Ocado ups stake in vertical farming
‘People do want fresh products, are looking to live healthier lives, and buy more products locally when they can’
OCADO has increased its stake in Scunthorpe-based Jones Food Company, Europe’s largest vertical farm, as coronavirus fuels interest in food grown indoors.
The online grocer now owns about 70pc of the startup after it became its largest shareholder, with a 58pc stake, in November.
Founder James LloydJones, who set up the firm three years ago, told The
Daily Telegraph that three more sites will go live by the end of next year.
Tim Steiner, Ocado’s cofounder and chief executive, has said that he wants Ocado to have vertical farms next to its grocery depots to offer fresh produce that could be delivered to shoppers an hour after being picked.
Ocado does not sell any vegetables from Jones Food on its website yet, but insiders said it was an option should it wish to.
Coronavirus has pushed companies to look at incorporating vertical farming into their supply chain to make it more reliable. Last month the environment, food and rural affairs committee warned a disorderly Brexit could be an even bigger threat than coronavirus for the supply chain.
James Lloyd-Jones’s idea of world domination is something of an anticlimax. “My goal is to make vertical farming boring,” he says. The 34-year-old set up his own firm, Jones Food Company, three years ago to grow fresh herbs, radishes and leafy salads indoors. His warehouse, the size of 26 tennis courts, is in the Lincolnshire town of Scunthorpe, and is Europe’s largest, he claims.
He wants giant indoor farms to be ubiquitous and for vertical farming to be a permanent fixture of the food supply chain. They allow plants to be stacked closely together in a tightlycontrolled environment, using LED light to fuel growth all year round.
Lloyd-Jones might be onto something. The industry is expected to exceed $20bn (£15.3bn) in sales over the next six years. After Brexit put food security under the spotlight, now coronavirus is boosting the interest in vertical farming. There were few such businesses as recently as 2010; now more than 2.3 million square feet of indoor farms exist in the world.
“There are opportunities everywhere as both retailers and the suppliers think about their supply chains, which are complex and have been disrupted,” says Jeremy Byfleet, who runs Infarm’s UK business.
His employer, a Berlin-based company, has recently helped Marks & Spencer and Selfridges to install mini-units to grow fresh herbs and salads in-store. Infarm sends in a dedicated person twice a week to harvest the plants, sold by the retailers, and sow new seeds, which come from a hub in London. Infarm also works with discounter Aldi in Germany. It rustled up $100m from investors last year to expand the business more quickly.
“It all plays into the fact that while we have a pandemic and there are second waves in different countries, people do want fresh products, are looking to live healthier lives, and buy more products locally when they can,” Byfleet says.
The proponents of vertical farming argue their businesses are a boon for the environment. They typically use significantly less water, no pesticides and fungicides, and say there is little food waste compared with traditional agriculture. Technology allows them to control their sites remotely and most tasks are automated. LloydJones’s company has only 20 staff, which keeps the day-to-day running costs relatively low, although he plans to hire a further 70 as three more farms go live next year. Industry critics
Indoor farms allow plants to be closely stacked together, and use LED light to fuel growth all year round