Current events could constitute a turning point for indoor ag

Current events could constitute a turning point for indoor ag

Hot weather this summer has lowered yield, reduced quality, and increased the prices of leafy greens, strawberries, and other summer staples. Grocery store buyers are paying more and still experiencing extended shortages, which are causing them to raise prices, change their buying habits, and look for alternatives. While this is a problem for traditional growing regions, it is a huge opportunity for controlled environment agriculture. If indoor ag can provide local, high-quality, reliable solutions, and capture market share, this could be a turning point for a maturing industry looking for a new stronghold.

There are three different problems for grocery stores and shoppers. First, there is less produce available which is driving prices up. Produce prices rose 11% in August, which is higher than the national inflation rate. Second, the quality is worse. The produce arriving at grocery stores is smaller than normal, it has damage from pests, diseases, and the sun. Plus, it has a shorter shelf life because of previous exposure to high temperatures. Finally, some items, like strawberries, are completely unavailable. 

When everything is working, it is risky to try new things. However, when facing higher prices and shortages, it is risky to stay the course. Exploring new options is the smart business decision. Some experiments will work and be adopted as the new standard. Others will revert to the previous normal.

Disruptions and Opportunities

Grocery stores are experimenting. They are purchasing from other growing regions like Canada, Ohio, Florida, and New Jersey.  They are making in store changes, like reducing produce shelf-space and offering discounts to move product through the stores faster to reduce shrinkage. Indoor agriculture is uniquely positioned to leverage this period of uncertainty, because it reliably provides a predictable and high-quality product.

Continue reading.


Photo created by Raul Gonzalez Escobar - Unsplash

Source: iGrow News

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