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Ocado bets £17m on vertical farming

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Nicholas Fearn

The online grocer is investing £17m into the emerging vertical farming sector as it continues to diversify its technology portfolio.

The firm announced it had completed two deals in this area. Vertical farming sees food produced within indoor facilities where crops are grown on a series of precisely controlled stacked levels.

Adoption of this form of farming is increasing because it can result in low wastage, low water use, minimal land use and no pesticides, while allowing predictable yields of high-quality produce.

Ocado said: “We foresee a day where customers’ vegetables are harvested hours before they are packed, metres from where they are shipped, bringing the freshest, best tasting, and pesticide-free produce to customers with the fewest food miles.”

The first deal is a strategic partnership with 80 Acres Farms and Priva Holding BV, which have been working together for four years to design turnkey solutions for vertical farming clients.

Under a venture called Infinite Acres, the firms will combine their skills and expertise in this growing sector. While Netherlands-based Priva is an expert in industrial systems for the horticultural industry, US company 80 Acres offers science knowledge and operations management.

Ocado will contribute its software and hardware systems, including robotics and automation, digital twinning, and machine learning and artificial intelligence.

Mike Zelkind, CEO of 80 Acres, said: “The partnership will provide its customers with everything from state-of-the-art facilities with uniquely developed crop recipes and the right unit economics, to an option for facility management with yield guarantees, product packaging, branding, marketing, and distribution.”

Meiny Prins, CEO of Priva, added: “We can develop optimal environments in which plants and food crops experience the best way to grow indoors, using leading-edge technology and solutions which result in substantially lower energy and water use, as well as reducing food waste.”

As well as a new joint venture, Ocado has also acquired a 58% stake in vertical farming player Jones Food Company.

The company produces leafy greens and herbs for customers across the UK and is expected to grow its capacity to 420 tonnes a year.

Ocado said JFC has the ability to produce consistent crop yields throughout the year and plans to expand crop types and production across the UK.

Tim Steiner, CEO of Ocado, said: “We believe that our investments today in vertical farming will allow us to address fundamental consumer concerns on freshness and sustainability and build on new technologies that will revolutionise the way customers access fresh produce.

“Our hope ultimately is to co-locate vertical farms within or next to our CFCs and Ocado Zoom’s microfulfilment centres so that we can offer the very freshest and most sustainable produce that could be delivered to a customer’s kitchen within an hour of it being picked.”

James Lloyd-Jones, CEO of Jones Foods, added: “We are certain that the combination of their world-leading logistics and automation systems coupled with our advanced growing technology will transform the way customers experience fresh produce – delivered fresh to their door a matter of hours from ordering.”

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