"Vertical farming companies must prioritize long-term planning, efficient unit economics and operational consistency to succeed as the industry faces challenges in capital allocation and a likely wave of mergers and acquisitions amid a market reset," explained Eddy Badrina, CEO, of Eden Green Technology.
Since the company's portfolio expansion from leafy greens to fresh herbs last spring, it has focused on providing consistent and organic produce year-round. By leveraging its partnership with distributor Robinson Fresh, Eden Green delivers herb varieties that are traditionally imported from various countries around the world, significantly cutting down carbon emissions and transportation costs.
Their strategy capitalizes on its hybrid greenhouse and vertical farm capabilities in partnership with its distributor, which enables the company to maintain its costs. Currently, Eden Green produces 70% herbs and 30% leafy greens in its facilities – a strategic mix that comes from its ability to foresee and adjust to industry trends, Badrina said. "Unlike other industries where businesses can pivot quickly, the produce sector requires careful planning due to slow-moving sales cycles and long-term contracts."
"Success in the vertical farming sector centers on selecting the right varietals, optimizing environmental controls, and securing reliable sales channels," he continued. "Many companies in the vertical farming space spread themselves too thin by growing a wide range of plants without excelling at any one type, ultimately leading to lack of profitability," Badrina said.
For example, vertical farm Oishii's specialization in premium strawberries reflects the company's focus on advancing farming methods. The company's partnership with Japanese robotics company Yaskawa Electrics Corporation pushes the boundary to produce year-round fruiting plants, as Oishii also produces its Rubī tomatoes. "The market for year-round strawberries is pretty immense, and when you try to localize that and not having it shipped from overseas, that becomes even more of a tantalizing market," Badrina said.
Other companies in the vertical farming sector have faced significant challenges, including Plenty, which saw its valuation plummet from $1.9 billion to just $15 million in a few years, while both AeroFarms and AppHarvest filed for bankruptcy in 2023 and Bowery Farming ceased operations in 2024.
Source: foodnavigator-usa.com