Looking to 2025 and Beyond: Hybrid Vertical Farms
After captivating investors, media and consumers early on, vertical farming has endured some very public and painful growing pains, as noted by our interviewees below. However, there have always been bright spots in this sector of the controlled-environment agriculture industry — and it seems that a “reset” is underway.
Of special interest as we look ahead are hybrid vertical farms, whose innovations combine the best aspects of vertical and greenhouse production. For insights into the present and future of hybrid vertical growing, CEAg World reached out to Eddy Badrina, CEO of Texas-based Eden Green Technology, and Arik Griffin, Director of Farm Systems & Technology for Vertical Harvest Farms, headquartered in Wyoming.
Despite its prominent challenges over the years, the vertical farming sector has always had bright spots. | Photo: Eden Green Technology
CEAg World: What is the most significant issue you see facing the greenhouse produce industry?
Eddy Badrina: Right now, a big challenge for the greenhouse produce industry and CEA startups in general is attracting outside investments. The industry has not had the best track record, as some CEA companies have struggled to obtain profitability, which has led to multiple high-profile bankruptcies. Consequently, there is more pressure to become profitable quickly and growing hesitancy from investors. Eden Green is focusing on strengthening the unit economics of each greenhouse, demonstrating profitability at the plant level.
CEAg World: What is the most significant issue you see facing the vertical farming industry?
Arik Griffin: If I had to pick just one it would be addressing the hype gap we have created for ourselves. Vertical farming has the ability to address real market opportunities and food chain weaknesses, but we’ve created a story about disrupting agriculture with “amazing new technology and proprietary systems” that plays really well to the high-risk/high-reward VC-type investor. Vertical farming at its core is simply a solid combination of modern manufacturing and greenhouse growing. We need to get real about that and start pitching our industry as the improved workhorse that it is rather than setting unrealistic expectations about our returns if we don’t want to be permanently dismissed by investors.
CEAg World: What is the most significant opportunity you see in controlled environment agriculture?
Eddy Badrina: Historically, indoor farming has focused on leafy greens and highly priced specialty goods, like luxury strawberries. There’s a significant opportunity for the industry to expand to new produce markets to further streamline existing supply chain inefficiencies.
Eddy Badrina
A prime example is the current herb market. Traditionally, retailers need to purchase different herb varieties from a range of suppliers, often requiring international importation. CEA can be a solution that shrinks this disorganized, wasteful supply chain. For example, Eden Green just launched a first-of-its-kind herb program this year. Our patented microclimate technology allows us to grow multiple herbs — all of which require different growing conditions — side-by-side in one greenhouse. Our streamlined distribution system provides retailers with a full suite of 10+ herbs that can go from greenhouse onto grocery store shelves in as little as 48 hours. Not only does this simplify logistics, reduce waste, and maximize the product’s shelf life, but it also results in 85% fewer food miles compared to traditional farming.
Eden Green’s herb program is just one example illustrating the significance of CEA solutions. Retailers are looking to streamline and localize their logistics, and indoor farming provides an opportunity to do so.
Arik Griffin: Our industry’s “anywhere” capabilities give us the ability to provide a huge improvement to the availability of reliable, high quality fresh food. No matter where people live, they can have nice things!
CEAg World: How do you expect (or hope) to see the industry change in the next three to five years?
Eddy Badrina: The macro trends for agriculture are only going to continue, so I expect more entrants into the CEA industry. I do believe these companies will be more focused on certain niches, like herbs, the broader leafy green segment, and nutraceuticals. Along with those, I think we will see continued consolidation, especially led by the more established traditional greenhouse companies. They will look to broaden their sales channels by tacking on more products/SKUs, and investors will capitalize them to buy or merge with those smaller niche companies. SKU expansion is a valuation multiplier for CEA companies right now.
Arik Griffin
Arik Griffin: I expect to see simultaneously a lot more vertically farmed product in the market and fewer low-volume producers — essentially a pretty substantial consolidation with larger players. I hope to see the market embrace and demand the kind of high-quality, delicious produce the vertical farming industry is perfectly positioned to provide.
CEAg World: Is there anything else you’d like to share about your business and its future for 2025 or beyond?
Eddy Badrina: As we continue to work toward scaling up production, we’re currently in the process of a $40 million expansion of our Cleburne, Texas campus. The new greenhouses are expected to open in 2025 and will triple our overall growing capacity. Much of the growing space will be dedicated to expanding our herb program as we shift towards centering our offerings around herbs. In the meantime, we’re continuing to expand our partnerships to bring our full herb suite to more retailers. Currently, we’re trialing various products with several large national grocery chains and QSRs [quick service restaurants].
Arik Griffin: I’m optimistic. Our industry has learned a lot over the past decade or so, and I think we’re just about to hit our stride.
Editor’s note: CEAg World also contacted several non-hybrid vertical growing operations for this story, but none responded to our invitations to share their perspectives.