It’s said that people who live in glass houses shouldn’t throw stones, especially if those glass walls are covered in leafy greens. “The CEA [controlled environment agriculture] industry is probably 50 years old,” said Sonia Lo, board director of urban-gro, a CEA architecture, engineering, construction, and consulting firm out of Lafayette, Colorado. “Dutch glass houses are a well-known, well-proven factor; the vertical farms attracting venture attention are a 10-year phenomenon.”
Perhaps that’s why the space is so competitive. Earlier this summer, CEA industry catalyst AeroFarms filed for bankruptcy. AeroFarms was quick to the 21st-century vertical farming industry, yet despite ongoing growth and retail partnerships for its leafy greens and microgreens, AeroFarms cited “significant industry and capital market headwinds” when it announced it filed for Chapter 11 bankruptcy in Delaware in early June. Chief financial officer Guy Blanchard will take over as acting president, replacing CEO and co-founder David Rosenberg, who will serve as a special advisor to the board.
Lo, a CEA industry veteran, was able to offer some perspective on just what’s going on in the CEA space. “Compared to distributed solar, this is new infrastructure, and we’re still trying to figure out the working models,” she offered. “Venture is the appropriate but very expensive capital to do so; eventually, we’ll reach a standard, financeable infrastructure.
“We’re in that transition phase, though, and you expect to see these boom/busts. What’s peculiar is that it’s not software – it’s physical buildings, growing a physical plant and the growing of food, so some of the push-me/pull-you out there is that tech investors get excited about the potential of new technology, but the revenues coming in are literally farm revenues – they’re selling produce.”
Read more at foodinstitute.com