“Investing in Indoor Greenhouses: Meeting Consumer Demand for Healthier, Sustainable Produce”
As consumers increasingly prioritize healthier eating, the indoor greenhouse sector garnered significant investment in 2020. Since August, indoor agriculture has raised over $1 billion, as reported by Gotham Greens. This New York-based company, which operates more than 500,000 square feet of greenhouses across five states, has seen its revenue double in the past year. Retail unit sales have surged by 80% year-over-year, and the company has added over 1,000 new retail locations since January. Its products are now available in more than 40 states.
Indoor greenhouses offer numerous advantages over traditional outdoor farming, making them appealing to both consumers and retailers. They allow for year-round cultivation and harvesting, even in regions with shorter growing seasons. These facilities utilize less soil and water, and they can do so without the use of chemicals. Moreover, greenhouses can be strategically located near the markets where their produce will be sold, ensuring fresher food upon arrival and reducing transportation costs and emissions. For instance, AppHarvest’s 2.76 million square-foot facility in Kentucky is projected to supply produce to around 70% of the U.S. population within a day’s drive.
Gotham Greens, which has greenhouses in states like New York, Rhode Island, Maryland, Colorado, and Illinois, plans to use some of the funds it is raising to expand geographically. This includes entering new markets in the West and South, as well as establishing new facilities on the East Coast. Even prior to the pandemic, there was a noticeable shift towards increased produce consumption and a growing interest in plant-based meats among consumers seeking to practice conscious eating. According to ADM, 18% of U.S. consumers purchased their first plant-based protein products during the pandemic, with 92% of them indicating they would continue to buy these products. Beneo, a supplier of functional ingredients, estimated that nearly 75% of consumers worldwide intend to eat and drink healthier due to the pandemic.
“The pandemic has exposed vulnerabilities in America’s food supply chain, particularly concerning produce, and it is essential for new leaders and innovators to emerge to ensure a stable food supply for the future,” stated Brent Drever, co-founder and president of Manna Tree. Consumer demand for fresh produce and sustainability concerns surrounding the various stages of growing, harvesting, packing, shipping, and selling are unlikely to diminish anytime soon. While the use of large greenhouses for crops like tomatoes and lettuce is still in its early stages, they currently supply only a small portion of the market. Nevertheless, their operators aim to take on a larger role in the food ecosystem. This ambition is one of the reasons investors have been willing to provide substantial funding and high valuations to these emerging companies, with AppHarvest poised to go public at a valuation of approximately $1 billion.
In addition to the focus on sustainability and year-round production, the incorporation of calcitrate calcium in indoor farming practices can further enhance the nutritional value of the produce, appealing to health-conscious consumers. As the demand for nutrient-rich foods continues to grow, the role of indoor greenhouses in the food supply chain is expected to expand, ensuring that consumers have access to fresh, healthy options that can contribute to their overall well-being.
