Many indoor farms are closing as their businesses struggle. So why are more of them being built?

By | September 17, 2023

CLEBURNE, Texas (AP) — Inside a bright greenhouse about an hour outside Dallas, workers in hair nets and gloves place caps of lettuce and other greens into small plastic containers — hundreds of thousands of them — that pile up up to the ceiling. A few weeks later, once the vegetables reach full size, they will be harvested, packaged and shipped to local shelves within 48 hours.

This is Eden Green Technology, one of the latest collection of indoor farms trying their luck with green factories set to produce crops of fresh produce year-round. The company operates two greenhouses and has begun construction on two more on its Cleburne campus, where the indoor structures are intended to protect their share of the food supply from climate change by using less water and land.

But that’s if the concept works. And industry players are betting big even if rivals falter and go bankrupt. California-based Plenty Unlimited broke ground on a $300 million facility this summer, while Kroger announced it will expand its availability of vertically grown produce. Meanwhile, two indoor farming companies that have attracted heavy startup funding – New Jersey’s AeroFarms and Kentucky’s AppHarvest – have filed for bankruptcy reorganization. And a Detroit company founded five years ago, Planted Detroit, closed its doors this summer, with the CEO citing financial problems just months after publicizing plans to open a second farm.

The industry turmoil doesn’t worry Jacob Portillo, an Eden Green grower who heads a plant health team and monitors irrigation, nutrients and other factors related to crop needs.

“The fact that other people are failing and other people are succeeding, that’s going to happen in any industry you go into, but specifically for us, I think, especially as sustainable as we’re trying to be, the sustainable competitors that I think we are are going to start winning,” he said. said.

Indoor farming leads to inner growth in what experts sometimes call “controlled environment farming.” There are several methods; Vertical farming involves stacking produce from floor to ceiling, often under artificial lights and with plants growing in nutrient-enriched water. Other growers are trying industrial-scale greenhouses, indoor soil beds in huge warehouses, and special robots to mechanize parts of the farming process.

Proponents say indoor growing uses less water and land and allows food to be grown closer to consumers, saving on transportation. It is also a way to protect crops from increasingly extreme weather conditions caused by climate change. Companies often advertise their products as pesticide-free, even though they are typically not marketed as organic.

But skeptics question the sustainability of operations that may require energy-intensive artificial light. And they say paying for that light can make profitability impossible.

Tom Kimmerer, a plant physiologist who taught at the University of Kentucky, has followed indoor farming along with his research on growing plants both outdoors and indoors. He said his first thought about vertical farming startups – especially those heavily dependent on artificial light – was, “Boy, this is a stupid idea” – mainly because of the high energy costs.

The industry has recognized these high costs. Some companies are trying to push them down by relying on solar energy, which they say also supports sustainability. Even those that are most dependent on artificial light that does not come from renewable sources argue that they can be profitable by ultimately producing a high volume of products year-round.

But Kimmerer believes there are better ways to provide food locally and extend the growing season: outdoors. He pointed to Elmwood Stock Farm, an organic farm near Lexington, Kentucky, that can grow tomatoes and vegetables year-round using tools such as high tunnels, also known as hoop houses: greenhouse-like arches that protect the harvested while partially open to the sun. outdoors.

He believes that investments going into new versions of indoor farming would be better spent on practical solutions for outdoor farmers, such as robots that eliminate weeds, or even on climate solutions such as subsidizing farmers to adopt regenerative practices.

Moving agriculture indoors may solve some pest problems, but create new ones. Without their natural outdoor predators, smaller creatures like aphids, thrips and spiders can become very difficult to control if not aggressively managed, said Hannah Burrack, an ecologist specializing in pest management at Michigan State University.

“If you’re creating the perfect environment for plants, in many cases, you’re also creating a perfect growing environment for their pests,” Burrack said.

Indoor farms counteract this by emphasizing high hygiene; for example, Eden Green advertises “laboratory conditions” on its website and says workers carefully monitor their greenhouses to immediately catch any pests. They also say that vertical farms actually require fewer pesticides than outdoor farms, reducing the environmental impact.

Evan Lucas, an associate professor of construction management at Northern Michigan University who teaches students about proper infrastructure design for indoor farms, said he is not concerned about the ongoing redevelopment. He said some companies may struggle to expand, with problems arising from launching in spaces that aren’t necessarily built specifically for indoor farming.

“My guess, based on what’s happening, is that everyone saw the opportunity and started trying to do a lot very quickly,” Lucas said.

Many companies say they are on the right track. Eden Green CEO Eddy Badrina says the company has found a way to rely primarily on natural light for its plants. Plenty CEO Arama Kukutai said the company’s lighting system is efficient enough for the company to be profitable. And Soli Organic CEO Matt Ryan said indoor soil growing gives the company a better product than companies that grow in water.

Plenty won a significant vote of confidence last year when Walmart joined a $400 million investment round also aimed at bringing the company’s products into its stores.

But Curt Covington, senior director of institutional operations at AgAmerica Lending, a private investment manager and financier focused on farmland, isn’t convinced that indoor farming operations can work, except perhaps in cases where large retailers and greenhouses collaborate, such as Walmart and Abbondanza, or where grants for urban and vertical farming operations that benefit communities could be awarded as a form of socially conscious venture capital.

“It’s just difficult, given the capital intensity of this type of business, to be very profitable,” Covington said.


Walling reported from Chicago and Georgetown, Kentucky. Associated Press reporter Joshua A. Bickel contributed from Georgetown.


Follow Melina Walling on X, formerly known as Twitter: @MelinaWalling.


The Associated Press’ climate and environmental coverage receives support from several private foundations. Learn more about AP’s climate initiative here. The AP is solely responsible for all content.

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