Driven by the need to secure supplies of fresh vegetables during the pandemic, some vertical farms now expand into other high-margin areas, such as medical cannabis, health supplements and cosmetics.
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South Korean startup Farm 8 Co. is among several urban inland farmers whose sales increased during Covid-19. The goal is to increase sales by almost 50% to 90 billion won (US $ 79 million) this year, in part because of increased production of medicinal and cosmetic plants, such as ginseng, centella asiatica and artemisia campestris, said the chief executive. president, Kang Dae Hyun. In August, the company entered the country’s first regulatory-free zone for medical cannabis, growing and processing hemp to cannabidiol (CBD).
“There is a huge demand for medical cannabis and the market is growing rapidly,” said Kang in an interview. “At the moment, most of our production is dedicated to salad greens, but in the future, we will increase the production of cosmetic and medical plants to maximize profit.”
Other vertical farms have also used technology to meet the growing demand for strict quality control in medical and cosmetic applications, such as the Danish one. International Cosmetics Science Center, Vertigo Farms, Poland, and MedMen Enterprises, based in California.
Farm 8 currently grows about 1.2 tonnes of vegetables per day on less than 0.5 hectare of land, spread over three cities in South Korea, including a busy subway station in the South Korean capital. It is one of the main local producers of lettuce for fast-food chains, such as Subway Restaurants, Burger King and KFC. Sales increased by 30% last year.
This is the traditional market for vertical farms – guaranteed delivery of fresh, quality-controlled products that need to reach consumers quickly, regardless of weather or season. These advantages were in evidence when supply problems in the pandemic and unreliable harvests pushed global food prices to their highest six-year high in February.
“You need the right amount of everything, from water to light, and the weather has to be perfect, which is increasingly difficult to predict,” said Kang. “We started as a traditional agricultural company 16 years ago, but we learned to incorporate technology because we needed to protect ourselves from climate change.”