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’

The Daily Telegraph - Business - - Front Page - By Laura Onita

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

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