Idea Development Trends: Urban Farming

May 8, 2020 | Innovation, Signals

Urban farming is so much more than growing basil from your kitchen window. It is a $210 billion market, projected to reach $288.71 billion by 2026, growing at a CAGR of 3.6% during the forecast period. This re-adoption and regrowth has the potential to change the world.

But first!

…A little history. The start of industrialized agriculture dates back to the early 1900s when farmers began using synthetic materials to grow more food and bigger food because it was more profitable.  Then, in the 1960s factory farming became mainstream. Since then, industrialized agriculture has been responsible for GMOs, e.Coli outbreaks, negative environmental impacts and more. Is it all bad? No, but things have really grown out of control.

What you need to know – and probably already surmised – is that more and more people are starting to make real changes to their lifestyles and buying habits when it comes to taking care of the planet and one of the most popular ways to change is by way of food. And not just diet/nutrition but actually caring about where it comes from and how to get it.

What you may not know is that investors in both the private and public markets notice the opportunity too. In fact, more than $200M was invested in companies focused on Urban Farming  in just the last 8 years. Nearly 12% of total investments went to food and beverage companies. Investment data from both the private and public markets uncover and hint at what may be next and act as an indicator of future market landscapes, helping to identify opportunities and detect future disruption threats.

TL;DR: Urban Farming is shaping the future of agriculture.

What is driving urban farming innovation?

CONSUMER DEMAND – With 800 million people practicing urban farming worldwide, it’s no surprise that urban farming makes for a huge market: $150B per year and is expected to grow to nearly $290B by 2026. With that many participating consumers and new technologies that help make urban farming more efficient it’s no wonder that urban farming-related businesses brought in over $200M in investments since 2011.

What is driving consumer demand though?

We think it’s climate activism and COVID-19…

Climate activism has really picked up some speed in the last 20 years. From protests and political movements to eco-friendly everything – urban farming is inherently better for the environment. It keeps distribution to a local level and doesn’t use harmful pesticides or hormones in the process. And don’t even get us started on factory farming. No really, we are not gonna get into that (today). To say the least, industrial agriculture comes with pollution, deforestation and an array of other serious issues that aren’t just bad for the planet but bad for our health.

This heightened awareness among the population has really planted the seed (see what we did there)  to a rise in the popularity of urban farming and it’s just getting started.

COVID-19 (or the cough heard around the world) has really brought urban farming to the forefront of the innovation opportunity space. But why exactly? From breaking supply chains, empty store shelves and a higher need for a sense of community – urban farming seems to be the answer.

With restaurant closures, the excess food is quite literally rotting in fields. This excerpt from an article from The American Prospect, nails it:

What accounts for this massive logistical failure, now artificially creating shortages? In nonviral times, much of the food being produced on farms would be sent to schools and restaurants. But with those locations shut down almost categorically nationwide, there’s no infrastructure in place to simply redirect the food to grocery stores and food banks, especially with short-shelf-life items like vegetables, meat, and dairy. Those two tracks—commercial and consumer food supply chains—remain fiercely separated.

Furthermore, last week, EcoWatch mentioned that “Panic buying in some countries during the crisis has led to empty supermarket shelves and an uptick in the purchase of seeds.” This is clear evidence that people are taking matters into their own hands.

Cobalt Predictions in the new normal: Urban Farming X Education

We think the biggest and most impactful innovations exist in EDUCATION and it’s in part, due to all of the benefits that would come from it and we’re all about improving education.

Here are just some of the benefits of urban farming in schools:

  • Learning how to grow your own food (duh)
  • Free meals with the food grown
  • The forming of healthier eating habits
  • Supply chain and logistics education by trading products with other schools
  • Income for schools by selling products to local community

But really, think about it — there are over 98,000 public schools in the United States alone. Boom, there’s your target market AND your infrastructure.

Remember when we mentioned the hundreds of millions of dollars being invested in conscious business models? Wanna know what took .5% of those investments? You guessed it, education. What’s more telling is that fact that over 75% of investments went to indoor gardening and aeroponics. Remember how we said that schools provide the infrastructure – we meant that for indoor and outdoor applications. See for yourself:

The only thing missing now is the actual curriculum, right?

Well, not exactly… This is where we talk about innovation. What can we build to allow for a low-barrier to entry and widespread adoption of urban farming in schools? What is needed outside of the physical space?

Have you met our friend, Cobalt Projects?