Global Vertical Farming Leaders
Indoor vertical farming is vital for the future of food security. Climate change and the COVID-19 pandemic have disrupted global supply chains, forcing countries to rethink the way they source food and localize its production through indoor vertical farming. Some countries are a few steps ahead, while others need to move fast. Here are the top 10 countries and regions that we’re looking out for.
1. Saudi Arabia - Persian Gulf
The Persian Gulf is abundant in energy, but it lacks water resources and arable land. This poses a challenge for agriculture and an opportunity for indoor vertical farming, which offers an ideal solution for the region. Why? Because indoor vertical farms require very little water and no arable land.
Saudi Arabia is located in the heart of the Persian Gulf and indoor vertical farms could offer a sustainable food supply to its population of more than 34 million people. What’s more, the concept aligns with Crown Prince Mohammed bin Salman’s vision for Neom, a futuristic smart city in his kingdom’s northwest.
Smaller nations in the region such as Kuwait, Qatar, Bahrain and the UAE could also benefit from indoor vertical farming. They have high concentrations of wealth and share the issues of limited arable land and water resources. Most of their food supply is imported from India, Europe and the United States.
The Covid-19 pandemic caused a disturbance in supply chains, opening doors to indoor vertical farming, as Saudi Arabia and its neighbors race to become more sustainable. This is a unique opportunity for indoor vertical farming pioneers to invest in one of the world’s wealthiest regions, which is also especially vulnerable to climate change.
2. Denmark - Nordics
In 2015, the EU and 190 states signed the Paris Agreement with the goal of sustainable development. Denmark has since led the cause by focusing on the development of wind power and the country now produces a surplus of carbon neutral energy. This opens the door to benefits from indoor vertical farming.
It is no secret that indoor vertical farms are energy-intensive due to various technologies, including LED lighting and automation. However, these needs can be met sustainably in Denmark and other Nordic countries, including Sweden and Norway. Our partner, for example, Nordic Harvest is utilizing surplus energy from wind farms.
The Nordic countries all lack daylight hours during the winter months, limiting their agricultural capacity and forcing their dependency on food imports. Indoor vertical farming enables these countries to localize their food supply chain, reducing food miles and carbon emissions from imported goods. It also offers them food security, relying less on seasonal harvests, which are vulnerable to climate change.
3. Lithuania - Baltics
Like in the Nordics, Lithuania and the Baltic states offer some of the world’s most fertile consumer marketplaces for indoor vertical farming produce, and the region’s vertical farms will soon prove themselves profitable. This is based on positioning vertically farmed produce against imported organic produce.
Many interesting technologies are emerging from the region. For example, Lithuanian vertical farming startup, Baltic Freya is developing “fogponics”, as opposed to hydroponics or aeroponics. While each of these growing methods can improve sustainability, it has become increasingly critical to prove feasibility. The Baltics (along with the Nordics) offer an ideal consumer marketplace for this to happen.
4. Germany - Central Europe
Germany is at the forefront of researching and developing agriculture technology. Vertical farming startups set up near supermarkets, distribution centers and restaurants, so that fresh produce can be made easily available to customers. This creates a greener supply chain by cutting down on food miles.
Food prices and energy consumption are hard to manage. It is especially difficult to convince local communities to opt for fresh vegetables at a premium cost. Therefore, the main issue for urban farming companies in Germany, Poland and Hungary is finding the right balance between economy and ecology.
Not every indoor vertical farm in Central Europe is growing plants for food. Vertigo Farms, a Polish vertical farming startup, is built around a B2B business model. It aims to grow herbs and plant extracts for the German pharmaceutical industry, which is worth over $44 billion USD according to some estimates.
5. France - Western Europe
There is a strong demand for out-of-season produce in France, such as strawberries in winter, which would normally be imported from the southern hemisphere. Indoor vertical farming enables French retailers to offer consumers year-round access to some of their favorite fruits and vegetables while also reducing food miles.
The trend of French vertical farming startups focusing on niche crops is extending beyond fruits and vegetables into other specific industries. Jungle, for example, has distinguished itself by producing speciality flowers for the $2 billion USD French fragrance industry.
As opposed to France where arable land is plenty, the UK is a much smaller country with less space for agriculture and food production, but British vertical farming startups offer some highly creative solutions. One example is Growing Underground, which converts disused, subterranean spaces into indoor vertical farms.
6. Canada - North America
Canada imports a lot of its food and like in other countries, the COVID-19 pandemic has pushed the country to reconsider its food supply. Due to an increasingly unpredictable climate, the threat of food insecurity is affecting many parts of Canada. Heat waves in summer followed by freezing temperatures in winter are a cause for concern.
South of the border, parts of the United States are suffering from the same threat as Canada. COVID-19 broke supply chain links and disrupted consumer habits, leading to massive amounts of wastage. Extreme weather events, wild fires, hurricanes and flooding are becoming increasingly common, threatening agricultural production.
On the positive side, Canada and the US have abundant space for building indoor vertical farms and investment capital has been pouring into the ecosystem. North America has produced several indoor vertical farming unicorns to date, making it arguably the most competitive region for indoor vertical farming, worldwide.
7. Philippines - Southeast Asia
Lack of arable land and limited resources are problems for the Philippines, but natural disasters pose an even greater threat to the country’s food security. Situated in the Pacific Ring of Fire with more than 50 active volcanoes, the Philippines is regularly battered by typhoons and rattled by earthquakes.
According to the Philippines Agriculture Department, the 2020 Taal Volcano eruption caused upwards of 3 billion PHP in losses to the agriculture industry and in 2021, Tropical Storm Dante flooded over 1 thousand hectares of farmland. By isolating agriculture from the natural world, indoor vertical farming presents a solution to ensure the year-round Philippines’ food supply, even during typhoons and seismic events.
8. Singapore - Southeast Asia
Singapore is not far away from the Philippines, but it rarely feels the impact of earthquakes or typhoons. Its main issue is lack of arable land, coupled with high land value and ultimately, its reliance on food imports. Over 90% of Singapore’s food is imported, including nearly 90 thousand tonnes of vegetables, annually.
That’s why recently, Singapore introduced the “30 by 30” goal to produce 30% of its food domestically by 2030. This creates opportunities for vertical farming startups to land institutional funding and construct indoor vertical farms in Singapore. At least $30 million SGD was earmarked for grants and loans in 2020.
9. Japan - East Asia
Several parts of Japan lack arable land. In 2018, World Bank reported that only 11.8% of land in Japan was suitable for agriculture. By introducing indoor vertical farms in urban areas, Japan can effectively use its limited land resources. Yields can be 100 times greater than those of conventional farms using the same amount of space.
Japanese vertical farming company, Mirai focuses on sustainability by recycling drain water and purifying it through evaporation. Meanwhile, Spread claims to be one of the few profitable indoor vertical farming companies. Japanese companies have already established vertical farms in the most populous locations, nationwide.
10. South Africa
Droughts threaten food security in South Africa with the most recent longterm drought having occurred between 2018 and 2021. Due to the lack of water, the majority of South Africa’s food has to be imported from countries like China, the United States, Argentina, Germany and the United Kingdom.
Indoor vertical farms can operate with very little water. Some indoor vertical farming startups claim to use 95% less water than conventional farms, growing crops in hydroponic or aeroponic systems as opposed to soil. However, South Africa’s power supply poses a problem and experts predict it could take at least 5 years to overcome.