January 28, 2023

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Big companies are looking at indoor growth in the US

Big companies are looking at indoor growth in the US

“In recent years, many large companies, such as Google and Walmart, have entered controlled organic agriculture (CEA). The main entry routes into the industry are as a manufacturer, product buyer, technology entrepreneur or investor. Business participation. Leaders are important because they have the skills and capital to move the industry forward. In our conversations with large companies, we found many reasons to approach the indoor growing industry,” writes Janesha Anthony, Communications and Branding Manager at US-based Contain. Consultancy for CEA Department.

“Product buyers’ main focus is improving the customer experience. Being active in a business like interior development allows them to differentiate themselves, build rapport and create long-term benefits for consumers.”

“The driving factor really focuses on providing added value to the consumer. CEA has demonstrated a distinct value for food quality and shelf life, product innovation and environmental, social and governance (ESG) criteria. “Organic”, year-round availability of quality products and waste reduction are important problems,” says a representative of a multinational company.


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For others, the CEA’s attractiveness in meeting sustainability or ESG objectives, especially thanks to careful use of water and saving food miles. For example, in a recent announcement of a partnership with Michigan’s Revolution Farms, supermarket chain Meijer said it wanted to offer local produce.

As many countries face economic problems, investment firms and multinational asset managers are turning to defensive sectors, sectors that have traditionally performed well in recessions. According to Janesha, gardening is one of them because consumers will naturally prioritize food over consumer goods or travel during tough times. Rising food prices have accelerated this trend and vertical farming is the fastest growing sub-sector in the horticulture industry.

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According to market research firm Statista, the value of the global indoor growing technology market is expected to reach approximately €11.29 billion by 2024. This is almost €6 billion more than in 2019, when the market value was €5.56 billion. As the industry matures — lighting supplier Fluence, for example, had sales of €132 million in the three quarters to 2021 — investors see the industry as less risky.

Opportunities are coming
With more supermarket chains and major players showing interest in the CEA sector, this scenario presents a great opportunity for strategic partnerships with farmers to provide consumer access to products from CEA. Adding FSG, an installer of lighting solutions and electrical installations, to Contain’s supplier list is a great example of how key players are interested in delivering long-term and impactful value to the industry.

“Since 1982, FSG has been built on the principle that hard work, excellence and continuous learning will always produce a positive outcome for all involved,” said Chris Hinshaw, FSG’s director of horticulture. “Currently, more than 23.5 million people in the U.S. live in food deserts, and two-thirds of the food in the U.S. is imported. With our 40 years of expertise, we want to work together with our partners and customers to make an immediate difference. Are you? An indoor grower, then you’ll find a partner with us.” , he will be committed to growing together.”

For others, working with startups in the vertical farm sector provides a way to access innovation that is difficult to create quickly at larger companies. The effort is not without challenges. Entering the industry can mean a large capital investment, which is difficult for a business unit to justify because managers keep a close eye on budgets.

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To date, there has been a limited list of successful entries, although this is beginning to change. New entrants can rely on increasingly available data and the successes of pioneers in the field have not gone unnoticed. “In our next report ‘How to achieve results in indoor cultivation?’ We talk about a topic we intend to explore further: next-gen models for entering the CEA field.”

For more information:
Container
www.contain.ag