cit_97817_2022-harvest-report_r4-digital_prod

2022 SPECIALTY CROP AUTOMATION REPORT

organic produce and more flavorful fresh vegetables and fruits. Furthermore, regions with lack of arable land and limited available water, such as the Middle East, that typically import most fresh produce could present interesting use cases for CEA growing structures. Moreover, demand from food services for differentiated products, such as produce with a specific flavor profile or growing requirement, is another expanding market that can be readily serviced by CEA, as illustrated in the following example. “ A large U.S. food concept uses a lot of cilantro for its food services and demands this fresh cut herb to be pesticide free. That is almost impossible to achieve in traditional farming and that is a great use case for CEA. Furthermore, the company is willing to pay a price premium for it.“ – Josh Ruiz, a 20 year industry veteran with experience at Church Brothers and Tanimura & Antle Predictable growing conditions Increasingly challenging growing conditions, such as longer periods of droughts and unpredictable rainfall, have an impact on open-field farming. Though most large growers have been able to manage this through operational knowhow and access to large acreage, this is still an important challenge for quality, yield and future food security of fresh produce. Along with climate effects, exposure to an uncontrolled environment also exposes outdoor growers to risks, such as soil pathogens. Most recently, lettuce growers in California’s Salinas Valley were exposed to Impatiens Necrotic Spot Virus (INSV) leading to loss in yield by as much as 50 percent, in turn having a direct effect on lettuce market prices. 15

on and exposure to external climate factors. This enables them to grow produce and maintain supply all-year round irrespective of the climate conditions. Less reliance on manual labor Labor shortage has been identified as amongst the most important challenges faced by growers. With a steadily increasing average farmworker age – the average age of the hired farm laborers has increased from 36 in 2007 to 42 in 2017 16 – this challenge seems likely to only continue in the future. Automating key growing processes in the farm can help alleviate this problem. Since both greenhouses and vertical farms are protected from the external environment and can control how things are moved and designed within their space, there is an increased opportunity to automate the plant-harvest-package processes. For example, AppHarvest, a greenhouse start-up, has opened a farm that has fully autonomous harvest for its leafy greens. 17 Observing such trends, there is increasing activity by large retailers, such as Walmart, Kroger and Albertsons, to partner with CEA start-ups to bring fresh produce to their stores and maintain all-year availability. The presence of such players does provide credibility to the optimism around vertical farm and greenhouse start-ups. However, one must realize this projected growth will be easier said than done as some key challenges present themselves in front of CEA start-ups. Nascent industry and technology Though traditional greenhouses have been around for many decades, vertical farms and emerging greenhouses are relatively new, with most of them less than 10 years old. This indicates that vertical farm and greenhouse start-ups are still establishing relationships

Modern vertical farms and greenhouses have complete control over climate, thereby eliminating dependency

15 Prices spike with low Central Valley lettuce supplies | Freshfruitportal.com, October 2022 16 America’s farmworkers aging, not being replaced | UPI.com, May 2019 17 Press release | Appharvest.com, October 2022

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