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Retailers will be aware of software as a service (SaaS) – and they may have noticed the emergence of the shopping-centre-as-a-service model, described by Computer Weekly in 2019 – but what about ‘salad as a service’, the latest SaaS opportunity?
If they haven’t yet, they soon might. For food retailers, it could revolutionise supply chains, boost companies’ environmental credentials and drive new customer experiences.
The concept is related to the evolution of vertical farming, also known as controlled environment agriculture. Vertical farming allows food to be grown independently from climate conditions and other outside elements.
Typically, in aeroponic system vertical farming, plants are grown vertically, with their roots suspended, soil-free, in cylinders where they are nourished with nutrients. LED lighting is increasingly being used in the process to influence how plants grow and taste.
Although the vertical farming term was first coined over a century ago, interest and investment in it has ramped up in recent times for several core reasons, not least enhancements in technology and a renewed focus by businesses on their eco credentials.
Reflecting on a Mintel 2019 study, Mintel analyst Armando Falcao says vertical farming “can reduce wastage and preserve available resources”.
“Food wastage is a key concern of grocery shoppers, and Mintel research shows that 83% of consumers think it’s important to cut back on the amount of food that is wasted,” he adds.
Supply chain bosses at several large UK retailers are increasingly looking at how they can incorporate this technology-enabled agribusiness into their operations for the reasons Falcao suggests.
But by launching these facilities in urban areas, nearer to the end consumer, there is a chance to significantly reduce the time it takes for fresh produce to get from ‘farm’ to fork, which comes with other obvious environmental benefits.
Mini in-store ‘farms’
Marks & Spencer, Selfridges and Amazon-owned Whole Foods are among the first burst of UK retailers to bring food production even closer to customers by introducing in-store herb-growing pods, from which shoppers can pick the produce themselves.
Those three businesses are using units from urban farming company Infarm, which works with multiple food retailers across Europe. In Whole Foods’ London stores, for example, produce grown includes coriander, parsley, basil and mint.
Selfridges announced its partnership with Infarm in August, with several leafy greens grown within an in-store unit at the company’s flagship Oxford Street location in London. The first in-store harvest was in September. Prior to that, Selfridges’ customers could order directly from Infarm’s London plant hub for collection in store.
Maria Trapani, Selfridges’ food buyer, says vertical farming provides customers with “hyper-local, extremely fresh and naturally flavourful produce”.
“We are constantly looking for new and more sustainable ways to source food, and this allows us to reduce our carbon footprint, as well as being chemical-free and using 95% less water,” she says. “The range we are offering, which is exclusive to us, is proving popular with customers and we’ve had some great feedback.”
Infarm says its growing environments connect to “a central cloud-based farm-brain”, combining big data, the internet of things (IoT) and cloud analytics technology to gather tens of thousands of data points throughout a plant’s lifetime. The vertical farm provider argues its platform can “learn, adapt and improve itself constantly” to optimise plant growth.
The modular ‘farms’ provide consumers with something new to explore in store, but there is much deeper disruption vertical farming could bring to the retail supply chain.
Salad as a service?
Adam Waterman, chief software architect at LettUs Grow, a vertical farming company comprising tech experts and plant scientists, uses the phrase “salad as a service” to describe how his business can aid retailers and food industry suppliers.
Those using LettUs Grow’s vertical farming systems have the option to tap into the company’s experienced in-house experts for recommendations and improvements related to their yields, described by Waterman as “a rapid feedback loop”.
For Waterman, in-store growing units, like Infarm’s, are a “starting point” for vertical farming’s wider use in retail. He believes the discipline will become much more influential.
“I see it moving towards larger food production warehouses in the outer areas of urban centres, in industrial parks, for example, where consistently produced food in large quantities is produced for cities, taking the pressure off the land use around the city,” he says.
