighting solution, ensures a fresher and higher-quality product for its clients. Given the prominence of NYC’s fine-dining businesses (holding the most Michelin Stars in the country), this is a problem prioritized by buyers in this space – and vertical farming presents a futuristic solution.

Indoor vertical farming also eliminates challenges caused by the seasonality of some ingredients. The technology that makes vertical farming possible is a combination of sensing, air management, and environmental manipulation, as well as cutting-edge lighting systems. Under controlled conditions, fresh produce can be grown year round.

The optimal conditions for a crop vary throughout its life cycle, and meeting these conditions is critical for maximizing yield. Automated feedback systems that are enabled by intelligent sensing allow vertical farming units to adjust lighting, temperature, and humidity, while monitoring plant health in order to maximize yield and efficiency.

However, to adjust these specific conditions, the vertical farming system must collect data on the crop’s progress in the growth cycle. This is accomplished using optics and other sensors so that the system can be controlled in real time, responding to the current health conditions of the crop. Detection methods normally include optical techniques such as multispectral imaging and pattern detection that is powered by machine learning.

Plants require a wide range of temperature conditions, and the air conditioning and lighting systems in vertical farms must accurately match these requirements. Air temperature outside the optimal range can damage yield by causing plants to grow at a slower rate, prompting vertical farms to utilize additional ducting, distributed air management, and cooling systems to ensure uniform control of ambient conditions.

Vertical farms may also use irrigation liquid or water vapor for humidity reduction and promotion, respectively. Delicate control of the temperature, humidity, and CO2 levels boosts the overall performance and yield of vertical farms.

One of the most valuable technologies a vertical farm wields is its lighting system, which is paramount for triggering the growth phases for crops using an adjustable spectrum. As the most popular choice for vertical farms, Photosynthetically Active Radiation light sources are more efficient than LED and fluorescent lighting systems. However, lighting is the most expensive operating cost, consuming ~70% of the energy in a vertical farm.

Kalera has recently taken massive strides in the vertical farming industry. The technology-driven vertical farming company has raised over $180 million in capital capital to fuel it's expansion to new markets in Atlanta, Houston, and Denver after opening its facility in Orlando. Using a closed-loop irrigation system, Kalera is capable of growing plants while consuming 95% less water compared to traditional field farms.

Kalera’s recent growth comes in the midst of the worldwide pandemic – because the demand for produce is inelastic, vertical farming in a controlled environment can ensure stable crops for metropolitan locals. However, while the usage of IoT and AI technology in agriculture has gained the attention of VCs and investors, the agricultural tech market may still only be secondary to traditional farms.

Dr. Simon Goddek of Wageningen University and Research stated that due to the nature of vertical farms and their expensive operating costs (artificial light and high land costs), this complicates achieving a solid return on investments. He claims that as long as there is plenty of open space in peri-urban areas, traditional farms will remain the gold standard of agriculture.

Written by Glen Oh & Edited by Jack Argiro, Kevin Ma, Alexander Fleiss & Gihyen Eom

Sources: Kalera, Cambridge Consultants, Pitchbook

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