The coronavirus crisis has provided vertical farming operations with an opportunity to demonstrate their resilience in the face of external shocks
The great panic buying of 2020 revealed the time it takes for food to go from farm to shelves. The curtain was pulled back on something the shopper rarely thinks about - supply chain logistics. As grocery store shelves emptied, the problem wasn't necessarily lack of food but a drastic shift in demand that caused traditional distribution engines to sputter.
For example, lettuce takes between 30 and 45 days to grow in a field farm. According to a 2001 study by the Leopold Center for Sustainable Agriculture, traditionally grown lettuce travels about 2,000 miles to get to Chicago grocery stores. So by the time prepackaged greens are bought by consumers, that produce can be almost two weeks old. These long lead times caused those empty shelves in March.
Vertical farms have struggled to become a major force in the grocery market. Their products are usually limited to leafy greens, and the high labor costs have made turning a profit challenging for many. But the pandemic clarified their role within a more sustainable food system. Vertical farms, with their hyperlocality and ability to quickly grow new crops, can step in to fill retail shelves when traditional farms falter.
"We are a really critical part of this food supply chain, and we can fill a gap when there is a crisis," said Shireen Santosham, head of strategic initiatives at Plenty, which sells vegetables at 20 locations around the San Francisco Bay area.
Location always has been a core part of the vertical farm appeal and business model. During the pandemic, many have taken advantage of the fact that their growing operations often use abandoned warehouses in urban areas and therefore are much closer to retail stores.
Fifth Season Connection, a vertical farm that leverages robotic technology, operates a 600,000-square-foot vertical farm in the food deserts of Pittsburgh. Its chief category officer, Grant Vandenbussche, called me from inside his delivery truck. He was delivering that day's produce to grocery stores a mere 24 hours after the greens were picked. His company has seen a 50 percent increase in orders over the past few months, even as its restaurant market has dwindled.
"We have fantastic retail partners that we have really leaned on," he said. "Our partnerships have allowed us to get more onto the shelves and expand our offerings."
The consumer also benefits from the quick turnaround time, especially during the pandemic. According to Vandenbussche, vertical farm greens typically last longer after purchase because they haven't been out of the dirt for as long as traditional produce. So when every trip to the grocery store feels like a risk, shoppers are looking for products that will last longer than a few days.
According to AeroFarms, its advantage has been the ability to produce baby greens in a third of the time of traditional farms, typically 12 days. AeroFarms operates four vertical farms in New Jersey harvesting almost 2 million pounds of produce a year using aeroponic mist instead of traditional irrigation, resulting in 95 percent less water usage than a traditional farm. According to Marc Oshima, co-founder and marketing director of AeroFarms, most field farms don't have the nimbleness to respond to a quick change in market demand.
"Because we are inside, we are able to grow all year round," he said. "We can pivot as needed and adjust to the marketplace. We plant, seed and harvest for our customers based on their orders. That allows us to be very customer- and market-driven in how we grow."
Plenty has seen a threefold increase in demand from its retailers since the start of March. The pandemic opened up opportunities with new retail partners for Plenty because the stores were experiencing a disruption in supply chain and looking for alternative means of keeping shelves full, according to executives.
"[The increase in demand] came from both our existing stores as well as from additional stores that called us up and said, ‘Hey, we are having trouble keeping our shelves stocked, could you add some volume with us?'" said Roger Kirkpatrick, director of business development at Plenty.
Plenty was able to meet the demand as it already was gearing up its volume for placement in new stores but coronavirus accelerated the pace, Kirkpatrick said.
Vertical farms are hoping to capitalize on this moment. Shelves empty of a consumer's habitual brands help force consumers over the initial barrier of trying a new product such as those sold by Plenty. Once people do try Plenty's produce, according to Kirkpatrick, they tend to stick with the brand. So even as panic buying has calmed down, Plenty has seen its demand stay level, he said.
And even though the Centers for Disease Control and World Health Organisation guidelines agree COVID-19 is unlikely to be passed through food contamination, vertical farms are using consumers' increased awareness of the food supply chain to push their product as a safer and better alternative.
"[Consumers] will continue to gravitate towards local clean options because, now more than ever, they're thinking about where is my food coming from, who is touching it and how has it been processed," Vandenbussche said.
This article first appeared at GreenBiz.com
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