According to consultancy IDTechEx, the location and suitability of the facility chosen are central to the success of vertical farming operations

As vertical farming continues to grow in popularity, with funding hitting a record high of US$1bn in 2021, consultancy IDTechEx has highlighted the importance of choosing the right location in its latest report, ‘Vertical Farming 2022-2032’.

Many proponents of vertical farming foresee a future of “smart cities” fed by vertical farms in skyscrapers, but the report suggests the reality is a little more complicated.

“While growing crops in the centre of a city may seem ideal, the reality is that this may be counterproductive,” the report stated. “Obtaining and maintaining such a location is expensive and can contribute significantly to the operating expenditure of a vertical farm while presenting logistical challenges in distributing produce; the ‘last mile’ of food distribution is often the hardest. 

“Having a farm right next to the consumers themselves may also be less ideal than instead choosing a location near food distribution centres, as this allows for more efficient delivery of produce. As distribution centres are typically located on the outskirts of cities, the cost of land is also much cheaper.”

Since vertical farms can significantly reduce water usage over conventional farming and enable cultivation in extreme climates, IDTechEx said vertical farms would ideally be located in regions of water scarcity, such as sub-Saharan Africa and the Middle East, or in areas with extreme climates like Scandinavia. 

“The amount of agricultural land available is also an important factor – regions looking to increase food security and reduce reliance on imports while facing challenges in acquiring sufficient agricultural land would find vertical farms to be ideal,” the company stated. “A particularly prominent example of such a country is Singapore, which has demonstrated much interest in vertical farming over the last few years.”

The availability of fresh produce in the country and the distribution networks in place should also be considered, the report continued. 

“Vertical farms use the added freshness and higher quality of their crops as a primary selling point, but these are typically offset by higher prices,” it pointed out. ”Should there already be a large supply of high-quality produce made available at lower costs, vertical farms will find it hard to distinguish their own produce and may struggle to establish a significant market share.”

Conversely, countries lacking ready access to fresh produce are expected to see greater demand for vertically farmed products. 

“An example of such a region would be the Middle East,” IDTechEx stated. ”Leafy greens typically travel several thousand miles to reach stores, resulting in consumers facing high prices and low-quality products. The high price of conventionally farmed leafy greens, alongside government subsidies, makes it easier for vertically farmed produce to approach price parity while providing much fresher, higher-quality products.’

In addition to the location, the suitability of the facility chosen is also crucial, given how energy-intensive vertical farms are. The facility’s layout should avoid impeding workers and affecting worker efficiency, IDTechEx explained. 

“Only through proper optimisation of growing operations to improve efficiency and reduce costs can vertical farms reach their true potential,” the consultancy concluded.