Vertical farming having a growth spurt

Vertical farming is as divisive as it is ground breaking. While supporters promote its ability to produce large quantities of food from a small area of land, its critics condemn its high energy usage.

Added to this, the sector faces significant challenges, which have suppressed growth in recent years.

Vertical farming challengesThe biggest challenge faced by the vertical farming industry is, without doubt, running costs. And it’s this that has led many, including Agricool and Glowfarms, to shutter.

“One of the most commonly spoken about challenges the vertical farming industry has faced over recent years has been highly volatile energy costs,” says Andrew Lloyd, CEO of global vertical farming technology company, Intelligent Growth Solutions. “This has been most acute in Europe, where kWh prices remain double what they were before the war in Ukraine.”

What’s more, this issue looks set to continue.

“Electricity price volatility is projected to remain a challenge for several years to come,” says Lloyd.

This had led the industry to struggle in its attempts to grow, as financial backing has decreased.

“Price volatility has had a marked impact on the willingness of the investment market to back vertical farming projects, with appetites to perceived risk being reduced,” says Lloyd.

The industry has also seen projects falter or stall due to their inability to scale.

“Small-scale operations, even those growing premium or speciality crops, have struggled to deliver returns or meet commercial demand, leaving businesses struggling in a competitive market,” explains Lloyd.

However, despite these challenges the vertical farming industry is starting to make growth a reality. In fact, it’s already achieved a global market value of $5.6bn and is projected to grow at a CAGR of 19.7% over the next four years (MarketsandMarkets).

“The key driver pushing the growth of the vertical farming market is the factors in the food production system such as high population density, scarce and declining arable land, climate change, and environmental degradation,” says a spokesperson for MarketsandMarkets.

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Vertical farming is growing Despite closures in recent years, success has also occurred. However, those positive stories have come from vertical farms, which have mitigated the biggest challenges through innovation.

“Those that have considered sites holistically, incorporating local or even on-site renewable energy generation, to mitigate the risk of price fluctuations, have proven successful‚” says Intelligent Growth Solutions’ Lloyd. “Many of these projects also have principles of circularity firmly embedded at their core.”

And it’s this circular approach to site design that’s helping to restore investor confidence in the sector.

“They’re demonstrating resilience and an ability to deliver returns,” says Lloyd.

Another major marker for successful vertical farms, is achieving production at scale.

“Scale is a very important factor,” says Lloyd. “For vertical farming to be able to step beyond the novel technology category and truly deliver a step-change to the way we tackle global food security, it needs to be done at scale.”

Also read → Top food tech trends for 2025 revealedScalability is fundamental to the future success of vertical farming (Getty Images)What more can vertical farming do to overcome challenges?Artificial Intelligence (AI) is proving to be an important tool for the food and beverage industry, and the possibilities for vertical farming are considerable.

“From streamlining practices and efficiencies through to providing more resilient supply chains, diversified revenue streams, and increased productivity, AI could deliver any number of benefits to the agritech sector,” says Lloyd.

Furthermore, industry leaders are keen for governments to support the sector as it represents an important part of the food system.

“More needs to be done to enable vertical farming technology developers to get solutions into the hands of the growers to enable real change,” says Lloyd. “Whether this is through green energy tariffs similar to the red diesel initiative, or through subsidies or tax relief for growers looking to diversify systems.”

Education is also required to help consumers better understand the benefits of vertical farming.

“Wider adoption of vertical farming into the global agricultural system is reliant on consumers driving demand,” says Lloyd. “Public education is required at sector level to help demonstrate the impact that integrating technology into existing systems can have, both in terms of food security and sustainability.”

Also read → Vertical farming breakthrough could save industry from failure The future looks bright for vertical farmingThe future of vertical farming is brightDespite its challenges, the vertical farming sector remains confident in its future success.

“I truly believe that there is a bright future for vertical farming,” says Lloyd. “It’s no secret the sector has gone through a testing time, and many of the challenges – perhaps most notably volatile electricity pricing – show little sign of abating. However, important lessons have been learned by a sector that really is still very young, and we are coming out the other side stronger and more resilient.”

What is vertical farming?The modern concept of vertical farming was established by Professor Dickson Despommier, of Columbia University, in 1999.

Vertical farming is the practice of growing crops vertically, rather than horizontally. This unique approach to agriculture sees crops stacked in vertical layers, within a controlled environment. Amongst the many benefits, it allows for the optimisation of growth as plants are provided with the ideal amount of water, air, light, soil nutrients and warmth. As well as maximising the chance of crop success, this method offers further benefits, including and utilisation of soilless farming techniques, such as hydroponics, aquaponics and aeroponics.