Jan 5, 2022
Editor’s Note: The following list details some of 2021’s biggest controlled environment agriculture (CEA) victories and defeats. This list is not exhaustive but rather meant as a recap of this year, and is based on the Agritecture team’s personal opinions regarding the industry.
2021 has been a long and challenging year. Between the increasing rate of catastrophic climatic events, faltering supply chains, and labor shortages, one could argue that the need for CEA has never been greater.
As we say goodbye to 2021, let’s take a closer look at some of the biggest controlled environment agriculture wins and losses that have taken place over this past year.
The 6 Biggest CEA Wins Of 2021
USDA’s search for a Director of the Office of Urban Agriculture and Innovative Production (OUAIP)
The 2018 Farm Bill required the USDA to establish the OUAIP, which in turn has helped enable organizations to tap into USDA funds for the establishment and growth of urban farms around the country. In November 2021, the USDA announced that they would be supporting these efforts by hiring a Director to be “responsible for the management, leadership, and direction of all related” OUAIP activities.
The Agritecture team is interested to see how this office and the eventual director balance their support of both community/educational farms and some of the more “innovative” producers, which we assume to be mostly commercial and indoor.
Global conglomerate Cox Enterprises’ acquisition of indoor-agriculture company BrightFarms
After securing $100 million in new funding in 2020, at the start of 2021, BrightFarms had announced ambitious plans to construct greenhouses in every major market by 2025. Fast Forward to August 2021, the indoor farming company was acquired by communications and automotive leader Cox Enterprises, in a move to bolster BrightFarms’ leadership in the indoor-agriculture space and enable Cox to reach its goal of building a multibillion-dollar cleantech business by 2030.
BrightFarms growing market advantage and relationships with large retailers will enable the team to broaden its mission and take on the challenge of bringing locally-produced indoor leafy greens to more than two-thirds of the U.S. population by 2025.
Equilibrium Capital successfully closed the largest CEA fund ever
In July 2021, leading sustainability-driven investment management firm, Equilibrium Capital, announced the closing of their new Controlled Environment Foods Fund II (CEFF II) at $1.02 billion. This success will allow Equilibrium to invest at a massive scale in mostly high-tech greenhouses across North America, and focus on mass CEA production.
In an interview with Agritecture earlier this year, Dave Chen, Chief Executive Officer at Equilibrium, remarked that vertical farms and greenhouses “are toolkits to help us solve the agricultural challenges in front of us.” A major change that has occurred since the company made their first investment into the CEA space 4 years ago “is that people have “a deeper understanding of the pervasive and invasive implications of climate change. And I think now folks really understand that agriculture is ground zero for climate.”
NYC will establish its first Office of Urban Agriculture
New York City passed its first urban agriculture bill in 2017, though by our account it was a watered-down version of the bill’s original intention. In 2021, Brooklyn Borough President (now Mayor) Eric Adams, alongside prestigious universities and leading urban agriculture advocates, released a new report on the untapped potential of urban agriculture, titled “The New Agrarian Economy.” This report reflects on the economic devastation caused by the COVID-19 pandemic and lays out the groundwork for concrete proposals to encourage the growth of urban agriculture operations.
Following this, in October 2021, the city council passed bills that will establish an office of urban agriculture and an urban agriculture advisory board. A recent interview with New York City Council Member Ben Kallos reveals how the City plans to support the local population with the new office and advisory board. As with the OUAIP announcement, Agritecture is keen to observe how success metrics will be measured and where CEA will fit into the conversation.
US-focused vertical farming company Kalera’s acquisition of German counterpart &ever
Another acquisition that took the industry by surprise in August 2021 was that of global leader in baby leaf indoor farming, &ever GmbH. The deal worth $153 million enabled Kalera to rapidly grow its international reach across Europe, Southeast Asia, and the Middle East. This development goes hand-in-hand with Kalera’s acquisition of Vindara, the only seed company dedicated specifically for CEA, complementing the company’s industry-leading position.
Agritecture recently featured Kalera as one of 2022’s urban farming trendsetters to look out for.
Major North American field grower Taylor Farms' first investment in the CEA industry
In a series of acquisitions and investment rounds to take the industry by storm in August 2021, North America’s largest grower and processor of leafy greens Taylor Farms grabbed headlines for their investment in Pure Green Farms, a hydroponic lettuce grower in South Bend, Indiana. This expansion into greenhouse-grown produce complements Taylor Farms’ existing 100,000+ acre crop fields and 16 salad-producing facilities across North America, alongside signaling optimistic growth of the CEA industry.
Agritecture interviewed Joe McGuire, CEO of Pure Green Farms, to learn more about what this investment means for the company and the industry as a whole.
The 3 Biggest CEA Losses Of 2021
AppHarvest’s steep stock price drop
The CEA industry started the year eager to see how AgTech pioneer AppHarvest would perform as a publicly-traded company after completing a SPAC deal in early 2021.
Since the initial excitement, which saw the stock price reach a high of $42.90, the company has seen a decline. At the time this article was written, AppHarvest’s stock was trading at $4.13 per share. The company reported a net second-quarter loss of $32 million and a net third-quarter loss of $17.3 million. Despite this, the AppHarvest team has reportedly remained optimistic about its trajectory.
Farm operators believe CEA susceptible to excessive greenwashing
CEA businesses frequently claim their operations are “sustainable” because they inherently use land and water more efficiently than traditional farms. However, it’s rare that we see individual CEA businesses publishing data from their farms to back these claims. Agritecture believes this is a major reason why, as reported in our 2021 Global CEA Census, 70% of respondents (CEA growers) believe the industry is susceptible to excessive greenwashing.
Published in December 2021, this report hopes to act as “an invitation for the industry to step up” and be as transparent as possible with their operational data. It is only with industry-wide trust and transparency that we can hope to continue to see the CEA industry grow.
AeroFarms SPAC deal fallout
In March of this year, vertical farming company AeroFarms agreed to go public through a merger with blank-check firm Spring Valley Acquisition Corp. The SPAC deal gave the combined entity a value of $1.2 billion.
Fast forward 7 months, and the two companies mutually agreed to terminate the Business Combination Agreement without specifying a reason. This news was shocking given the amount of large fundraising rounds the CEA industry has attracted over the year.
With an agricultural system that will be increasingly challenged by climate change, Agritecture continues to remain optimistic about the growth of the CEA industry. However, as recently expressed by Agritecture’s Founder & CEO, Henry Gordon-Smith, the CEA industry may be headed toward a correction phase. While Henry believes “the future is bright for CEA,” it’s not surprising that we’ll see both big wins and big losses along the way. Read Henry’s full article!