UK retailers are very much in the learning phase of what vertical farming could do for their businesses. Online grocer and tech provider Ocado Group has arguably taken a more significant step forward, having formed a joint venture (JV), Infinite Acres, with Priva and 80 Acres, which both operate in the vertical farming industry.
Ocado also has a majority stake in Jones Food, a vertical farm based in Scunthorpe, UK, which when combined with the 2019 JV took its overall investment in the sector to £17m.
CEO Tim Steiner says the plan is to co-locate vertical farms within or next to Ocado’s distribution centres and its rapid food delivery arm Ocado Zoom's micro-fulfilment sites, enabling fresh produce to reach customers within an hour of purchase.
Waterman, who says LettUs Grow is in talks with salad producers and major retailers in the UK about how they might want to use vertical farming, adds: “It’s got the potential to have quite a large impact on the overall food supply chain.”
The main selling points, he says, are consistency and reliability of production, and year-round output that is not affected by weather or seasonality.
LettUs Grow’s vertical farm systems operate on a minimum scale of 24m2. They often cover a container-sized footprint, although the company also builds facilities inside buildings.
Software developed in-house controls, monitors and manages the farm, taking care of lighting, irrigation, fertigation and the overall environment such as air temperature and humidity to help plants grow. Users can develop a “growth plan for a crop, and projected yield”, notes Waterman.
Although the main focus of production via vertical farming is currently on leafy vegetables and herbs, the variety of crops that can be grown successfully in this manner continues to broaden.
A vertical farming structure in Wyoming in the US, called Vertical Harvest, for example, has operated with a capacity to produce more than 20 tonnes of tomatoes per year since 2015.
“Expanding vertical farming into a wider variety of produce is completely feasible,” Falcao says.
Beth Eldridge, a plant scientist at the University of Bristol, who specialises in soil erosion, heralds the lack of pesticide used in most vertical farms, but she says “so much fundamental plant science is required” to understand this approach’s impact on crops.
“What’s interesting is how we might automate the systems to get feedback on plant growth and energy input,” she says. “Are there clever ways we can measure plant growth indicators, and can computers sense this and feed it back into the system to adjust conditions accordingly?”
She predicts vertical farming will be one part of the supply chain, supplementing already-in-use huge greenhouses and traditional farms.
“I see a niche for it in leafy greens and herbs because there is so much wastage in the transportation of those types of vegetables that I can see a real benefit of having them in the store, picking them fresh and increasing longevity.”
Eldridge also says there is an opportunity for retailers to connect people with the food they purchase by using the smaller in-store units.
Beth Eldridge, University of Bristol
“People can become very disconnected on where the food comes from when they buy in packets, but when you go in store and pick it yourself, you become a lot more engaged in where the food is coming from.”
Trapani suggests there will be multiple uses for the units in Selfridges’ stores, adding: “For now, we are selling from the stacks in the food hall, but the longer-term plan is to also use the salads within our restaurants.”
Vertical farming technology continues to evolve. LettUs Grow, specifically, is aiming to create a general control system, where the software can help predict yields and improve reporting of food provenance information.
“Having effective traceability is an industry must, and we plan to build out in that direction,” Waterman says.
A report from market research group IDTechEx, published this year, acknowledges vertical farming has caught the imagination of entrepreneurs and investors alike. It forecasts the market value to rise from $709m now to $1.5bn by 2030, but highlights potential obstacles to growth, such as electricity costs for lighting.
Michael Dent, analyst at IDTechEx, says: “Rather than focusing on mass-produced, wholesale crops, where vertical farms will always struggle to compete on price with traditional farms and greenhouses, it may make more sense for vertical farm operators to focus on high-value crops that command a price premium, perhaps within niche markets or specialised applications. The debate over the best size for a vertical farm is still ongoing.”
Brexit and any potential disruption in the transportation of goods at the UK border may further influence British companies to invest in vertical farming as part of local sourcing strategies. One thing seems certain, though – food retailers will continue to assess their options as this new technology-enabled agriculture market establishes itself in the UK.