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Consumers’ increasing demand for safe, sustainable, locally grown food is driving interest and investment in controlled-environment agriculture (CEA). While much of the production in controlled-environment food production is focused on lettuce, leafy greens, tomatoes, and cucumbers, an increasing number of companies are looking at additional crops that can be grown in these production systems. Research from KD Market Insights projects the global CEA market to grow from $75 million in 2020 to an estimated $172 million in 2025, registering a compound annual growth rate of 18.7% during that time — and with the world’s population projected to grow to almost 10 billion by 2050, the global demand for food will continue to rise.

The majority of CEA food production is still done in greenhouses, but an increasing amount of food crops are being grown in vertically stacked layers in indoor vertical farms. While greenhouses have the benefit of growing with natural sunlight, indoor vertical farms have the ability to deliver the exact environmental conditions required by specific plants, including the optimum temperature, humidity, and light levels — and allow producers to multiply their crop outputs significantly without expanding their physical footprint. CEA operations can produce more food using fewer resources while reducing dependency on arable land.

In addition to the increased output, indoor agriculture like vertical farming reduces variance based on climate and pest issues. CEA operations generally require less water, less fertilizer, and markedly less pesticides than conventional agriculture. Producers can grow crops year-round instead of waiting for the optimal growing season and work outside of traditional geographic constraints, allowing a wide variety of fresh produce to be grown close to distributors and customers — more than half of whom currently live in urban areas, a number expected to grow to 68% by 2050.

From Printers to Produce

For years, vertical farming was a niche industry, with high energy costs preventing the practice from taking hold. That changed with the widespread availability of cost-effective LED lighting, leading to entirely new focus areas for some companies.

DASCOM Americas in Augusta County, a wholly owned subsidiary of Hong Kong-based company DASCOM, was initially focused on business printing. As the company expanded into LED and began exhibiting its products at major shows, it became apparent that lighting systems for plant production, initially a small part of its lighting product line, represented a very large, interesting growth opportunity.

Shenandoah Valley-based DASCOM Americas works with producers to customize its HYVE lighting system for vertical farms

Shenandoah Valley-based DASCOM Americas works with producers to customize its HYVE lighting system for vertical farms.

While many inquiries at trade shows were focused on the lighting systems’ potential to aid in the burgeoning cannabis market, companies saw the potential for the systems to increase production of food crops. 

"Attendees would stop and comment about the lights, but the majority were just as interested in the racking system to which the lights were attached," said Ken Bryant, director of marketing at DASCOM Americas. "We came back from the show and talked with our engineers and product development team. We told them we have something here much bigger than just grow lights. We have a chance to do something really special with lasting impact across a broad spectrum that won’t just change our company, but has real potential to change the world."

Going Beyond Traditional Farming

Today, DASCOM Americas manufactures complete production systems for CEA farms, from racking to irrigation and fertilization to the trays where the plants grow. The company works with producers to build systems customized to facility spaces and the desired end product, which the company calls the HYVE system (short for “Hydroponic Vertical”).

Babylon Micro-Farms, Richmond

Babylon Micro-Farms, Richmond

“We have inquiries from people interested in growing 1,100 tons of lettuce per month who want us to design them a system to do that,” said Dr. Paul Edmondson, chief scientist and researcher at DASCOM Americas. “Someone else may call who has a building with these particular specs and wants to see how many of our production racks can be installed in a particular space. We have the ability to meet these customers’ different needs and customize the production systems for them.”

Bryant said in the short time that the HYVE systems have been marketed, he has been most impressed with the amount of value the systems have provided people at many different levels.

“Looking at this from the standpoint of economic development and the disruptive nature of what we are doing, this is a positive disruptor,” Bryant said. “We have the opportunity to give consumers healthy, sustainable, fresh food choices. We can give farmers the opportunity not to displace traditional farming, but to give them a means and a way to make a living year-round.”

We have a chance to do something really special with lasting impact across a broad spectrum that won't just change our company, but has real potential to change the world.

Ken Bryant Director of Marketing, DASCOM Americas

Simplifying Hydroponic Food Production

Alexander Olesen and Graham Smith, founders of Richmond-headquartered Babylon Micro-Farms, met as students at the University of Virginia. While there, the two developed a self-contained, hydroponic vertical farm system to produce food crops. The inspiration for their system design was to enable food-insecure refugees in the Middle East an opportunity to produce their own food.

The indoor micro-farm system Olesen and Smith designed is now being used by a variety of organizations and companies — including food service businesses, schools, senior living facilities, and hospitals — to grow food crops, including lettuce, leafy greens, herbs, and edible flowers.

While the agriculture industry was being transformed by the advance of LED lighting, Babylon made other key technological breakthroughs. One major reason Olesen and Smith founded the company was to create a cloud-based management platform for hydroponic farms. They then combined the company’s services into an all-inclusive farm system.

“Our core business is a remote management platform that is designed to make sustainable agriculture accessible to new markets simply and efficiently,” Olesen said. “Since we do everything through the cloud, there is no need to look to expand our system manufacturing beyond Virginia.”

Developing Future CEA Innovations

Michael Schwarz, associate director of Virginia Tech’s Controlled Environmental Agriculture Innovation Center (CEA-IC), said the university has been reaching out to companies looking to start or expand controlled-environment businesses to get their thoughts on what the Virginia agriculture industry needed to do to succeed and grow.

The response — what Schwarz called “a resounding push for new technologies” — inspired Virginia Tech to create the Center for Advanced Innovations in Agriculture (CAIA), the parent organization to the CEA-IC. Schwarz and his team conduct research in topics vital to indoor farming, including hydroponics, aquaponics, and aquaculture and work closely with other Virginia research institutions, including the Institute for Advanced Learning and Research (IALR) in Danville.

David Rosenberg, founder and CEO of New Jersey-based AeroFarms, cited IALR as a major reason why his company chose to build its largest indoor vertical farm to date in Cane Creek Centre, an industrial park jointly owned by the city of Danville and Pittsylvania County in Southern Virginia. The facility will help AeroFarms fulfill its production partnerships with major retailers like Amazon Fresh, Ahold Delhaize, Walmart, and Whole Foods Market, while the location continues to reinforce its commercial proven history to grow large crop volumes in small, urban footprints.

“Locating in the Danville area specifically highlights how our innovative indoor growing approach works in both rural and urban environments, and ultimately meets the increased consumer demand for safely grown, great-tasting, local produce that can be available all year round,” Rosenberg said.

The Center for Advanced Innovations in Agriculture, Virginia Tech

The Center for Advanced Innovations in Agriculture, Virginia Tech

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