Vertical Indoor Farming Exploits Global Macro Themes
In the past, we have written about how increasing populations, greater urbanization and a growth in the consumption class are placing tremendous strains on food production. We believe new technologies and sustainable processes will be required to transform traditional farming. The goal and end result is to boost food production. Winners and losers are yet to be determined as we race to transform and disrupt food production. One of those solutions is vertical indoor farming similar to this site in Singapore.
Vertical farming, we believe, will be an ideal sustainable solution throughout the world’s densely urban centers. In fact, AeroFarms in December 2015 raised $20 million in Series B venture round. The capital will be used to build, own and operate indoor vertical farm in Newark New Jersey that is 75 times more productive than traditional farming and uses 95% less water. The company will grow a wide variety of leafy greens such as arugula and kale. The goal is to grow nutritious food in a way that is respectful to the planet and the communities in which food is grown as well as in a biosecure facility.
Vertical indoor farming is spreading across the country. Farmed Here, for example, is located just south of Chicago in Bedford Park, Illinois. It too is transforming the way organic produce is grown and distributed. Specifically, sustainable vertical indoor farming is meant to fill the consumer preference for locally sourced organic food.
Fertile Ground for Investment
There will be many winners and losers in this race to feed the world. And there will also be many investment opportunities just like mid 1980s when most people knew nothing about networking let alone a switch, router or modem. Or in the early 1990s when few knew much about digital wireless technologies and the potential for smartphones. Today, companies such as Apple, Cisco, Qualcomm and Verizon are household names and investments.
My prediction is one day Institutional Investor Magazine may even have a “Food” category in its annual “All Star Analyst” survey separate from either Agriculture, Restaurants and Consumer Products. But first, someone has to identify the new players…