In 2020, during Concerns about food supply and quality were very high during the Covid-19 crisis. This prompted big changes to the way some food is produced: There was a rise in the use of regenerative farming principles—methods of growing food that also support nature by, for instance, keeping soils healthy and stable, improving water and air quality, and improving local biodiversity—and an expansion of food production in and close to cities, leading to less waste. 

In 2021, PepsiCo, Danone, Nestlé, and Unilever—vast, multinational, fast-moving consumer goods (FMCG) companies—announced they were adopting regenerative agricultural practices across millions of acres of farmland. This has been complemented by growth in urban farming, with vertical farming business Infarm recently opening the largest urban farm in Europe, covering 10,000 square meters. These developments are important steps towards a more resilient system of food that benefits both humans and nature. 

We know today that food systems must be resilient to unexpected shocks like the pandemic. In 2023, we will be redesigning food to also help us solve pressing global challenges including climate change and biodiversity loss.

This is possible only if the entire system can be designed to be regenerative. Instead of bending nature in order to make food, the food system must be designed to allow nature to flourish. FMCGs as well as retailers and innovators in 2023 will assume this responsibility, working together with farmers to establish a circular economic system for food. 

They will start to choose ingredients that aren’t only regeneratively produced but are also lower-impact, diverse, and upcycled. You don’t have to make breakfast cereals with wheat from conventional farming. Instead, use a mix of peas and wheat. According to a recent study, making cheese, cereal, and potato products using this approach could reduce greenhouse gas emissions from the food industry by 70 percent and reduce its impact on biodiversity loss by 50 percent in Europe. It is significant because the global food system accounts for one third of all greenhouse gas emissions.

We’re already seeing seeds of change that will grow in 2023. Brazilian coffee producer Guima Café, supported by Nespresso and reNature, is becoming a regenerative coffee farm, producing more types of ingredients from the same land and diversifying its offering. Products that are made with upcycled ingredients are appearing on supermarket shelves, including Renewal Mill’s Dark Chocolate Brownie Mix and Seven Bro7hers’ Sling It Out Stout, brewed using upcycled Kellogg’s Coco Pops. British food brand Hodmedod wants to find lesser-known and less impactful foods, such as black badgerpeas or fava beans.

It is not only policymakers who are taking actions. New government schemes in the UK reward farmers and land mangers for their services, such as providing clean water to wildlife and plants. It allows them to thrive, and helps reduce climate change. There are pilots already in operation and more UK land managers will participate in 2023.

The list is just the beginning. In 2023, we will see the launch of an innovation challenge—supported by the People’s Postcode Lottery—aimed at FMCGs, retailers, and food innovators to bring more iconic food products made with lower-impact, diverse, upcycled, and regeneratively produced ingredients to market. These products will demonstrate the benefits of circular design in food production. 2023 is the year that whole food products will be redeveloped to support nature’s growth.

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.