Is The Greenhouse Sector Growing Too Fast?

Three significant USD 100M+ fundraising rounds from Pure Harvest Smart Farm, Little Leaf Farms, and Gotham Greens have occurred in 2022. Mega-project flourished such as the 15-acre Berea, Kentucky, indoor farm, AppHarvest finished calibrating its “touchless growing system” for salad greens. The hands-off method contributes to increased efficiency and food safety. Finally, in terms of Mergers and Acquisitions, we’ve seen Local Bounti acquiring Pete’s leading to The Byron, Georgia-based Local Bounti Corporation announcing the opening of its brand-new, cutting-edge controlled environment agriculture plant. By acquiring Hollandia Produce, Local Bounti has become one of the largest CEA businesses in the US. Three greenhouse growing facilities are used by Pete’s, two of which are already in use and one of which is being constructed in Georgia. The company has been in operation for more than 50 years, and for the past 25 years, it has focused on leafy greens

Nonetheless, the current economic conditions put a spotlight on several challenges that the sector needs to overcome as highlighted by Corenthin (Félix) Chassouant, agronomist (MSc) and greenhouse specialist:

“The situation looks ‘better’ in North America but prices vary and Northern regions of the United States hit by recent cold weather have had their energy bills increase. I believe that the horticulture (flowers) and leafy-green growers (requiring less heat) will be able to reduce their energy consumption and that overall, the US growers may be more resilient to cope with inflation rates but not all crop growers will have the same resilience (Especially cannabis & hemp growers requiring extensive energy to control the environments) and moreover, questions remain as to whether consumers will be able to cope with the current prices” comments Corenthin Chassouant, Export Sales Director at HARNOIS Greenhouses.

Certain processes are contributing to the high operational expenditure of certain technologies as highlighted by Dan Cloutier:

“Dehumidification/cooling are the biggest costs for all plant factories and greenhouses in hot climates but there are options to create competitive cost advantages. Essentially air management techniques enable us to cool a 1/10th of an acre greenhouse or any building using about 2kWh of electricity to operate a water pump. But we can go well beyond this and use concentrated solar to generate hot water or steam and then we can use the heat to create chilled water using technologies first deployed in the early 1900s and available from various large MNCs. There is a wealth of passive energy techniques that can be used in order to reduce energy consumption.” comments Dan Cloutier, President of ARKLtd.net

In addition, the labour issues continue to pressure growers as some cannot work at full capacity as a result.

“We have an unprecedented shortage in grower expertise. As companies continue to expand, it’s increasingly difficult to staff facilities hence the increasing use of technology to fill the gap” comments Allison Kopf, Chief Growth Officer at IUNU

Image provided by ARK Ltd