CEA: Where horticulture and technology meet

Added on 03 May 2022

Tags

CEA: Where horticulture and technology meet

Controlled-environment agriculture (CEA) means different things to different people. It's a wide umbrella that covers hoop houses and wind tunnels with low technology, greenhouses with medium technology, and vertical farms (e.g., hydroponics, aquaponics, etc.) and other types of indoor growing with high technology and full control. For investors, it's the shiny new toy in agriculture. To others, it is a panacea for the future of food security and the presumptive upstart disruptor that will reinvent the food system. But this burgeoning market is maturing and with that comes the inevitable growing pains that will define its future and determine whether it can deliver on all its promise.

"In my opinion, we're at the end of the beginning," says Robert Colangelo, founding farmer and CEO of Green Sense Farms Holdings, which provides horticultural consulting and turn-key CEA solutions by designing and building vertical farms, greenhouses, and integrated facilities. "The market is no longer brand new; it's established and has critical mass. There are enough players now to weather the ebb and flow of the marketplace."

CEA promises to be part of the solution to sustaining a growing world population coping with challenges exacerbated by climate change, water scarcity, and supply chain disruptions. The current food supply chain system begs for an overhaul that concentrates on improving food safety and quality and creating greater resiliency at all levels. With environmental issues escalating, the entire food production industry also needs to be more cognizant of conserving natural resources and reducing its carbon footprint.

With urbanization and limited arable land, outdoor food production is unlikely on its own to meet the food requirements of future generations. Indoor growing is here to stay and a critical part of the future. Investors are banking on it.

Venture Capital: A Blessing or a Curse?

KD Market Insights reported that globally, the CEA market is projected to grow from more than $74 billion in 2020 to an estimated more than $172 billion in 2025. A flood of investment money is propelling expansion and opportunities in the U.S. CEA market. S2G Ventures predicted in its 2020 "Growing Beyond the Hype: Controlled-Environment Agriculture" report that the U.S. CEA market will grow five times in U.S. market share over the next 10 years and "this is likely to start with leafy greens where indoor agriculture could become 10% plus of sourced product by 2025. More broadly, there is a clear path for U.S. indoor to grow to $1 billion in leafy greens alone by 2025."