"Vertical Farming": Technology for Innovative Food Production

The Ukraine war has highlighted a weak point in the global food system: The high dependency on large agricultural production and export countries and their ongoing ability to deliver. “In order to be able to continue to feed a growing world population in the face of worsening climatic conditions and geopolitical uncertainties, more investments must be made in technologies that enable resource-saving food production. New approaches such as vertical farming will play an important role in the future," says Dr. Heinz-Werner Rapp, founder and head of the FERI Cognitive Finance Institute, on the occasion of a new analysis on the topic of vertical farming.

Innovative processes for food production

Vertical farming is a special form of urban agriculture that enables highly automated production of essential food indoors under controlled environmental conditions all year round. In addition to useful and food plants, fungi or animal protein sources such as shrimps can also be integrated into vertical farming systems. With the help of artificial intelligence and robotics, rearing can be optimized, with light, water and other resources being continuously supplied as needed. Vertical farming offers a variety of ecological advantages and also enables resource-saving food production close to the end consumer. Vertical farming is particularly attractive for areas with rapid population growth, small areas under cultivation, high purchasing power and strong urbanization, such as Singapore at the moment.

Attractive future potential of controlled food production

The long-term competitiveness of production costs compared to traditional agriculture is decisive for the future of vertical farm-based food production. Rising energy and transport costs, growing climate risks and the increasing scarcity of good agricultural land are factors that make vertical farming concepts increasingly attractive. Fully automatically controlled indoor farms could not replace classic arable farming, but they could represent a useful and future-oriented addition. According to forecasts, the vertical farming industry will develop very dynamically in the coming years: a fivefold increase in market volume from USD 4.16 billion in 2022 to USD 20.91 billion in 2029 is expected the development of critical company sizes will be decisive in the future. Starting with small companies and start-ups, we can therefore expect increased consolidation on the market,” says Julia Bahlmann, author of the analysis. "This special dynamic and the enormous future potential - also within the framework of the superordinate megatrend "Alternative Food" - will open up attractive investment opportunities for strategic investors, especially in the private markets area," explains Rapp.

The publication "Vertical Farming - Technologische Innovation zur Umgestaltung des globalen Ernährungssystems" has been published by the FERI Cognitive Finance Institute as "Cognitive Comment" and is available in German in the download area of ​​this page.