Back in 2020, I was fascinated with the concept of indoor farming. Growing food indoors using LED lights, complex HVAC systems, in vertical layers stacked on top of each looked like a scene from the future. Imagine an Amazon warehouse full of boxes, but replace the carboard with leafy greens lit with neon LEDs. I was a fanatic and would tell anyone who would listen that it was the next big thing in agriculture.
The technology made sense, the numbers made sense. A 2-acre indoor vertical farm could produce the same output as a 720 acres of traditional farm using 90% less water. With the land resources being scarce, I strongly believed that these indoor farms will usher us into the next green revolution and help feed a population of 10 billion by 2050.
For two years, I scoured the internet and read articles, listened to podcasts, connected with people, even wrote my own articles. Because food is a part of our daily lives, the impact of working in this field was tremendous. I wanted to be a part of it. I connected with recruiters and engineers on LinkedIn who were working in indoor farming companies, applied to several positions.
There was this one recruiter who reached out to me after seeing my application on every mechanical engineering related position that popped up on their website with detailed cover letters. Some interviews I couldn’t crack and some companies didn’t sponsor a visa. It felt like a one sided love affair, where all my efforts were somehow keeping me away from my dream job. Heartbroken, I switched jobs to a different industry, moved half way across the country, met new people and my fanaticism for indoor farming calmed down a bit.
I still kept up with the news and things have taken a downturn in the last year. A publicly listed company Kalera filed for bankruptcy in April 2023, Upward Farms - 10 year old company - who had plans to build the world’s largest indoor farm closed its doors in June 2023. AppHarvest an indoor tomato grower, who went public through a SPAC acquisition saw their stock price dwindle from $35 to $0.35. A lot of people I had connected on LinkedIn at these indoor farming companies were laid off.
The latest shock for me was when the indoor farming behemoth AeroFarms - founded in 2005 - filed for bankruptcy this month. I had stalked this company with any information I could find on the internet and followed their progress for over two years. Watching this giant fall was like watching a towering tree uprooted after a storm.
With AeroFarms’ decline, the naysayers came out all guns blazing with comments like “We told you so”, “why would you try to replace the sun with LEDs?” , “Lettuce is cheap and energy is expensive”.
But despite the downturn, and the concerns being valid, I am bullish about indoor farming.
Their biggest challenge is energy efficiency and scaling operations. Having a small indoor farm is easier but when you try to scale it up is when it gets wonky. Bigger warehouses need more energy and more energy means more money. They know how to grow lettuce and other leafy greens indoor, they need to figure out their energy efficiency. LED prices have dropped in the last decade, which means the energy costs are going down. This makes me hopeful that in the near future, the energy prices will go down even further making this feasible.
Just like Tesla isn’t about the cars anymore it is about their factories. These indoor farming companies need to figure out the operations to scale further and balance the finances that causes troubles while scaling up. I feel that they will get it right just like Musk did with Tesla.
There are a few key players that I’m riding my hopes on. Plenty, the San Francisco based company who raised $400 million from Walmart is a leader in the space. I interviewed with them and met some brilliant and smart folks working there. They opened their largest farm in Compton, CA last month. Oishii who sell premium Omakase strawberries, Square Roots the container faming company owned by Elon Musk’s brother Kimbal, and many more who are growing at a tremendous pace.
The recent downturn has followed the billions of VC investment in this sector and it is currently going through the trough of disillusionment. I was part of the peak of inflated expectations and I can feel it slowly climbing the slope of enlightenment. I am no McKinsey analyst to predict the future, but I am an optimist who believes that in the next few years we’ll see large scale indoor farms complementing traditional farms.
PS: Looking back, maybe, all those job rejections were fate’s way of keeping an eye out for the immigrant on a work visa. But hindsight is 20/20.