In a shock move, vertical farming leader Jones Food Company appointed administrators last week. At least, it was a shock to outsiders.

After all, the collapse comes just over a year after JFC announced the launch of the “world’s biggest” and “most advanced” vertical farm, the JFC2 in Gloucestershire.

But it was not a complete surprise to industry insiders, who believe the demise was “inevitable”.

JFC2 used 100% renewably sourced energy to grow crops vertically, including basil, coriander, flat-leaf parsley, dill, green lettuce, red lettuce, baby leaf pak choi, bulls blood, mizuna, komatsuna and baby leaf cress. That came at a significant cost.

When the company broke ground on the project, it expected to need £20m in investment. It had to achieve the same amount in returns just to keep the lights on.

Now the lights are off, the notion of £20m in returns seems a tad optimistic – especially at a time of rising production costs and price pressure from retailers.

Low margins

That situation was summed up by former Defra secretary George Eustice. The “very sad” collapse of JFC probably “reflects some of the low margins in the fresh produce sector generally, which can make the capital investment difficult to justify”, he told The Grocer.

That’s especially true in vertical farming, suggests Lee Stiles, secretary of the Lea Valley Growers Association. In the UK, vertical farm-produced veg lines “cannot compete on price with overseas imports”, he says. And regardless of their sustainability credentials, “supermarkets are about price at the end of the day”.

That difficulty is illustrated by the likes of Future Crops, Aerofarms, Agricool and Upward Farms ceasing production in recent years. Last month, US-based farm Plenty filed for bankruptcy – despite having backing from Amazon.

Salad days all year round?

There are other challenges for vertical farming beyond the price of its produce. One of its core selling points is the ability to grow salad leaves and the like all year round, which bolsters national food security. At a time of such international upheaval, that’s a clear positive, but there is also a demand equation.

Ultimately, UK consumers won’t want to eat salad leaves – the main product of vertical farming – in the same quantities in the winter months.

As Stiles says, “you are going to suffer from a lack of orders at certain times of year”. Given that salad leaves are some of the most wasted food items, “supermarkets are not going to overstock”.

Future potential

Granted, it may be possible to grow far more than salad leaves through vertical farming in future. To do so requires investment, which is tricky at a time when budgets are tight and inflation is still an issue.

So it is understandable that vertical farming – still a relatively new technology – is struggling at this time. But it’s important to see the collapse of JFC as just that: a tricky time for the sector. That doesn’t mean vertical farming won’t prove a useful and thriving industry in the future.

So rather than a death knell for an entire business model, this sad demise should rathe be seen as a sign of a tricky economic landscape. The reality is, we are yet to experience the full potential of what vertical farming can do.

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