Only way is up for vertical farming as Covid-19 exposes supply chain flaws

The number of urban farms in densely populated cities is also on the up. Just outside Paris, a rooftop farm the size of two football pitches is expected to supply residents with a tonne of fruit and vegetables a day. 

The proponents of vertical farming argue their businesses are a boon for the environment. They typically use significantly less water, no pesticides and fungicides, and say there is little food waste compared with traditional agriculture.

Technology allows them to control their sites remotely and most of the tasks are automated. Lloyd-Jones’s company has only 20 staff, which keeps the day-to-day running costs relatively low, although he plans to hire a further 70 as three more farms go live next year. Industry critics say LED lights suck up a lot of energy and their sustainability credentials are not foolproof. 

Lloyd-Jones retorts: “It’s a lazy argument against vertical farming. Yes, it needs a lot of energy, but you can use your renewable energy. “What’s the real energy cost when you are using a tractor, are having employees drive to a farm and using heavy machinery, and putting produce into big lorries and flying it all over the world?”

Vertical farms are also relatively limited in terms of what they can grow. It is not practical to grow tall trees, which take up a lot of space and time to mature, for example, nor will the new breed of farmers want to cultivate commodities such as bulk grains or cereals with wafer-thin profit margins.

“I don’t foresee a time where you are going to grow potatoes in vertical farms,” says Stewart McGuire, a former Credit Suisse analyst who now runs Ocado’s ventures business. “The value in vertical farming is when you have a crop that is especially valuable on a per kilogram basis like lemongrass and basil, where the majority of the plant created is edible. You don’t eat the tree of the apple tree.”

Ocado ploughed £17m in vertical farming last year. It invested in both Lloyd-Jones’s JFC, plus a joint venture with a Dutch firm that provides climate control technology alongside an American vertical farm business. 

“We want to have a bit more flexibility across the whole sector,” says McGuire. “Having a farm [JFC] already at scale eliminates some of the pitfalls of just trying to rely on what might seem an interesting technology.”

Ocado thinks it can use vertical farming to its advantage after it largely anticipated the shift to online grocery shopping. It has ambitions to sell vertical farming to other retailers across the world and beyond.