Workers in hairnets and gloves place hundreds of thousands of lettuce and other greens plugs into tiny plastic containers stacked to the ceiling inside a greenhouse about an hour outside Dallas. After a few weeks, when the vegetables have reached their maximum size, they will be harvested, packaged, and shipped to local stores within 48 hours.
This is Eden Green Technology, one of the newest indoor farming companies vying for success with green factories designed to produce year-round bounties of fresh produce. The company operates two greenhouses and has begun construction on two more at its Cleburne campus, where the indoor facilities are intended to protect a portion of its food supply from climate change while consuming less water and land.
But only if the concept is viable. And industry participants are placing large wagers even as competitors falter and fail. Plenty Unlimited of California broke ground on a $300 million facility this summer, while Kroger announced that it will expand its selection of vertically farmed produce. AeroFarms of New Jersey and AppHarvest of Kentucky, both of which attracted substantial initial capital, have filed for bankruptcy reorganization. The CEO of a five-year-old Detroit company, Planted Detroit, cited financial difficulties as the reason for the company’s closure this summer, just months after announcing plans to establish a second farm.
Jacob Portillo, a cultivator at Eden Green who oversees the plant health team and monitors irrigation, nutrients, and other crop-related factors, is unfazed by the industry flux.
“The fact that other people are failing and other people are succeeding, that’s going to happen in any industry you go to, but specifically for us, I think that especially as sustainable as we’re trying to be, the sustainable competitors I think are going to start winning,”
The cultivation of plants indoors is an example of what industry professionals sometimes refer to as “controlled environment agriculture.” There are a variety of approaches, one of which is known as vertical farming, which includes stacking vegetables from floor to ceiling, frequently in the presence of artificial lights, and with the plants growing in nutrient-enriched water. Other farmers are attempting to mechanize various aspects of the farming process by utilizing indoor beds of soil in enormous warehouses, indoor greenhouses on an industrial scale, and specialized robots.
Growing inside, according to supporters, requires less water and land and allows food to be grown closer to consumers, saving money on transportation. It is also a method of protecting crops from the more severe weather caused by climate change. The companies commonly advertise that their products are pesticide-free, yet they are not typically sold as organic.
Skeptics, on the other hand, doubt the long-term viability of businesses that may necessitate the use of energy-intensive artificial lighting. They further claim that paying for that light can make profitability impossible.
Tom Kimmerer, a plant physiologist who taught at the University of Kentucky, has studied both interior and outdoor plant growth in his research on indoor farming. He stated that his initial reaction to vertical farm startup companies, particularly those heavily reliant on artificial light, was, “Man, this is a stupid idea,” primarily due to high energy costs.
This has been acknowledged by the industry. Some businesses are attempting to reduce their carbon footprints by utilizing solar energy, which they claim promotes sustainability. Even those that rely the most on artificial light that does not come from renewable sources claim they can eventually be profitable by generating a large quantity of produce year-round.
However, Kimmerer believes that there are more effective methods to provide food locally and extend the growing season: outdoors. He referenced the organic farmstand-focused Elmwood Stock Farm outside Lexington, Kentucky, which can cultivate tomatoes and greens year-round using tools such as high tunnels, also known as hoop houses — greenhouse-like arches that shelter crops while leaving them partially exposed to the elements.
He believes that investment in new indoor farming models would be better spent on practical solutions for outside farmers, such as weed-zapping robots, or even climate solutions, such as subsidizing farmers to embrace regenerative practices.
Moving farming indoors can solve some insect issues while creating new ones. Without their natural outside predators, tinier animals like aphids, thrips, and spider mites can become very difficult to control if not treated aggressively, according to Hannah Burrack, an ecologist at Michigan State University who specializes in pest management.
“If you’re creating the perfect environment for plants, in many cases, you’re also creating a perfect growing environment for their pests,”
This is why indoor farming companies stress cleanliness. For example, Eden Green’s website talks about “laboratory conditions” and says that workers closely watch their greenhouses to catch any pests right away. They also say that vertical farms need less pesticides than outdoor farms, which is good for the earth.
Evan Lucas, an associate professor of building management at Northern Michigan University who teaches students how to build the right infrastructure for indoor farms, said he isn’t worried about the current shakeout. He said that some companies may be having trouble growing because they started out in places that aren’t exactly made for indoor farming.
Several of the businesses claim to be on the correct course. Eddy Badrina, CEO of Eden Green, states that the company has figured out a means to rely primarily on natural light for its plants. Plenty’s chief executive officer, Arama Kukutai, said the company’s illumination system is profitable. And Soli Organic’s chief executive officer, Matt Ryan, stated that growing in soil indoors produces a superior product than growing in water.
Last year, Plenty received a significant vote of confidence when Walmart participated in a $400 million investment round aimed at introducing Plenty’s produce into its stores.
Curt Covington, senior director of institutional business at AgAmerica Lending, a private investment manager and lender specializing in agricultural land, is unconvinced that indoor farming operations can be successful, except in cases where large retailers and greenhouses collaborate, such as Walmart and Plenty, or where grants for urban and vertical farm operations that benefit communities could be provided as a form of socially conscious venture capital.
“It’s just hard, given the capital intensity of these types of businesses, to be very profitable”
