Link: Crain’s Chicago
Nearly 7 million pounds of hydroponic tomatoes will be harvested this year from two 7.5-acre greenhouses in Rochelle, about 80 miles west of Chicago. Another new greenhouse in that small town is delivering greens, herbs and tomatoes year-round to all Mariano’s supermarkets in the Chicago area. And on the South Side, a greenhouse atop a soap factory is producing 25 crops of leafy greens a year, the equivalent yield of a 50-acre farm in just under 2 acres of space.
The amount of local, sustainably grown produce available throughout the year in Chicago has never been greater. But it’s still not enough, as health-centric millennials assert their dominance over the U.S. food chain. While greenhouses have long been a mainstay of fresh produce in Europe, the industry is still nascent in North America, where open, irrigable land is more plentiful. Substantial capital requirements and slim margins—especially in the early days of a controlled farming operation—can stymie startups and, in fact, recently caused one high-profile vertical farm to shut down in suburban Chicago. Still, an influx of venture and private-equity money is funding the erection of more greenhouses and indoor farms, mostly around big population centers like Chicago.
North America is expected to be the fastest-growing commercial greenhouse market worldwide through 2020, according to a report from market research firm Research & Markets. Globally, the industry is projected to grow at a compounded annual rate of 8.8 percent, reaching nearly $30 billion by 2020, the report says.
“It reminds me a bit of solar 1.0, where capital intensity is unknown or varied, and the industry is immature and unproven,” says Sanjeev Krishnan, managing director of Chicago-based S2G Ventures, which invests in food and agriculture companies focused on healthy, sustainable and local food. But like solar panels, whose costs have come down substantially over the last decade, Krishnan thinks what he calls “controlled agriculture” is well on the way to proving itself as a sustainable business model. “We believe in the trend of growing closer to your demand center. It makes sense for logistics costs, (spoilage) and a product quality perspective.”
Why would this be a valuable idea for Indy? Would some of these corporations be interested in investing in the Indianapolis market?