Over the last month, I wrote a great deal about different technologies which are likely to have an impact upon many different industries.
Presently, a hot topic is the food industry. With the population of the planet growing as well as more than a billion people under nourished, this is a topic that warrants a great deal of innovation.
Fortunately, a number of companies are progressing forward in many different ways to address this issue. One with great promise is vertical/climate controlled farming.
&ever is a company that is opening a vertical farm in Singapore in the 4th quarter of next year. According to the CEO, Henner Schwartz, this will produce 1.5 tons of leafy greens each day.
This will be the second project for the company. It is already operating one in Kuwait. According to Schwartz, it is being well received in spite of launching in March, right in alignment with the COVID-19 breakout.
Obviously, Kuwait is a great place for a vertical farm since it is a rather dry area. One of the biggest advantages to this technology is that it uses 95% less water than traditional farming.
While Singapore is not suffering from a water shortage, land is at a premium. Since it is not readily available, it makes traditional methods difficult. A vertical farm is an ideal solution since it is not dependent upon a great deal of land to operate.
All of this is fine but success will ultimately come down to price. In Singapore, the pricing is expected to be in line with premium organic food in that area. One drawback there is the cost of electricity is high. This is going to hinder the costs of production for the company.
Schwartz also had this to say:
He added: “The price point for indoor vertical farming products in many markets in the world, for example in the U.S., is very expensive. Our system is really geared towards making a meaningful contribution and we have taken quite some time to get things right, and to have the most energy efficient solution on the market.”
In order to reduce energy consumption at its Singapore site, &ever plans to use a combination of sunlight capture systems and LED lights. It is teaming up with lighting producer Signify to carry out a number of experiments.
Sadly, this is not going to get very far internationally. Most areas require lower food costs, not more expensive ones. Even if it is advantageous from an environmental standpoint, costs tend to dictate the success or failure of technologies.
Once again, fortunately, this is the first generation of things.
He added: “We expect that over time, as our efficiency becomes better and better, the price points can become lower and lower.”
One reason why those who follow technology are optimistic about approaches such as this is the idea that we will see the cost curve dropping a great deal over time. We saw this with batteries, solar panels, computers, and a host of other technologies.
Since we are not dealing so much with biological issues as much as technological, the belief is that better equipment can net greater results. This could mean greater production or lower costs for the same amount of production. Either way, the goal is to reduce the cost of the world's food supply.
There is one distinct advantage to this technology as compared to the traditional methods. A great deal of our food costs contain the amount of transportations. Since a large percentage of the world's food supply much be shipped, the percentage contained in each item is rather high.
With vertical farming, the transportation costs are virtually eliminated. While still in the very early stages, we can see production moving to smaller venues. For example, a grocery chain might have the production taking place in a back room. There the vegetables are grown for sale only a few meters away.
Technologies like this are what is going to turn all food production into a local phenomena. Presently, we have a very centralized structure with large mega-farms producing the vast amount of food the world grows. The economies of scale are in their favor. At the same time, we see they established in regions that have a climate conducive to such production.
Sadly, most of the planet is not ideal for farming of most fruits and vegetables. This could change if these types of technology becomes the norm over the next decade.
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