Plant factories are failing, with multiple companies closing or going bankrupt in recent months. This includes the largest vertical farm on the planet, in Compton, Los Angeles.
Owned by San Francisco-based startup Plenty, the farm opened in 2023 to grow salads in partnership with Walmart. It was mothballed at the end of 2024, with the company citing the rising cost of energy in California as a major problem.
Despite raising over US$1 billion (£802 million) from investors, the company’s value has reportedly plummeted from US$1.9 billion to below US$15 million. It now aims to focus solely on strawberry production in Virginia.
New York-based Bowery Farming also halted all operations in late 2024, having previously being valued at US$2.3 billion. Fellow American vertical farmers AeroFarms, Kalera and AppHarvest have similarly filed for bankruptcy in the past two years, as has the UK’s Growing Underground, among various others.
Clearly these are major setbacks. Year-round illuminated greenhouses and stacked, controlled-environment warehouses for producing food have been hailed as a sustainable alternative to traditional farming, promising fresh food close to populations.
This reduces the need for transportation, which together with other issues in traditional farming such as soil degradation and forest clearing see it contributing around 20% of the greenhouse gases that lead to planetary warming and climate change.
Multiple new indoor-farming companies sprang into life in the past decade, driven by significant venture capital. They harnessed the latest in LED lighting and hydroponic and aeroponic growing systems, using land and water ten to 100 times more efficiently than in a field and with far fewer pesticides.
Initially developed to grow leafy greens and microgreens, these farms have more recently turned to higher value produce including herbs, strawberries, tomatoes and grapes.
Among the reasons for the business failures are rising energy costs; the fact that traditional farming is cheaper, making it hard to compete on price; and the fact that rising interest rates have made financing more expensive.
Together with other challenges such as high energy consumption and finding enough skilled labour, many opponents are writing this sector off as a fad that is unlikely to ever make a big impact on food security.
This ignores success stories, such as JFC and Grow-up Farms, which are regular suppliers to the UK supermarkets. But more broadly, there are various reasons why the critics are likely to be wrong:
1. We’re still early
Vertical farming has been proving itself by “learning by doing” for the past decade. Kicked off by Nasa space scientists seeking to grow food in hostile environments with zero gravity and heavy radiation, this field is still highly experimental.
New technologies like this one often conform to the Gartner hype cycle, where big initial expectations are rarely met, leading to a trough of disillusionment. Following this, the benefits start to crystallise as new players enter the market and mainstream adoption begins.
Vertical farming is only a very small proportion of total farming, but it looks very likely to flourish given the need to reduce greenhouse-gas emissions, and the threats to food security from climate change and population growth. In addition, the costs are likely to be reduced by the arrival of much more renewable energy at cheaper prices in years to come.
