An A-list of Hollywood celebrities and Wall Street investors are scaling up vertical urban farming in a quest for big returns and climate action.
In 1999, an environmental and health sciences professor at Columbia University challenged his graduate students to figure out how much food they could produce on rooftop gardens in New York City. The results were disappointing, producing only enough for about 1,000 people out of a population of millions. Undeterred, Professor Dickson Despommier continued to work with students to find better ways to grow crops in New York’s urban jungle. He was determined to prove that food could be grown vertically. The idea of a skyscraper farm was born.
Vertical city farming was once little more than a cover for pot growing but it’s now rapidly scaling up and attracting some of the world’s biggest investors who see a chance to build a new industry, accelerate a climate solution and make money.
Two decades after Despommier’s efforts, a new generation of data-driven urban farmers are taking growing food indoors to new heights –– and doing so with technology that turns agriculture outside in. While the U.S. vertical farming market is still highly fragmented with more than 2,000 small indoor farms, it has now drawn more than a billion dollars in capital from some of the world’s largest investors –– and celebrities.
The U.S. vertical farming market is still highly fragmented with more than 2,000 small indoor farms, it has now drawn more than a billion dollars in capital from some of the world’s largest investors.
Leading the pack is New York-based Bowery Farming, which recently raised more than $300 million, attracting A-list celebrities such as actress Natalie Portman, chef José Andrés, singer Justin Timberlake and Phoenix Suns’ point guard Chris Paul. They join some of the world’s leading investors including legendary KKR co-founder Henry Kravis, Google Ventures, Fidelity and Temasek, Singapore’s sovereign wealth fund. This brings the valuation of the privately-held company to $2.3 billion, making it the largest vertical farm company in America.
Produce from Bowery Farming is now sold in more than 850 supermarkets across America including Whole Foods Markets, Walmart and Amazon Fresh. “There is a critical need for new solutions to our current agricultural system –– as well as an enormous economic opportunity,” says Irving Fain, CEO and founder of Bowery Farming. “This is just the beginning.”
With farms located in near urban areas like Kearny, New Jersey and Nottingham, Maryland, Bowery Farming bears little resemblance to early horizontal farms. Its growing techniques benefit from a powerful network of data that would have taken traditional farmers generations to collect. At the heart of each farm is its proprietary BoweryOS operating system that integrates software, hardware and sensors to grow pesticide-free produce ranging from strawberries and tomatoes to herbs and microgreens, in precisely controlled, indoor environments.
If successful, vertical farms will not only transform modern agriculture but will be an important climate change solution.
The big bet on Bowery Farming is to see if a niche area of farming that was once the provenance of hippies and pot growers can now be done at scale. If successful, vertical farms will not only transform modern agriculture but will be an important climate change solution, reducing carbon emissions, eliminating pesticide runoff and using less water to grow more food.
“Agriculture accounts for a quarter of global greenhouse gas emissions today and is predicted to reach 40% of global emissions by 2050,” Fain says. “Our system needs to change.”
And change it will. Vertical farming uses 2-5% less of the water used by traditional farming for the same amount of crops. It also requires 10 to 20% of the nutrients of traditionally-farmed crops, meaning less carbon is produced in their production. Another big vertical farming plus is that there is no need for pesticides. Because of closed-loop watering, there is also no chemical runoff polluting waterways.
A key benefit of vertical farming is location. Crops are grown in large warehouses close to urban centers, reducing the need to transport produce across the country, says Henry Gordon-Smith, CEO and founder of Agritecture, urban agriculture and AgTech advisory firm. This means fewer carbon emissions for getting food to market and it cuts the cost of fossil-fuel-powered farm equipment and tractors, although Henry also admits that vertical farms powered by non-renewable energy sources have a higher carbon footprint due to the energy consumed by lighting and climate control.
Instead, indoor crops are planted on shelves stacked in vertical rows. Using a closed-loop watering system, plants are watered or misted depending on the plant’s needs.
Crops are grown in large warehouses close to urban centers, reducing the need to transport produce across the country.
Indoors, temperatures are constantly maintained and monitored, reducing the need to worry about inclement weather or severe storms destroying crops. Vertical farms do, however, require electricity. In place of the sun, plants grow under fluorescent, LED and high-tech lights, often powered with solar energy. A sharp drop in the cost of lights coupled with a doubling in their efficiency is making indoor farming more viable, Fain says in a recent podcast.
Vertical farming could also be an important alternative to traditional farming that is increasingly at the mercy of drought and extreme weather due to climate change.
“We need to shift our thinking to a drier future,” says Sarah Porter, director of the Kyl Center for water policy at Arizona State University. “Technology is one of the big drivers in looking at ways to manage water and grow food.”
A decade after Despommier’s publishing: “The Vertical Farm: feeding the world in the 21st Century” vertical farming is still no panacea to solving world hunger. And it faces significant technological challenges. One power blackout can become an instant drought, killing off floor after floor of produce. For investors, however, it does offer a tasty alternative to the increasingly over-invested renewable energy sector. It’s also an opportunity to underwrite a key element of future circular economies.
Jim Gold contributed to this story.