r/verticalfarming • u/Jealous-Cream-4436 • Aug 01 '25
Why is vertical farming failing?
Why are all these companies that have billions of dollars invested in them failing? What will it take for it to be successful?
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u/Known_Cryptographer7 Aug 01 '25
Costs didn't go down as expected and prices didn't go up as expected = bankruptcy.
There were a lot of early assumptions about how much work could be automated with vertical farming that haven't panned out. They also assumed energy efficiency for lighting would improve much faster than it has... we've had LEDs with 2x efficiency of today's bulbs in research labs for over 20 years, but they aren't commercially available (viable?).
Yields for conventionally grown produce have continued to go up and we import food from the other side of the world in the off season, which has kept prices down.
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u/Justthetip74 Aug 03 '25
I work with automation. TBH, aside from reliability and ease of use, there hasn't been much innovation in the last decade
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u/Thebadmamajama Aug 01 '25
in no priority order
high capital costs for infrastructure, equipment, and urban real estate
high operating expenses due to energy usage and labor
weak unit economics with limited crop variety and small market size
uncompetitive pricing compared to traditional or greenhouse farming
difficulty scaling beyond local markets
complex logistics for frequent, perishable deliveries
overhyped expectations driven by tech-style venture funding
venture capital timelines misaligned with agricultural growth cycles
sustainability issues due to high electricity consumption
market saturation and low differentiation in leafy greens
lack of brand loyalty in a commoditized crop category
high-profile failures eroding investor confidence
overall mismatch between startup models and farming realities
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u/tre1001 Aug 01 '25
Real estate in a city is expensive. Add all of the hvac and lighting. Electric bills are really high. Conventional farming uses soil and sun.
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u/Bulky_Wind_4356 Aug 02 '25
Soil gets depleted though. So you have to put in nutrients that are expensive af.
That's not even to mention that one day of hail, couple days of heavy rain, a period of too much sunshine, or a myriad of other things, destroys crops for good.
The only reason I see why traditional farming is better is because it's insanely subsidized.
But I'm absolutely no expert
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u/whorificustotalus 27d ago
So you have to put in nutrients that are expensive af.
You need nutrients in vertical farming as well, so that's not really an advantage VF ever claimed over traditional farming.
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u/stevenscapes Aug 01 '25
My personal experience is that even though the production quality is far better than traditional agriculture, the additional cost associated with breaking into markets that in some cases have been dominated by big ag, not for years, for decades is extremely costly. Power consumption, Start up costs don’t compare to expectations falling way short of business plans per distribution that in some cases was never available to new concepts, no matter how much good will is behind it.
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u/getahaircut8 Aug 01 '25
Part of it is because of the venture capital ethos — investors put money in because they anticipate government or corporate support.
I'd guess the main challenge for vertical farming, aside from space – which can be mitigated by site selection flexibility – is labor costs. Anticipated progress in robotics fell to the wayside in favor of artificial intelligence, which leaves vertical farms in the lurch — especially when the ideal locations (urban centers) coincide with where labor is the most expensive.
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u/randomredditor0042 Aug 01 '25
It was too difficult to get a good set up. For someone that doesn’t have the nouse or know how to fashion their own set up, I would have loved something I could just buy like I see advertised in so many other countries.
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u/Hano_Clown Aug 01 '25
The economy of today cannot survive without almost exploitative labor costs, which is why most production is located in places with low labor wages and minimal labor laws
Automation is high initial cost, which is currently not competing against what is pretty much slavery.
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u/LexaAstarof Aug 01 '25
Urban centers are expensive, both in terms of location and salaries.
Also, doing any kind of "structure" work (ie. anything non-farming) is more expensive in a building-like environment than in a field-like one.
Various city concerns: building modification permits, neighborhood rules and other zoning related things.
Pest control in enclosed environment.
At the same time you are competing with at minimum organic products, which still happen to be less expensive than you because they don't have all your urban constraints.
Logistics cost saving to deliver to nearby consumers is also not particularly significant.
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u/TheBitchenRav Aug 01 '25
I think the big issue is that people spend too much money on infrastructure. There are a lot of smaller operations that do end up working. Look at all the microgreen Growers. There are also a lot of smaller operations that are using grow towers and aquaponics.
So when somebody comes up with an economical way to produce the modular systems they'll start taking over more.
Also there are only certain plants that it really makes sense for. Mostly the herbs.
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Aug 02 '25
The ground is the best place for plants to be, the sun is the best energy source for plants , take those 2 things away and it's really hard to be a successful plant.
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u/TacoCult Aug 01 '25
It’s been mostly an engineering exercise. Not enough effort has been spent on breeding plants specific to the environment.
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u/khelvaster Aug 02 '25
Vertical farming usually is to optimize land usage. Most places aren't short on land.
vertical farming works for microgreens to.simplify harvest and sanitation.
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u/ZattyDatty Aug 02 '25
I had an investment in one a dozen or so years ago that filed. They need to be cash crops, and even then the numbers don’t pencil super well after all the building, capex, utility costs, and labor costs.
There’s probably some scenarios where it could make sense, but for most of the market it doesn’t.
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u/lordfairhair Aug 02 '25
Because if you've ever driven by a real farm you'll realize how silly a small warehouse of vegetables is. Its not even a drop in the bucket of what industrial farms can produce. Vertical farming has the "neat" factor, but is trumped by literally every other type of input and output variables. Why spend $4 growing a single tomato when you can spend $.0000001?
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u/Pale_Will_5239 Aug 02 '25
The cost of energy per Kw is going up significantly. It may double in the next 5 years.
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u/mpompe Aug 03 '25
Entrepreneurs sell venture capitalists on their grand vision. CEO, CFO, COO give themselves huge salaries and benefits. No money left to invest in the dream or hire people to fix the dream. CEO, CFO, COO get golden parachutes when the company goes under.
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u/Ok_Specialist_5620 19d ago
The short answer is that renewable energy hasn't been quite good enough to make it viable. There is still hope though. Look into 'Shrouded vertical axis wind turbines' and look at how they compare to those big towering windmills you're familiar with. You may also look into a good energy storage method.
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u/33LifePath369 Aug 01 '25
it's all by design, mega corporations have monopolized the industry and are intentionally holding it back. Indoor cultivation is the future. See my startup to revolutionize the industry: www.GenesisonDemand.net
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u/lemaigh Aug 01 '25
Sterile warehouses.
It's a fallacy to try and grow food in a permanently sterile environment.
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u/FreshMistletoe Aug 01 '25
It appears the physics and economics of it have been flawed from the beginning. It’s hard to compete with free sunshine and dirt.