The Market Case (CEA)

The Market Case for Controlled Environment Agriculture & Beyond


Background: Controlled Environment Agricultural techniques like Vertical Farming, Greenhouse, and Aquaculture are in the early stages of a secular growth story. Rising demand for local, organic quality foods, the need for greater access and traceability, and increasing environmental and scarcity threats are driving the need. Falling technology costs and improved growing techniques are driving increasingly attractive economics. Long-term growth potential is in the hundreds of billions for long-term infrastructure needs. CEA investment can provide stable cash flows with upside, while providing social and environmental restoration.

Market Imbalances

  • A Domestic Deficit
    • Greenhouse growing produces $340B in product value ex-US while the US produces less than $1B in product value. If we were to align US production with per capita levels, the industry would need to grow 10X+ (USDA 2012).
    • Aquaculture already produces 50% of global seafood supply with US market share being ~1%. The US imports ~85% of its seafood supply, which is often rife with quality issues (FAO 2014).
  • Unmet Demand
    • The Organic Premium: Premiums for organic products range from 30%-300% pointing to a severe supply-demand imbalance. CEA can reduce this imbalance
    • The Growth of Hyper Local: Farm-to-Table, Farm-to-School, Farmer’s Markets and other local food categories are the fastest growing food segment and reached $12B in 2014.

Economic Needs

  • Jobs: CEA provides ‘green collar’ jobs across the socioeconomic spectrum.
  • Food Waste: Up to 50% of food is wasted before it can be consumed. Reducing food waste delivers more value-added economic growth and is the #3 solution to reversing climate change. CEA reduces food waste through just in time, weather-agnostic production.
  • Infrastructure Upgrades: CEA facilitates infrastructure upgrades like distributed energy micro-grid and could be paired with lower return spectrum upgrades to facilitate public-private partnerships.
  • Human Health: Increasing the supply of nutrition available to society can address long-term unmanageable health costs associated with nutrient deficiency or harmful toxins.
  • Value-Added Downstream Businesses: CEA can facilitate growth in the fields of education, value-added production like nutraceuticals and renewable fiber industry.

Environmental Needs

CEA meets a critical need in the face of soil and water scarcity and food supply risk due to Climate Volatility (drought, flood, hot wind & excessive heat). CEA is a profitable hedge against these conditions. CEA can offer the highest efficiency in food production in terms of carbon, energy, space, water and transit.

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