Developing urban ag-tech solutions to hyper-localize production of staple foods

Feeding the World Sustainably in 2050

With the global population forecasted to grow to 9.7 billion by 2050, reliable food supply chains are more important than ever. However, guaranteeing supply is not enough. The environmental sustainability of food production and supply has moved to the forefront of governments’ and consumers’ concerns. Traditional agriculture is among the five sectors that contribute the most to global greenhouse gas emissions. [KC1] This is largely caused by outdated farming practices and the long distances food has to travel from the farm to the consumer’s plate. In much of the developed world, consumers are becoming increasingly aware of the role food production plays in climate change and are changing their preferences towards more sustainable, traceable and healthy options.

Production and Supply Risk in High Latitudes

In addition to the environmental impact, long food supply chains also introduce an inherent supply risk to countries in higher geographic latitudes. The climate in these countries does often not allow for year-round production to guarantee a nutritious diet. This phenomenon is further aggravated by climate-change induced weather shocks. As a result, a country like Canada depends heavily on their trade partners for produce supply. In times of economic and political uncertainty caused by COVID-19, trade wars and the fluctuation in oil prices, it is in the interest of all players along the Canadian food supply chain to prepare and protect against these risks in supply and production.

Vertical Farming: Farms in Urban Warehouses

One innovative way to address the issues currently caused by food production is vertical farming. This is a form of indoor farming that takes place in warehouse-like spaces, where plants are often grown in high-density, climate-controlled, hydroponic environments. In addition to the ability to produce year-round, this method addresses several of the pollution problems of traditional agriculture: As plants are stacked vertically rather than spread out over large fields, yield per square foot is exponentially higher—in other words, land is used more efficiently. Secondly, given the technological sophistication of the climate-controlled environments, these vertical farms are significantly more resource-effective. This holds especially true for water use, which is 95% lower compared to traditional agriculture. As the growing happens indoors using hydroponics, soil depletion is a non-existent problem in vertical farming. Finally, as this method of production does not require vast fields, it can be deployed within the perimeter urban centers, leveraging idle warehouse space shortening the distance between production and the consumer.

 It may not come as a surprise that this innovative way of growing food is most advanced in Japan, Singapore and Taiwan, countries known for their dense populations and technological leadership. At a global level, the CAGR for vertical farming between 2018 and 2024 is forecasted at 28%, however interest is growing much faster in North America with a forecasted CAGR of 325% between 2016 and 2023, when the industry is expected to be US$6.4B. 

Local Leaf: Vertical Farming in Downtown Toronto

Much of this interest is fueled by the United States, while the industry in Canada is still in its early days. Recognizing the enormous potential of vertical farming for the challenges faced by the Canadian market, True North has invested in Local Leaf Corp., a Toronto-based vertical farming player. 

Local Leaf retrofits formerly low-demand industrial buildings for the production of fresh, local produce. The company operates a de-centralized strategy, where food stores are served by the closest Local Leaf facility. In combination with the shortened growth-cycles due to climate-controlled environments, this decentralized strategy allows Local Leaf to rapidly scale and adjust to retailer needs. Using cloud-based monitoring, the company leverages data analytics to drive continuous improvement, reproducibility of product profile, and taste and profitability. 

We are big believers in the potential of sustainable agriculture to contribute significantly in addressing the climate challenges of this century and are proud to be supporting a company that’s growing so close to home.