The appointment of administrators at Jones Food Company last week was “inevitable”, a growers’ group has told The Grocer
The Lydney, Gloucestershire-based business was placed into administration on 7 April, with 61 staff made redundant.
Administrators Damian Webb and Stephanie Sutton at RSM UK have been appointed to manage the business. A core team of 11 staff have remained to support administrators in maintaining the site and assisting interested parties.
However, one growers’ group said this collapse was “inevitable” due to fundamental challenges with the vertical farming business model making it hard for companies to make a profit.
“The elephant in the room is that they’ve never been able to make a profit,” said Lee Stiles, secretary of the Lea Valley Growers Association.
“Vertical farms are funded by venture capital and hedge funds and pension funds and all alternative lenders to traditional agricultural lenders so they great at raising the money and building the facilities, but when it actually comes to making a profit, they all fall down eventually,” he added.
“It’s just a matter of time.”
This, he argues, is because founders are “fixated with the technology but the commercial aspect is always a secondary factor”.
Stiles added that it was “sad” as the people behind vertical farming businesses had a “lot of energy and a lot of dedication but it’s not on the growing side, it’s on the technology side and what you can do with it, rather than whether you can actually make it pay”.
He acknowledged that vertical farming does work in other parts of the world like the Middle East, where the hotter climate makes growing field crops in traditional methods more challenging.
However, in the UK, vertical farm-produced veg lines “cannot compete on price with overseas imports” and regardless of the production method’s sustainability credentials “supermarkets are about price at the end of the day”, he said.
Jones Food Company opened its first vertical farm, JFC1, in Lincolnshire in 2018 and a dedicated Innovation centre in Bristol in 2022. It then opened its “most advanced” vertical farm in February last year, the JFC2 in Gloucestershire.
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.
The company claimed at the time that the facility was the most advanced vertical farm in the world.
“The company has built a state-of-the-art vertical farming facility with a highly skilled workforce,” said Webb. “There is a great opportunity for a purchaser to build on the investment to date to take the business forward. Further information for interested parties is available upon request.”
“UK horticulture is under pressure from rising costs, falling confidence and a challenging marketplace,” said NFU horticulture and potatoes board chair Martin Emmett. “Our revised horticulture strategy outlines the key government and supply chain policies needed to unlock the sector’s potential, while driving the growth the government is aiming for and strengthening the UK’s food security.”
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