A June report was published. New vertical farm has opened at the Bedford suburb. At a swanky opening event, members of the UK Parliament heard that the gleaming facility would one day produce 20 million plants annually. Infarm was the European vertical farm company. Its latest opening saw them announce that they will be able to grow vegetables in warehouses with LED lighting and not in open areas.
However, the Bedford farm’s future is less than glamorous. On November 29, Infarm’s founders emailed its workforce to announce they were laying off “around 500 employees”—more than half of the workforce. The email detailed the firm’s plans to downsize its operations in the UK, France, and the Netherlands, and concentrate on countries where it had stronger links to retailers and a higher chance of eventually turning a profit. In September, Infarm had already laid off 50 employees, citing a need to reduce operating costs and focus on profitability.
Just six months ago, the vibe from Europe’s biggest vertical farm company was unrelentingly optimistic, so what changed? Cindy van Rijswick from RaboResearch is a Dutch researcher and strategist. In 2022, there are several challenges facing vertical farms. First, electricity prices are extremely susceptible to the industry. Powering all of those plant-growing LEDs uses a lot of electricity, and between December 2020 and July 2022 consumer energy prices in the EU went up by nearly 58 percent. European vertical farms spent approximately 25% of their operations on electricity in 18 months prior to van Rijswick’s estimates. However, that figure could have gone up by as much as 40%.
Investors are also looking for quicker routes to profit as they tighten their belts. It is more expensive to construct vertical farms than traditional outdoor farms. AppHarvest—a US-based firm that builds high-tech greenhouses—has struggled to find enough cash to fund its ongoing operations despite going public in 2021. In its latest quarterly report the company said there is “substantial doubt” about its ability to continue into the future.
Global financial conditions are also making it difficult for consumers. Vertical farms are known for growing herbs and leaves, as well as other salad veggies. Leafy greens are the industry’s go-to produce because they grow quickly under LEDs and have a short shelf life and premium price point. Inflation is high so consumers may be tempted to give up expensive, vertically-farmed herbs in favor of something more affordable. That’s particularly true for European vertical farms. “The European market is a difficult place for vertical farming because there’s so much competition from crops that are grown in fields or greenhouses,” says van Rijswick.
If vertical farms look beyond the United States, they might have a greater chance of survival in countries with low energy and difficult to grow crops. The Middle East is a good place to start. Gulf Cooperation Council countries—a group made up of Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates—import around 85 percent of all their food and 56 percent of their vegetables. “When choosing new markets to expand to and establish a farm, we are going to look to places that have an increasing need for food production and food security,” Infarm founder Erez Galonska told the Vertical Farming Congress in Abu Dhabi on December 14. One of the world’s largest vertical farms opened earlier this year in Dubai. The facility is nearly three times the size of Infarm’s Bedford growing center and supplies leafy greens for the Emirates airline and local stores.
