Recently, our colleagues, Kalena Gravina and Ari Marder, attended the Indoor Agtech Innovation Summit in NYC to meet with industry leaders and innovators. The event was focused on the role vertical and indoor farming plays in serving local, regional and national food systems and brought together a unique variety of innovators, operators, producers, scientists, buyers and financiers. Topics of conversation included nutraceuticals and pharmaceuticals, as well as investments in the industry. We’ve highlighted a couple of major trends in agtech that were frequently discussed at this industry-leading event:
The Urbanization of Agriculture
As urbanization occurs and populations grow, cities are looking for ways to efficiently feed those living there. Currently, urban agriculture is practiced by more than 800 million people worldwide, accounting for 15-20% of the world’s food. This number will continue to grow as urban populations increase and the benefits of urban agriculture are recognized. This expansion is seen across the indoor agriculture and farming industry—from 2016 to 2017, vertical farming venture capital funding increased 653%. Gotham Greens, an indoor agriculture company who attended the AgTech Innovation Summit is just one example of this continuous expansion. With a recently closed $29 million Series C equity funding round, it plans to develop 500,000 square feet in five states. Additionally, New York based company and presenter at the summit, Bowery Farming, is building its second facility in New Jersey after raising $20 million in Series A funding.
Digitalization Driving Industry Growth
Digitalization is a key driver maximizing returns across industries—according to the World Economic Forum, digitization alone boosted the world economic output by $200 billion. With limitations on space and resources, indoor agriculture is turning to digital technologies as a means to maximize use of resources, improve precision automation, and ultimately revenue. We’re seeing automation and IoT specifically driving these rapid shifts in capacity:
- Automation: Engineering systems like robotics and lighting can reduce costs to increase gross margins and optimize efficiencies. Holland based company and presenter at the summit, Priva, develops solutions for climate control, process automation and building automation for horticulture and the built environment. In the case of their Soft Fruit solutions, it is already delivering better quality produce at a lower cost. Utilizing resources like labor, water and fertilizers more efficiently, Priva Fruit solutions has contributed 30% savings on water and fertilizers, 20% increase in production and quality and 10% increase in labor performance. Similarly, Intelligent Growth Solutions (IGS) is reimagining our agricultural system with better quality lighting to optimize vertical farming growth. The Department of Energy has set goals to improve energy savings 20% by 2030 through increased efficacy and price of LED lighting. With this declining cost and improved electrical efficiency, IGS is steering the nascent industry and convincing the naysayers that indoor vertical farming can be economically viable. CEO, David Farquhar, outlines how innovation, collaboration and investment can drive the environmental and economic benefits of the industry.
- IoT: The controlled environment of indoor agriculture facilities is ideal for implementation of IoT-based technologies. We’re seeing new and old companies expanding into the ‘big data’ realm and behind the precision of IoT functions are the sensors. They provide data on factors like temperature and soil conditions and when combined with analytics or IoT functions, they provide larger produce yields and optimization of resources. For the top 10 sensors in indoor farming, we’re reading Amanda Shiffler’s piece, “Smart Sensors in Farming: 10 Startups to Watch in 2018.”
As a marketing and media partner, we’ll be in attendance at future Agtech events organized by Rethink. As the indoor/urban agtech movement grows, we’ll continue to be among those watching this market closely.