Japan, the origin of the vertical farming industry as they, and many others, claim. It seems that consumers are more used to the concept of indoor-grown produce than others. Is that because of the limited agricultural cultivation areas or the ever-growing aging population of farmers? One thing is certain, it has been around way longer than in other countries, including similar ups and downs the industry has been seeing in recent years. However, when zooming into the specifics, there are some noticeable differences when comparing business models, cultivated products, cultivation methods, and more to the rest of the global industry. Let's dive in.
Products and portions
Despite the various products that can be cultivated inside a controlled environment, many vertical farms seem to have dipped their toes into the holy grail of lettuce production as "there is an immense demand to be catered to nationally" as a vertical farm producer said. Several operators see big growing opportunities in meeting that domestic demand for lettuce and thus 'high-value products' as they're often called by other industry players, are far to be found on the priority list.
Smaller portions
A noticeable key difference in product weight is that there is a shift happening amongst Japanese consumers as they prefer small portions of lettuce, e.g., over a whole head of lettuce that could touch 300 grams.
Therefore, most retail stores have a wider array of 80-100gr lettuce than anything above those portions. Lettuce is not yet dominantly present in the national cuisine but is frequently used as an addition to a dish rather than as a main ingredient. Many of the vertically produced lettuce goes to the processing industry, where lettuce or herbs will be part of a dish, sandwich, ramen dish, and more.
Because of this product characteristic, most Japanese vertical farms that cater to consumers, have very densely stacked layers that sometimes hold up to as many as 28 layers. However, the average number of tiers is around 10 layers.
Full operational control
In comparison to the European market, it's clear that the medium- and large-scale vertical farms are on top of every processing part inside their facility.
Not only from an automation perspective but also the efficiency rate per worker, per minute (or hour, depending on the measuring). The following may come across as offensive but in contrast. Micromanaging workers is seen as an effective way of optimizing production. However, this method might not be well received in any country because it only fits within a certain (work) culture.
The close monitoring of workers is quite a common practice in Asian factories, whereas in other continents that might be a less preferred monitoring practice.
Collaboration
Most vertical farming companies are very transparent when it comes to sharing data and don't shy away from showing their numbers. The great thing about their collaboration is that they can share earlier mistakes with 'colleagues' to prevent them from making them. On top of that, they make use of a collaborative network that allows vertical farms to manage risks related to over- or undersupply. When more supply is needed, they can ask colleagues for a hand, and if there's an oversupply, they'll be able to jump in for others.
Branding
808 Factory, as seen in an earlier article, has been heavily investing in TV commercials and a dedicated ringtone that plays when an 808 Factory commercial pops up, which is a common thing to deploy in Japan. This made many locals and nationals recognize 808 Factory's produce in-store and beyond, on the radio or so.
The urge to produce indoors is real
There is a national urge to move production indoors as climate change is getting more extreme every year. This year, the heat was 'almost undoable', whereas greenhouse growers were hit by tremendous cooling costs as they were unable to lower temperatures in their facilities.
The need for this transition is heavily supported by the government. As discussed at the GPEC show in July, vertical farm suppliers let know that it's sometimes hard to push the industry to go vertical as the government is actively subsidizing construction of plastic greenhouses. "The government is covering up to 50% of the total investment if growers decide to deploy greenhouses. Whereas for a glass greenhouse, they will miss out on this loan. Despite it being a more robust solution, the government isn't yet supporting this as it's too high of an investment and growers are not yet ready to take that risk given COVID-19 left quite a bad taste in their mouth."
Not only greenhouse growers were affected by Covid-19, but also vertical farmers were hit by decreasing sales, and more. Therefore, various vertical farms had to close their doors. Fortunately, many did survive and are still in the running.