Vertical farming

Vertical farming

Harry Phipps, Senior Executive, Lead Advisory
Vertical farming

As the world's population continues to grow and urbanisation continues to spread, traditional farming practices are becoming increasingly unsustainable. This has led to the rise of alternative agricultural methods, such as vertical farming, which has gained significant attention in recent years.

Vertical farming involves the cultivation of crops in vertically stacked layers, using artificial lighting and controlled environments. This approach offers a range of benefits over traditional farming methods, including increased crop yields, reduced water usage, and a decreased reliance on pesticides.

We will explore the concept of vertical farming in greater detail and discuss some of the benefits and challenges associated with this approach.

The rise of vertical farming

Vertical farming has gained significant attention in recent years as a potential solution to some of the challenges facing traditional agriculture. By growing crops in vertically stacked layers, vertical farming can increase crop yields per square foot of space and reduce the need for land, water, and other resources.

In addition, vertical farming can help address some of the challenges associated with traditional farming, such as weather-related crop failures, pesticide use, and soil depletion.

Benefits of vertical farming

There are numerous benefits associated with vertical farming, including:

  • Increased crop yields: vertical farming can produce higher crop yields per square foot of space compared to traditional farming methods. This is because crops can be grown in vertically stacked layers, with each layer receiving optimal levels of light, water, and nutrients.
  • Reduced water usage: vertical farming uses significantly less water compared to traditional farming methods, as water can be recycled and reused in the closed-loop systems used in vertical farms.
  • Decreased reliance on pesticides: vertical farming can reduce the need for pesticides and herbicides, as the controlled environments used in vertical farms help to prevent pest infestations and disease outbreaks.
  • Year-round production: vertical farms can produce crops year-round, regardless of weather conditions or seasonal changes. This can help to ensure a consistent supply of fresh produce, even in regions with harsh climates.

Challenges of vertical farming

While vertical farming offers many benefits, there are also several challenges associated with this approach. These include:

  • High initial investment: vertical farming requires significant initial investment in infrastructure, including lighting, climate control systems, and vertical growing structures.
  • Energy consumption: vertical farming relies heavily on artificial lighting and climate control systems, which can be energy-intensive and drive up operating costs. Technological development will likely result in more efficient lighting to reduce the energy required for this farming method.
  • Technical expertise: vertical farming requires specialised technical expertise to operate and maintain the systems and equipment used in these facilities.
  • Limited crop variety: the controlled environments used in vertical farming can limit the range of crops that can be grown, particularly those that require natural pollination or have specific environmental needs.

UK vertical farming

Several vertical farming operations have been established in the UK, providing valuable insights into the benefits and challenges associated with this approach. Here are a few examples:

  • Growing Underground: located in Clapham, South London, Growing Underground is a hydroponic farm that uses abandoned World War II tunnels to grow microgreens and salad greens. The farm utilizes a closed-loop system that recycles water and nutrients, reducing water usage by up to 70%. Growing Underground's crops are also grown without pesticides or herbicides, providing a high-quality, sustainable source of fresh produce.

  • Intelligent Growth Solutions: based in Edinburgh, Intelligent Growth Solutions (IGS) is a technology company that has developed a vertical farming system that uses patented energy-efficient LED lighting and a unique modular design. The system can be scaled up or down depending on the needs of the customer and can grow a wide range of crops, including herbs, fruits, and vegetables. IGS's vertical farming technology is also capable of capturing data on crop growth and environmental conditions, enabling farmers to optimize their growing operations and maximize yields.

  • Vertical Future: located in West London, Vertical Future is a vertical farming company that uses a combination of hydroponics, aeroponics, and artificial intelligence to grow a range of crops, including lettuce, kale, and microgreens. The company's vertical farming systems are housed in shipping containers, making them highly portable and flexible. Vertical Future also uses a closed-loop system that recycles water and nutrients, reducing water usage by up to 90%.

  • Jones Food Company: based in Lincolnshire, the Jones Food Company operates one of Europe's largest vertical farms, covering an area of 5,000 square meters. The farm grows a range of crops, including herbs, leafy greens, and strawberries, using hydroponic systems and LED lighting. The farm's crops are grown without pesticides, herbicides, or fungicides, and are harvested year-round, providing a reliable source of fresh produce.

The positive impact of vertical farming makes it a viable investment even for the most ESG-conscious of investment vehicles. Transactions within the vertical farming space are increasing; some of the recent UK deals are outlined below:

  • Gresham House is a financial backer of Fischer Farms, who built the largest vertical farm in the world in Norfolk in 2022 and is planning to scale further in the coming years.

  • Vertical Future, mentioned above, secured £21 million of funding through a Series A in early 2022. This was financed by a range of investors, illustrating the attractiveness of this sector to HNW and UHNW family offices and investors looking for diversified portfolios and positive environmental impact.

  • Harvest London has received backing from Investment Manager Foresight Group, through which they have secured a 140,000 square feet unit in Beddington, South London.

These UK case studies highlight the potential of vertical farming to provide a sustainable source of fresh produce in a sustainable and environmentally friendly manner. However, there are still challenges to be addressed, such as the high initial investment costs and the need for specialised technical expertise in operating and maintaining vertical farming systems. Despite these challenges, the benefits of vertical farming make it an attractive option for the future of agriculture and for medium to long term investors.

Man and woman in meeting


Vertical farming is a promising approach to sustainable agriculture that offers numerous benefits over traditional farming methods. While there are challenges associated with this approach, the potential benefits make vertical farming an attractive option for the future of agriculture. As technology continues to improve and costs decrease, it is likely that vertical farming will play an increasingly important role in feeding the world's growing population.

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Darren Rigden
Darren Rigden
Partner, Audit and Business Solutions