Note: I was recently interviewed by Rebekka Boekhout at VerticalFarmDaily.com regarding ways to grow the indoor farming market and industry. Below are some excerpts of our stimulating discussion. You can read the VFDaily article by clicking here.
Ten Strategic Areas to Grow Indoor Farming
The Center of Excellence for Indoor Agriculture has identified ten strategic areas for accelerating the global transition to indoor farming:
- Recognition of excellence
- Development of metrics
- Realistic investment expectations
- Job creation vs. automation
- Greenhouse vs. vertical farm models
- Crop diversity
- Research into the business aspects of vertical farms
- The development of innovative economic ecosystems
Best in Class Awards
With respect to recognition, the COE has developed its “Best in Class” awards for growers and manufacturers to recognize excellence, encourage knowledge sharing and hold companies accountable.
“We really think that recognition of excellence is important to the industry, especially if it comes from an independent body. A lot of people make claims about being the best at everything and are promising things they can’t deliver. We really think that it’s important to separate those people from those who are really doing a good job in the industry. We also hope that it will motivate companies to continue to improve,” says Dr. Eric Stein, founder and executive director of the COE.
Jobs vs. Automation
There are ambiguities related to automation and job creation in indoor agriculture, which ultimately comes down to the company’s goals. With labor accounting for roughly 25-30% of an indoor farm’s total operating costs, automation can greatly increase profitability by reducing labor costs. However, social enterprises and triple-bottom-line companies may sooner focus on local job creation and use different targets for profitability in the context of their mission.
The cornerstone of the COE and its ten strategic areas is knowledge sharing, which many experts have cited as necessary for the industry’s continued growth.
“I think that one of the biggest needs in the industry is knowledge sharing. Everybody is approaching this from a proprietary perspective, which is typical of emerging industries. But if this industry is going to mature, we need to make sure that we have benchmarks. At the COE, we look at it from an industry level of analysis as opposed to an individual firm level of analysis.”
The Whole System from Seed to Supermarket
While research and development currently focus mostly on production, the COE considers the entire system from the supply chain to the point of sale. The focus on plant production has effectively over-shadowed equally important factors such as the logistics of the supply chain, packaging, distribution, channels and marketing.
“There has been a lot of focus on the growing process, which is very important, but in the end, to get products from a seed supplier to the company growing it to a supermarket, lots of things need to take place. It’s not just about having the best growing system. How you get it to consumers is equally important, if not more so.”
Goals of the Center
The number of indoor farming companies seems to grow almost daily, each claiming to be more innovative than the next. Unfortunately, there is a lack of data pertaining to profitability, yields and sustainability of the indoor farming industry. The Center for Excellence for Indoor Agriculture (COE) was established for this very reason. The COE aims to accelerate the development of the indoor farming market by fostering collaboration and knowledge sharing, conducting third-party research and recognizing excellence in the indoor farming industry.