Ocado invests in “vertical farming”
Online grocery retailer Ocado has announced new investment that it says will make it a leader in the newly emerging vertical farming industry, through which crops are grown indoors on multi-storey structures, saving on space, energy and a range of other benefits.
11 June 2019
While the competition in online grocery shopping slowly builds, as it has done in recent years, the major brands continue to diversify and invest in order to improve their central product. Online supermarket retailer Ocado has announced two “complementary investments” that is says will enable it to become a leader in the newly-emerging vertical farming industry.
Vertical farming involves the production of food in indoor facilities where crops are grown on a series of levels in a precisely-controlled environment.Vertical farming provides clear sustainability advantages, including low waste, low water use, greatly reduced land use and zero pesticides – all of which contribute to a much larger yield. From a consumer’s perspective, vertical farming products all year round that are “picked when ripe, grown without pesticides or fungicides, and virtually untouched by human hands.”
Another benefit is that crops can be grown en masse in locations much closer to the end user. Ocado says that with its investments, it envisages a day where “customers’ vegetables are placed much closer to customers, potentially co-located next to partner fulfilment centres.”
To this end, Ocado has signed a memorandum of understanding to create a strategic three-way joint venture with 80 Acres Farms Inc. (“80 Acres”) and Priva Holding BV (“Priva”), each a leading participant in the vertical farming industry. The venture will be called Infinite Acres.
Meanwhile, Ocado has also completed the acquisition of a 58% stake in Jones Food Company (“JFC”), Europe’s largest operating vertical farm, based in Scunthorpe. Together, Ocado’s investments in JFC and Infinite Acres will total £17m.
Tim Steiner, Ocado’s CEO, said that the investment will address consumer concerns on freshness and sustainability. “Our hope ultimately is to co-locate vertical farms within or next to our CFCs and Ocado Zoom’s microfulfilment centres,” said Steiner, “so that we can offer the very freshest and most sustainable produce that can be delivered to a customer’s kitchen within an hour of it being picked.”