However, certain market drivers provide a positive outlook for CEA as it offers the possibility to provide consistent, local and high-quality produce. Drivers are primarily the growing trends towards consumer preference for flavorful fresh produce, retailers’ desire to increase produce shelf life and minimize food waste and challenges related to scarcity of resources such as land, water and labor. This trust is echoed by the increased collaboration between CEA start-ups and traditional growers, both open-field and greenhouses, as well as with large retailers. As the CEA market dynamically evolves towards multiple possibilities, many open questions remain: Will the CEA start-ups be limited to a niche, premium segment of the U.S. market? Will there be increasing acquisitions or consolidation amongst various players – start-ups themselves, private equity, growers and even retailers? Will advanced technology, new breeding varieties and data analytics lead to newer business models and product offerings to change the competitive playing field?
How these questions play out will be seen in years to come. One thing, however, is certain: the size of the U.S. market provides space for the coexistence of multiple players. The fresh produce market served by traditional in-field growers cannot be easily replaced and will remain the dominant supply channel for U.S. fresh produce in the foreseeable future. In the short- to mid-term, CEA players could take a complementary role focusing on providing a select number of crops, as well as customized produce to niche and premium market segments. With possibilities of new business models and product offerings, traditional growers would benefit to closely monitor the market and consider investments as a means to diversify revenue streams and hedge against the prominent risks they face. In the end, CEA provides solutions to some of their top challenges – labor availability, unpredictability of weather and water scarcity – as well as an ability to charge a premium.
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