Energy costs create headwinds for vertical farms

When salad shortages hit British supermarkets earlier this year, attention turned to one futuristic farming technique, long touted as a way to shore up local supply chains and keep fresh produce on the shelves: vertical farms.

Energy has long been the elephant in the room for the industry — a problem that has grown as energy prices have soared. The farms need electricity to power LED lights, ventilation systems and temperature controls. This is by far the biggest outgoing for vertical farmers, says Cindy van Rijswick, a global strategist for the fruit, vegetable and floriculture sectors at Dutch co-operative bank Rabobank — and is a key reason many still struggle to sell crops at a profit. “Some of them are pricing the products at the same price as competitors but they are making a loss because of it,” she notes.

However, some vertical farms are now run entirely off renewable energy, isolating them, to an extent, from rising energy prices. US vertical farming company Bowery is one of them. It grows lettuces, leafy greens, herbs and berries. “We’re already pricing at or below the cost of field-grown organic products [for leafy greens],” says Bowery’s founder, Irving Fain — though he declines to say what Bowery’s margins look like on these lines.

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