With the regulations changing day by day, even minute by minute, uncertainty is key in the North American CEA market, but looking at the overall picture, the CEA industry offers plenty of opportunities. That was the conclusion of the panelists of the keynote panel discussion at Indoor Ag-Con. "The state of the industry: It's a challenge. Not a negative state, but there are a lot of challenges down there."
The 12th annual edition of the event is currently taking place in Las Vegas, with over 300 booths on the floor. Tom Stenzel, Executive Director of the CEA Alliance, moderated a keynote panel discussing the state of the controlled environment agriculture (CEA) industry. Panelists included Tisha Livingston, CEO of Infinite Acres; Abby Prior, Chief Commercial Officer of BrightFarms; and Skip Hulett, Vice President and General Counsel of NatureSweet.
Tom addressed challenges in the industry, particularly for indoor vertical farming. The high cost of capital makes profitability difficult for many big players, but smaller operators focusing on specific customer bases continue to find opportunities. He referenced the Gartner Hype Cycle, stating that the industry has moved beyond inflated expectations and the trough of disillusionment, and is now progressing toward a more stable and profitable reality. "What did we learn? The valuations were never realistic and we were never going to disrupt overnight," Tom said. "We will do it, but not at the pace some investors initially expected, and not with the returns people thought of when explained about the Silicon-Valley type of environment." He added it's about farmers first. "Technology is a tool, not the driving factor, and we've also learned constant reinvention may not be the best course. Consistency and discipline are the keys to bringing down costs and improving efficiency. Today's focus in on building positive unit economics. Collaboration as an industry has been higher than ever, and we understand retailers' needs and the need for contact with the customer. We can deliver the freshest, highest quality produce every day."
One key takeaway was that initial valuations in the sector were unrealistic, and the disruption expected in a short time frame did not materialize. Panelists agreed that controlled environment agriculture is an agricultural revolution, but one that will take time. Outdoor farming is becoming more expensive, and as CEA technology advances and costs decrease, the industry expects a shift toward increased adoption. "Significant opportunities are still ahead, of that I'm totally convinced. The need for controlled environment agriculture is only growing," Tom noted. "Traditional farming is facing more challenges, and those lines are going to cross—CEA will become more viable as we refine our technology and operations.."
Tisha shared insights from Infinite Acres and 80 Acres Farms. Recently, they opened up new facilities, and expanded their network with the Kalera acquisition - but getting there was a long road.
Initially focused on greenhouses, the company pivoted to vertical farming due to challenges in finding experienced greenhouse growers and the potential of emerging technologies. "Greenhouses require deep expertise in climate management," she explained. "We saw that qualified growers were aging out of the workforce, and we knew that the future of indoor agriculture had to include vertical farming." Early experiences showed that existing technology was insufficient, prompting collaboration with partners like Priva to develop specialized systems. "We had to start from scratch in many ways," Tisha said. "The early technology didn't work, and we had to partner with others to build what we needed."
Abby discussed BrightFarms' expansion of its semi-closed greenhouse network. The company has built regional supply chains for salad greens and was acquired by Cox Enterprises in 2021. Over the past decade, the market for indoor-grown salads has grown from negligible levels to a substantial share in some regions. "Ten years ago, there were no case studies to show retailers," Abby recalled. "We were selling a vision. Now, indoor-grown greens account for all of the growth in the category." Despite challenges in early adoption, the company has seen strong growth, particularly in markets where indoor-grown salads now represent a major portion of sales. "We've gone from nothing to a dominant force in certain regions," she said. "Scaling up is the next step for the industry."
Skip provided perspective from NatureSweet, which operates 1,400 acres of greenhouses and employs around 9,000 workers. The company is vertically integrated, producing and distributing snack tomatoes, peppers, and cucumbers across North America. He highlighted CEA's role in providing year-round agricultural jobs, particularly in Mexico, where stable employment allows workers to remain in their communities rather than migrate seasonally. "CEA allows us to provide full-time jobs," Skipp said. "In Mexico, this means workers can stay with their families instead of having to leave for seasonal work. That's a major impact."
The panelists noted that CEA faces structural challenges, including outdated policies and regulatory frameworks. "I did not grow up in the tomato industry and I was amazed how political they are", Skip said, and he pointed to the H-2A visa program as an example, explaining that its seasonal requirements do not align with CEA's year-round operations. "We operate 365 days a year," he said. "The visa program wasn't designed for that, and it creates difficulties for labor planning." Additionally, property tax policies often disadvantage greenhouse operations compared to open-field agriculture. "We pay significantly higher taxes simply because we grow under glass instead of in an open field," he explained. "That's not promoting innovation in agriculture."
Collaboration within the industry has increased, with a focus on improving unit economics and meeting retailer expectations. "Farmers first," Tom emphasized. "The operations that succeed are the ones that use technology as a tool, not as the primary driver. Profitability comes from consistency and discipline, not constant reinvention." Industry leaders see potential in breeding programs that tailor genetics for controlled environments, optimizing yield, flavor, and resource efficiency. "CEA genetics need to be developed differently," Tisha added. "Right now, most varieties were bred for open-field production or traditional greenhouses. We need new breeding programs focused on our unique environments."
Panelists agreed that despite industry consolidation and scaling challenges, CEA will continue to grow and evolve. Consumer awareness and demand for fresh, locally grown produce are rising. "We need to talk to consumers and make sure they understand the value of what we're doing," Tisha said. "People want clean food, less plastic, less food waste—CEA addresses those concerns, but we have to communicate that effectively."
The discussion concluded with an acknowledgment of ongoing policy uncertainties and the need for industry advocacy to ensure that CEA is recognized as a key part of agricultural innovation. "We have to keep pushing," Skip said. "Policymakers need to understand the role CEA plays in the future of agriculture. That requires everyone in this industry to stay engaged and work together."