Growing leafy greens vertically: how we assess and work with the market

Successfully growing leafy greens and herbs vertically requires a holistic market understanding first and foremost

This article is the first in a two-part series written by Freddie Reed, Product Manager at IGS. Freddie is the linchpin between our plant science and product teams, working to develop repeatable, high-quality crop recipes for customers with vertical farming technology.

Growing leafy greens and herbs vertically is an effective way for growers to produce popular crops year-round, as well as dipping their toes into niche varieties which can diversify output. At IGS, we empower our customers worldwide with proven vertical farming technology. We give them repeatable, efficient, and, above all, quality crop recipes which can be used across the year, regardless of the weather outside.

This process is built off several factors, primarily looking at market size, regionality, seasonality, and retailer specifications, as well as potential for market growth. All these areas feed into our crop recipe development process, establishing a solid foundation for growers to build upon.

What does the market look like?

As consumers, we usually buy baby leaf salads pre-packaged, either made up of a single crop or as a pre-mixed salad bag. This is a rapidly accelerating market (expected to grow at a CAGR of 6.8% and generate a revenue of USD 20,182.9 million by 2030). This growth is driven by consumers shifting to a more health-conscious diet, whilst also favouring pre-packaged products for busy modern lifestyles. Growers are scaling to meet this demand, but this is made increasingly difficult due to extreme weather-related volatilities and geopolitical volatilities.

Mainstream crops in most markets tend to be spinach, rocket, and green or red lettuce of various varieties. Flavourful crops, like mustard or sorrel, are then typically added in smaller quantities to mixed salad bags to add flavour and differentiate products. These more niche crops are either sold ex-farm (the price of the product at the farm gate), as separate components, or wholesale as pre-mixed value-added products.

Ex-farm prices tend to be much lower than wholesale prices. Selling in this way is therefore unlikely to make a vertical farming operation – where there is a higher level of initial capital investment required than growing in a field or greenhouse – profitable. For this reason, facilities integrating vertical farming need to be at a sufficient scale to warrant investment in processing and packaging equipment. By pairing the shorter, more predictable growth cycles enabled by vertical farming with advanced scheduling and high-care production, produce can go straight from the harvesting line to packaging and processing, giving growers compete control of the full process.

Regionality

We always look to establish whether there’s a viable market for any given crop in the region in question, including establishing whether there is a market need for alternative or additional means of food production. This boils down to two factors:

1. Is there sufficient market demand in the region?

2. Does the regional supply chain have issues that could be addressed through vertical farming?

In the UAE, for instance, baby leaf spinach is one of the most popular salad crops with consumers, however, there is very little local production due to the climate. Most of the supply is sourced from Europe, and this comes with significant additional transport costs (both economically and environmentally). However, this does make the UAE an attractive market for growing this crop vertically. In the UK (where growing conditions are favourable), the crop is more freely available. This means the return on investment isn’t high enough to warrant growing in a vertical farm, so in this instance, the market fit isn’t as effective.

Vertical farming allows growers to produce in-demand crops throughout the year, maintaining quality and targeting desired flavour profiles regardless of external weather. Seasonality can also play a crucial role in what crops are popular in certain regions, but we can bypass this and use it to our advantage when growing vertically and tailoring every aspect of the growing environment.

Tailoring flavour profiles to meet market preferences

Our plant science team has decades of combined experience and knowledge in tailoring crop growth conditions. We use this knowledge to create growth recipes which allow our customers to target specific market preferences, ultimately making their offering more desirable. Take basil, for example. The crop itself has different compounds which can significantly alter its flavour profile, resulting in either an aniseed or peppery taste. In the UK, supermarkets tend to prefer the peppery flavour, while other countries across mainland Europe may prefer the aniseed flavour. Our technology uses a multispectral lighting system to adjust the balance used, working to tailor and enhance flavour (in tandem with nutrition, fertigation, and other factors used to control a crop’s growing environment). This can significantly change a crop’s chemical composition without altering its genetic make-up, giving growers flexibility on which markets to target.

How our crop recipe development process helps growers

Behind any successful leafy green and herb growing operation are futureproof, dependable crop recipes. Our process examines both market size and specific regional preferences, amongst other factors, to help determine the potential for different crops. This is part of a holistic and comprehensive approach to ensure that growers are producing the right crops in the right locations, capitalising on vertical farming’s advantages in tailoring plant growth and bypassing seasonality.

Keep an eye out for my next blog post, which will help explain how we test and validate new crops, explore some of the specific challenges faced when it comes to growing leafy greens and herbs, and how we’re iterating our technology to remain cutting-edge and unlock unique avenues for our customers.

Learn more about what goes into a successful vertical farming operation – download one of our guides today.

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