Photo by Tom O'Connor

Indoor Ag Represents Only 1% of the Greens Market Share Despite Billions of Dollars Invested. Fifth Season Aims to Change this Industry Drag, and Fast.

Fifth Season

Integrating agriculture into a controlled environment is not a new concept. It was originally invented by a Danish farm back in the 1950s. In 1999, Columbia University professor Dickson Dispommier and a group of his students created a model for a vertical farm that could theoretically feed 50,000 people.

The movement toward indoor growing is increasingly relevant — The UN predicts that by year 2050 our global population will surpass 9 billion people, and at current agricultural productivity rates, the estimate by the Vertical Farm Project is that “an agricultural area equal in size to roughly half of South America” will be needed to feed a much larger population. Reduced arable land and widespread water shortages (intensified by climate change) are also realities moving controlled environment agriculture forward. 

In many parts of the world, greenhouse growing has been the predominant production system for fresh greens, veggies, and fruits for decades. High-tech vertical farming, on the contrary, is a new-age farming model made possible by the advent of efficient LED lights, and propelled originally by the cannabis industry.

Greenhouses and vertical farms serve different roles in food system change.The umbrella terms “indoor agriculture” and “controlled environment growing” bundle all models together into one, which creates confusion and stunts progress. (Here’s a good breakdown of the different categories of indoor agriculture.) So far, indoor agriculture hasn’t “saved” our food system, but it has remimaged an important aspect of it so that it works better for all of us and for the environment.

But why is it that so much time and money has been pumped into the indoor ag industry, and yet there’s so little volume in the market to show for it? Let’s dive a little deeper.

Greenhouse Growing vs. High-tech Vertical Farming : Clearing Things Up

At Fifth Season, we refer to what we do as high-tech vertical farming set to scale, or True CEA, because we lead with software principles to run every aspect of the farm, eliminate all unknowns associated with outdoor environments (like weather, pests and water), and efficiently produce a lot of fresh food at the right cost. Our focus on a fully-integrated and automated farming system also means our farm can be replicated easily in any location, and consistently produce the same crop yield and totally clean food (don’t assume that food grown indoors must be clean) no matter where it is.

At this time, greenhouse models are able to grow a wider range of crops — for instance, we haven’t yet cracked the code on growing quality tomatoes in LED-powered vertical farms. Like vertical farms, greenhouses are able to supplement the fresh produce supply chain, and we may integrate greenhouses into the farms we build in the future.

But, greenhouses alone are not the solution. That’s because without fully integrated software and automation, the unit economics of greenhouse growing (even those with some high-tech components) can’t come close to the competitive costs created by high-tech vertical farming. At Fifth Season farm, the combination of full automation and integrated software leads to consistent quality and higher crop yields that counteract capital expenditures and make our business viable. You don’t have to take our word for it — here’s a great summary on the topic by a student at Duke’s Nicholas School of the Environment.  

Why Differentiation is Important 

To move the needle at the retail level and get 100% clean, regionally-grown food into the hands of more people (and demonstrate what fresh really tastes like) we need to funnel resources and investment into True CEA.

In the early days of indoor agriculture, farms were experimenting, and many of those experiments failed. Some of the early vertical farm models were merely facade tech demonstrations (you can’t put a GoPro on a horse and call it a Tesla) that produced flavorless greens and showpiece greenhouses with food safety problems. We saw unprofitable business models, energy inefficiency (the LED technology had not yet advanced), greens sold for up to three times the cost of soil-grown greens, and “fresh” food still trucked across the country. For these reasons, we’ve seen billions of dollars invested in indoor growing operations, yet this isn’t reflected in terms of market share. With this much time and money invested, the industry should have more to show for it. 

Today, we still face perception challenges due to lack of innovation, but on the whole the industry is course correcting. Influential investors and retail buyers understand the promise of True CEA, and we’re reigniting serious interest in the role of vertical farming for food system change. 

Why Superstack Software Runs our Bots

Our team at Fifth Season observed the industry’s early missteps and created a model that produces the highest-quality food while being economically viable. We’re using our expertise in tech to remove the mystery from something that should never be mysterious: our food. This is why we’ve built a superstack software and robotics system in house that can be replicated anywhere. Since our bots are standardized (think of them like Lego blocks), the software system recognizes them and can communicate with them, which is a long way of saying it’s turnkey for us to build new farms in any location.

How Smart Manufacturing Helps us Create Flavor

From the start we’ve wanted to use an automated system to help us produce the best-tasting greens and prepared meals, and we’re succeeding. (Here’s a bit more detail we recently shared with Forbes on this topic of using AI to produce optimal flavor.)

Right now, we offer convenient, inspired prepared salads to meet the demand for freshness on the go. We’re here to usher in a new era of fresh food and give more people access to this kind of superior quality wherever they’re shopping (from retail shelves to foodservice to e-commerce). We want more people to experience what it means to enjoy just-harvested food from a source they know. It’s spinach as spinach is supposed to taste from the Fifth Season Farm in your neck of the woods! 

Our Principles 

When we set out to create Fifth Season, we reversed the approach from the start. We lead with software principles, and instead of finding production facilities to place a farm inside of, we started by creating the tech. Our operational principles include: 

Super-stack Software for Scalability: We reduce operational costs, keep our prices down, increase space for growing, and keep food 100% clean using a patented system to both harvest and package our products. 

  • We don’t need to make room for scissor lifts, so we have an industry-leading six-to-one ratio of 2d square feet to actual growing square footage.
  • If you add up all of the individual growing trays and surface area, we have about 126,000 square feet to grow on a footprint of just 25,000 square feet. 
  • We are True CEA, and that leads to a product that’s always 100% clean. (Literally. We just received a 100% score on our SQF audit). 

Full Automation for Positive Unit Economics: Our grow and manufacturing platforms are entirely automated, which makes it best-in-class in efficiency and profitability, and therefore uniquely scalable. We can replicate our production system anywhere to get the freshest ingredients and prepared meals to more people in the communities we serve. 

  • We’re CapEx efficient — more automation leads to fewer capital expenditures. 
  • We’re the only vertical farm that has positive unit economics with just one 60K square foot facility (and we’ve done this with a fraction of the capital and lead time). 

Renewables for Efficiency: We aim to efficiently convert natural resources and energy into food, and like others we suggest that operating this way is the future of sustainable development. 

  • We use a solar-powered microgrid to charge LED lights, which lowers our carbon footprint. 

Replicability for Decentralization: Our model is built to feed regional demand for fresh food. We can replicate the same farm anywhere and deliver on the same crop yield and quality. 

  • This also helps us reduce food miles, keep costs down and deliver the ultimate in freshness to shoppers. 

Beyond Greens for Product Depth: Our farming system produces specialty greens and salads, and as we grow, we plan to create a broad portfolio of prepared mealtime products and grow other fresh food (like berries, tomatoes, and even marine proteins, like oysters).

Branded Shopper Experiences for Trust and Relevancy: We set out to tackle the tech and create a loved brand in order to relate to shoppers wherever they shop. We’re partnered with large retail chains and local grocery stores, and we’re using our online store for doorstep delivery to Pittsburgh-area fans.