Language

Multilingual content from IBKR

Close Navigation
Learn more about IBKR accounts

The rise of the vertical farm

Posted May 2, 2024 at 10:00 am
Alexander Gunz
Heptagon Capital

There are site visits and then there are site visits. Your author has been privileged enough to tour semiconductor clean rooms and salmon farms (both in the pre-Blog era) as well as see offshore wind turbines at close hand and witness glass turned into solar panels. However, little can prepare a visitor for the experience of a vertical farm. There was a feeling of awe and beauty, of calm and efficiency. The lighting and temperature conditions helped too. More importantly, vertical farms help address the crucial future trend of security of food supply, a theme we have discussed previously and expect only to grow in importance.

Your author’s host for a morning last week was Jones Food Company. Located in rural Gloucestershire, the JFC2 facility (JFC1 is in northern England) looks inauspicious from the outside, a former forge converted into a 65,000 square foot ‘big box’-style warehouse. Inside, an almost fully automated and proprietary system processes around 500 trays of leafy green salads and fresh herbs daily. This translates into roughly 10,000kg a week of finished product, which is then sold to major food retailers and wholesalers around the country. We saw the varied stages of the process, from germination through to packaging. Inside the main grow room, products develop on trays stacked up to 15 storeys high under consistent lighting and temperature conditions that are constantly reviewed and optimised.

There is no doubting the ambition behind the team at Jones. Beyond its current two assets, plans are already underway for a third and management believes that their footprint could expand to around ten vertical farms in the UK. Moreover, the country could theoretically support a markedly large number of such farms (perhaps more than 90, according to Jones). The rationale is simple, “to replace food imports and give reliability of supply chains to retailers”, in the words of the group’s Finance Director. Beyond the UK, Jones believes that there is a strong logic for the vertical farm business model in geographies as diverse as Scandinavia and the Middle East.

Vertical farming, we were reminded, is still a very young industry with less than ten years of history (we first wrote on the topic in 2019). As a result, “there is a lot more we can do”, according to Jones. Future farms could see further automation and efficiency gains with an increasing emphasis on remote monitoring and data analytics. Locating farms close to renewable energy sources (as well as deploying rooftop solar) would also help improve returns on investment as well as sustainability credentials. The products your author tasted on site at JFC2 showed remarkable freshness and vitality. Other crops, such as strawberries or tomatoes could follow, should the economics be sufficiently compelling. For now, the only way forward for the vertical farm sector seems to be up.

Please note that the Future Trends Blog not be publishing next week – your author will be on a wine tour in Spain –  and will return in the middle of May

Originally Posted May 2, 2024 – The rise of the vertical farm

The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.

Join The Conversation

If you have a general question, it may already be covered in our FAQs. If you have an account-specific question or concern, please reach out to Client Services.

Leave a Reply

Your email address will not be published. Required fields are marked *

Disclosure: Heptagon Capital

The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document.

The document is protected by copyright. The use of any trademarks and logos displayed in the document without Heptagon Capital’s prior written consent is strictly prohibited. Information in the document must not be published or redistributed without Heptagon Capital’s prior written consent.

Heptagon Capital LLP, 63 Brook Street, Mayfair, London W1K 4HS
tel +44 20 7070 1800
fax +44 20 7070 1881
email london@heptagon-capital.com

Partnership No: OC307355 Registered in England and Wales Authorised & Regulated by the Financial Conduct Authority

Disclosure: Interactive Brokers

Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Heptagon Capital and is being posted with its permission. The views expressed in this material are solely those of the author and/or Heptagon Capital and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.