Editor’s Note: Chris Taylor is a senior consultant on The Mixing Bowl team and has spent more than 20 years on global IT strategy and development innovation in manufacturing, design and healthcare, focusing most recently on indoor agtech.
Michael Rose is a partner at The Mixing Bowl and Better Food Ventures where he brings more than 25 years immersed in new venture creation and innovation as an operating executive and investor across the Internet, mobile, restaurant, and food tech and agtech sectors.
Taylor and Rose’s partners have produced landscapes on food tech and agtech for field production over the years, but this is the first release of their Indoor AgTech Landscape (download it here). As opposed to an investment or M&A oriented map, they wanted to capture the market from an ecosystem perspective.
I caught up with them both to find out more about how they created the landscape and things for readers to look out for.
What are the key features of the landscape you want readers to be aware of?
We are tracking more than 1,000 companies in the space though only a subset appear on the landscape.
The first thing to note is that we include greenhouses in the discussion as an indoor growing approach. At times, the conversation seems to be just limited to growing in buildings or containers with artificial lights, what we call “Sunless” or others broadly refer to as indoor, vertical, or urban farming.
Secondly, while there has been a great deal of activity around cannabis and alternative proteins such as insects, for the purpose of this landscape we kept to traditional food crop production.
The map focuses on the technology used in that production, from seeding to immediate post-harvest activities. We segment the landscape into the specific categories of component technologies, different types of growing systems and growers.
We took a slightly different tack for a technology landscape by including actual growers. Many of them are taking innovative approaches to developing, integrating and utilizing technology, so we thought they should be reflected as part of this tech landscape environment.
How has the indoor agtech industry changed in the last year?
Recently, there has been a clear uptick of interest and activity in the sector. People are recognizing the potential opportunity for indoor growing addressing many of the challenges in food and ag. Since the Plenty funding in late 2017, we have seen a surge of funding for both sunless and greenhouse approaches. Notably in greenhouses was Equilibrium’s raise and deployment of its new $336 million fund. While most of the recent indoor funding has been in the US, it has been exciting to see significant activity around the globe whether it be IGS’ development in Scotland (disclosure: that’s an AgFunder portfolio company), Spread’s new facility in Japan, or Pure Harvest’s greenhouse opening in the UAE.
And most notably, we have recently seen the walls come down between sunless and greenhouse approaches. Vendors are now selling offerings for both and growers are increasingly combining the two approaches. We also saw the announcement of Infinite Acres, a blended joint venture between greenhouse tech royalty Priva, sunless grower 80 Acres, and the UK egrocer Ocado.
Are there gaps in indoor agtech innovation?
Like with field farming, there is a lot of promise, and promises in automation and AI.
Certainly, the automation of crop work and harvesting, particularly for vine crops and berries, has been a continuing and unmet challenge. The growth habit and maintenance requirements of these crops makes for a difficult environment for a robot to navigate quickly and accurately. Of course, the labor shortage is not going away, so expect continued effort in automation and robotics. Breeding to change plant structure, making automation easier, may also be part of the solution.
As in other industries, technologies such as sensors and big-data analytics are coming together in indoor ag. This means encapsulating and improving on grower knowledge and decision-making to optimize crop yields and quality. Going forward, farms will be increasingly managed by predictive and proactive AI that can recognize complex interactions between plants and their environment beyond what a grower could see. Beyond that, there is a need to incorporate other factors, such as energy pricing in decisions to maximize the financial success of the overall operation.
How does indoor agtech innovation differ by geography?
Indoor growing is already a worldwide phenomenon. Although Europe and North America predominate on the landscape, companies from 40 different countries are represented.
The plant factories throughout Asia were clearly pioneers of sunless growing, but innovations and progress in the region have been, at times, hard to recognize. The US has garnered the most attention in recent years and made the most visible innovation progress in this area. Europe has embraced the technology more recently, highlighted by Infarm’s extensive rollout of units inside retail stores.
In the greenhouse sector, the Dutch continue to lead in the innovation of high-end facilities, spreading their methods to the rest of the world. A number of North American companies, such as Houweling’s, Mastronardi Produce and Mucci Farms have also been significant contributors. Although China already has massive acreage of low-tech solar greenhouses, high-tech vendors see great opportunity there.
While indoor growing is less common or less sophisticated now in some regions, those areas provide some of the greatest potential to realize the benefits of indoor agtech over the coming years. It’s doubtful that a one-size-fits-all solution will dominate, however. The challenges, needs, and parameters in Singapore are not going to be the same as St Louis, or Dubai.
What are the key challenges for the indoor agtech industry in your opinion?
Indoor agtech vendors face challenges similar to those of their field farming cousins. From a development perspective (say relative to traditional software), they may be hampered by long iteration cycles tied to crop growth and limited access to real-world conditions and data, a requirement for machine-learning and AI. From a business perspective, even though indoor ag is a technical discipline, they encounter relatively conservative customers. As with the field farming market, the adoption curve and sales cycle can be somewhat deliberate.
That being said, indoor farmers, like field farmers, are confronted with real market demands for safety, sustainability, and traceability, and face continuing issues around labor and profitability. Technology has an important role in meeting those challenges and we look forward to seeing farmers and technologists collaborate on innovations in data capture and analytics, automation, and predictive and autonomous control.