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WHAT IS NEEDED?
WHY CHICAGO?
Indoor farming is not a new concept. Greenhouses, hoophouses, and tomato hothouses have long been an option for growing plants. But meeting the food needs of a growing population requires indoor farming on a much, much larger scale. That’s where vertical farming comes in. Assessing the economic viability, scalability, and profitability of the vertical farming concept is where Hoadley comes in. Large, complicated, long-lead real estate projects are Hoadley’s specialty, and that’s just what this new subsector of agribusiness will require. “The concept of vertical farming occupies the intersection of the foodenergy-water nexus,” says Hoadley, “and that’s the Holy Grail of hypercomplexity. The challenge is finding simple solutions and business models.” Meeting the demands of such a complex project creates a significant opportunity because it represents “a new asset class that will hit the sweet spot for global institutional investors interested in investment exposure to water,” he explains. It will require facilities that are built specifically to meet the needs of the industry, with solid-state lighting, temperature, pest management, and air flow controls and design. And that means opportunity.
Hoadley, and his company FEWZION, for Food, Energy, Water Zone of Innovation, has joined with Urban Ponics, a Chicago-based vertical farm run by ILLINOIS engineering alumnus Bral Spight, to identify opportunities to develop facilities and scale in this emerging industry. Their joint venture, UrbanFEWZ, is indicative of the role Chicago entrepreneurs are playing in this new sector of agribusiness. For Hoadley, that has meant serving on Mayor Daley’s 2010 Vertical Farm Task Force, co-organizing a National Science Foundation conference on the topic of vertical farming challenges in 2012, and moderating a panel discussion on urban agriculture at last fall’s Chicago Idea Week. “Every NFL city in America has an urban agriculture effort that is dancing somewhere along the language of vertical farming,” he says. “My desire is that Chicago is seen as the global thought leader for this new sector.”
WHAT DOES IT MEAN? The promising business opportunity for investors is created by the reality that there will be an estimated 9 billion people in the world by 2050 and that 1 billion hectares of new
land will be needed to provide the food for them all. With 80 percent of the useable farmland already in production, vertical farming can provide the real estate needed. And because the techniques used in this sector produce 120 times the yield using 90 percent less water than traditional farming practices and are not subject to drought, flood, and other such natural calamities, the payoff for the public is great as well. “Growing crops under cover is a promising, growing business that meets these important objectives and many more,” says Hoadley, like creating jobs, conserving water, addressing nutrition and healthcare concerns, and significantly decreasing the reliance on fuel to transport produce long distances. “My inspiration to be part of this industry rests in my personal interest in water,” says Hoadley. “From a professional standpoint, my desire is to help develop facilities by connecting venture capitalists with producers and producers with consumers. The moment that institutional investors recognize returns for this new asset class that are equivalent to other asset classes, business models will rapidly become more sophisticated and there will be an explosion in the growth of this sector. I think that’s as close as 6 to 12 months away.” Cathy Lockman
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WHO Michael Hoadley, founder of FEWZION WHAT Exploring the opportunities of vertical farming WHERE Initiatives in Chicago and across the country WHEN Founded in 2011 WHY To provide solutions and business models for meeting the food needs of a growing population
This exhibit at Chicago's Museum of Science and Industry features a multi-media presentation on vertical farming as an example of how our future lives are being shaped today.
Perspectives SPRING 2013
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sk most Americans where their fruits and vegetables come from and you’re likely to hear “a grocery store,” or “a garden,” or “a farm.” Few would tell you their produce comes from a skyscraper, and if they did you’d probably think they had an overactive imagination. But new initiatives in agriculture, specifically vertical farming, make that answer an accurate one. And enterprising ILLINOIS alumni like Michael Hoadley, a 1994 finance graduate, are helping to make it a possibility. Vertical farming, or controlled environments agriculture as it is more accurately termed, means growing crops inside urban buildings as a way to provide fresh, high-quality, pesticide-free produce year-round. For consumers, it means easy access to nutritious food grown locally. For horticulturalists, engineers, and other scientists, it means opportunities to safely and significantly enhance the world’s food supply. For environmentalists, it means growing food in a way that conserves water and energy. For business, says Hoadley, it means a new subsector of agribusiness and a new asset class of real estate, one that holds great potential for investors.
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