Looking Forward to 2019

by Toby Gorman

A demand for local food, and a decrease in up-front costs for grow technology are all expected to increase activity for indoor growing in 2019.

Already, large-scale commercial operations around the world such as Aerofarms, Green Spirit Farms, Gotham Greens, Plenty, and several others are investing heavily to produce millions of pounds of tomatoes, leafy greens, microgreens, and herbs in places and at times of the year where growing was previously impossible.

While controlled environment growing itself is not new, its application as a viable large-scale producer of food as an industry is in its relative infancy. This is evident in a recent indoor growing survey produced by Agrilyst, a company that makes it easier for indoor farmers to manage crop and labor operations through their platform. Agrilyst has tracked indoor growing trends and statistics for the last few years (agrilyst.com).

According to Agrilyst’s results for its 2017 State of Indoor Farming survey, hydroponic operation owners reported a minimum of US$6.67 of revenue per square foot all the way up to $42.86, with a $21.15 average. Aquaponic producers reported a minimum of $5.20 to a maximum of $100 of revenue per square foot, resulting in a $53.89 average. Indoor vertical farms averaged $41.16 per square foot and glass or poly greenhouses, by far the most common type of operation at 47 per cent, reported a $20.06 average.

A local report by Global Banking and Finance notes almost one-third of all millennial-led households have some kind of indoor garden.”

“Because of the wide ranges in revenue, it’s more important to analyze profitability than revenue alone,” says Agrilyst’s Mikhail Hutton. “One of the big criticisms of indoor farming is the high cost of operating facilities. This is a huge challenge for growers. In fact, only 51 per cent of respondents reported operating profitably. The average age of profitable farms was seven years and farms not yet profitable were on average five years old.”

Of course, as technology advances, efficiency increases and operating costs decrease. Technological advances growers report they are most excited about are automation, HVAC, data analytics, LEDs, and sensor technology. Interestingly, when asked what they use as production management tools most reported using Excel or simply pen and paper.

While large-scale operations are undergoing a renaissance of sorts, so, too are home growers. In 2018, millennials officially became the largest demographic and it is well-known that this eco-friendly generation not only has money to spend, but it loves its indoor growing and local food. A local report by Global Banking and Finance notes almost one-third of all millennial-led households have some kind of indoor garden.

“Born between the early 80s and 00s, this trendy crowd have discovered gardening through platforms like Pinterest and Instagram. The concept of gardening fits right into many millennials’ obsession with selfimprovement and wellness and gives their social credibility a boost,” says the report.

Advantages of indoor gardening that attract millennials include stress reduction and relaxation, a smaller carbon footprint, stretching their dollars further, improved nutrition, and social benefits. According to the World Health Organization, stress and anxiety will oust obesity as the top health issue by 2030. In response, millennials have made it a priority to surround themselves with nerve-calming activities, and gardening tops the list.

How will it all connect in 2019? As commercial growers continue improving efficiencies in an effort to realize greater revenue and profits, the technology and knowledge being invested will trickle down to end users creating a groundswell of interest and demand in urban and suburban areas for fresh, healthy, and nutritious food.