Ocado could become the first major retailer in the UK to deliver fruit and vegetable to customers within hours of it being picked, after it announced it is investing £17m in vertical farming.
This is the first time the online business has moved into food production, the aim being to grow fresh produce within or alongside its robot distribution centres.
To aid this goal, it has bought a 58% stake in Scunthorpe-based Jones Food. This vertical farm business runs a warehouse that grows 420 tonnes of basil, parsley and coriander a year, stacked in trays 17 storeys high under 7.5 miles of LED lights and across 16,000 feet. Moving forward, it plans to expand its crop types and production across the UK.
There are clear sustainability advantages of vertical farming, according to Ocado, including low wastage, very low water use, minimal land use, plus the bonus of predictable yields of high-quality produce.
From a consumer perspective, vertical farming offers tastier and fresher products all year round, picked when ripe, grown without pesticides or fungicides, and virtually untouched by human hands, it added.
How does it work?
Jones Food grows produce hydroponically – meaning no soil is need – using recycled water. Its farming avoids pesticides and is powered by renewable energy like wind turbines and solar panels, while the air is filtered to ensure no insects can enter the warehouse.
Machinery automatically harvests the produce when it is ready and human contact is limited – if anyone enters they must wear full protective clothing and step through an air shower to blow off dust. This clean room style of operation could also see it branch out into cosmetic and pharmaceutical grade crops, according to Ocado.
Currently, Jones Food supplies to businesses such as sandwich maker Greencore.
A facility could be built within the year for Ocado, leveraging the digital retailer’s expertise in robotics and AI to make things more efficient. M&S customers could also benefit from the deal when its distribution partnership kicks in with Ocado in 2020.
Ocado estimates 10 more similar farms could be opened within five years.
Ripe for the picking
Tim Steiner, CEO of Ocado, wants to see produce delivered to customers kitchens within an hour of it being picked.
“We believe that our investments today in vertical farming will allow us to address fundamental consumer concerns on freshness and sustainability and build on new technologies that will revolutionise the way customers access fresh produce,” he said.
Aside from its Jones Food investment, the online grocer has also embarked on a joint venture with 80 Acres, a US vertical farm business, and Priva, a Dutch operation that provides climate control and process automation technology. Together, the trio are working to develop off-the-shelf vertical farming systems that can be sold to other retailers.
The partnership will provide everything from unique crop recipes to facility management, with yield guarantees, product packaging and branding.
A trend creeping over
Overseas, vertical farms are already flourishing. German group Infarm has launched them in retailers across Europe, including in Metro, Edeka, Migros, Casino, Auchan and Intermarche.
It has just secured £100m in investment to develop urban farming for restaurants and scale growth across European retail, including the UK. Infarm hopes to launch in Britain in September with some of the “country’s largest online and brick and mortar supermarkets.”
The company is also in advanced discussions with retailers in the US and Japan.
Over in the US, Aerofarm has the world’s largest indoor vertical farm. Its nine facilities supply chefs like David Chang, founder of Momofuku, Leo Marino, executive chef at Red Rooster, and Anthony Moraes, formerly at Eleven Madison Park and now Facebook.
UK vertical farms
- Bristol start-up Lettus Grow, which has won funding from Innovate UK
- Growing Underground is located under Clapham and supplies kitchens with micro greens and salad leaves within four hours of being picked
- Yeeld, started by an ex-city trader, grows and delivers microgreens within London
- GrowUp Urban Farms ran a commercial prototype firm in London which included leafy greens and vertical aquaponics, though it is currently relocating