In recent years, the vertical farming industry has faced significant struggles, leading to the shutdown of several brands, including the well-known Bowery. The industry's over-reliance on premium products like salads and herbs, which were marketed to high-end consumers, proved unsustainable. The soaring energy costs, worsened by geopolitical events like the war in Ukraine, made the model financially unviable for many farms. As a result, energy costs increased and consumer demand shifted toward more affordable options, forcing widespread closures. However, some companies survived by adapting and diversifying their offerings.
Survival through innovation: Greeneration's success
One company that successfully navigated these challenges is Greeneration, based in Dubai. Despite the industry's downturn, it recently secured $5 million in investment. Founder Roman Ulyanov credits their success to focusing on rare plants and niche products, such as edible flowers, which were previously imported. "We currently have about 20 types of edible flowers on the shelves, along with 15 to 19 varieties of other specialties," Roman says. By offering unique products like Oxalis, Shiso, and Lemon Verbena, Greeneration filled a gap in the UAE market and has thrived in the process.
Diversification a key to long-term survival
Gonçalo Neves, an agrifood-tech consultant, stresses the importance of diversifying and understanding market demand. He explains that successful vertical farms should cater to a broad range of customers and products, including plant-based pharmaceuticals, food, flowers, and even tree seedlings. Neves also emphasizes the growing potential of medicinal plants, such as Artemisia, used in malaria treatment. "There are literally thousands of plant-derived compounds with significant pharmaceutical applications," he says.
The unique advantage of vertical farming
Vertical farming is no longer seen as a groundbreaking technology but rather a new type of greenhouse. However, what sets it apart is its fully controlled environment, which allows for precise climate customization. This capability makes vertical farming especially well-suited for cultivating high-value plants, particularly for the pharmaceutical sector. Plants used to produce bioactive compounds—whether for natural remedies or medicines—are in high demand, and vertical farming offers a controlled environment for producing these plants.
Opportunities in the pharmaceutical market
Dr. Anastasia Kurina, a senior researcher at the Vavilov Institute of Plant Genetic Resources, explains that market analysis is crucial for identifying gaps in the pharmaceutical market. Vertical farms can be ideal for growing plants that produce compounds in short supply, especially when chemically synthesized alternatives are too expensive. She points out that plants used in traditional medicine often contain bioactive compounds with significant medicinal potential. "Each year, new compounds are discovered, and previously known compounds are found to have new applications," Anastasia adds.
While cultivating medicinal plants comes with regulatory challenges, the potential for high-profit margins in the pharmaceutical industry makes it a compelling area for vertical farming. Additionally, the process of discovering new plant extracts can occupy the entire resources of a vertical farm, contributing to scientific advancements and commercial viability.
High-value food industry compounds
Beyond pharmaceuticals, vertical farming holds significant promise for the food industry. Neves highlights the potential for growing high-value compounds like dietary supplements, natural preservatives, and active taste enhancers. For example, basil can be used to enhance the flavor of processed meats. However, Neves cautions that success depends on demand within the food processing industry. "This demand requires careful research and real-world testing to validate market readiness," he explains.
Cellular foods and Moringa: a future for vertical farming
James Brady, founder of an AgTech consulting firm, sees great potential in cellular foods. He envisions a future where products like wine, pork, and milk can be created without their traditional sources, using plants like Moringa. Brady is particularly interested in cultivating Moringa in controlled environments for its versatile byproducts. "Moringa's leaves, which are 28-35% protein, can be used in a variety of applications, including dietary supplements," he says. Moringa has impressive growth rates and offers multiple health benefits, making it an ideal candidate for vertical farming.
Tree seedlings and sustainability
Another promising direction for vertical farming is the production of tree seedlings. Companies like iFarm and IGS are already developing technologies to produce tree seedlings on a large scale. This could help address issues like desertification or provide sustainable food sources. Tree seedlings also offer opportunities for vertical farming to contribute to environmental sustainability.
Exploring synthetic biology
Looking ahead, vertical farming could venture into technologies such as synthetic biology, where plants are engineered to produce materials like spider silk or biodegradable plastics. While these ideas remain speculative, they showcase the immense potential for innovation in the vertical farming industry. By diversifying and exploring uncharted territory, vertical farms could play a key role in creating new materials and products, further expanding their scope.
Vertical farming's future is filled with opportunity, particularly for those willing to diversify and take risks. Whether through expanding into pharmaceuticals, producing high-value food compounds, or exploring synthetic biology, the industry can thrive by adapting to market needs and pioneering new solutions. As the industry moves beyond traditional offerings, those who step up and explore innovative possibilities will likely lead the way in shaping a more sustainable and profitable future.
Authored by Konstantin Buzin