2024 State of the Industry

Patience and persistence are necessary for the CEA industry to get through this year and likely into the next one. Without them, you may be feeling despondent about some of the market challenges — one of the largest is that of declining investment funds. But a change in the investment landscape does not spell bad news for the industry. Consumer demand for fresh produce grown under cover continues to magnify, and the retailers are making space on shelves for it.

During an industry event this year, Abby Prior, chief commercial officer at BrightFarms, recalled how sales from salads grown indoors were nearly zero when she started with the company nine years ago. At the end of 2023, the leafy greens category reached almost $400 million, with a compound annual growth rate of about 36% for the last five years, she said.

“If you project that out at 36%, we’re a billion-dollar category not too long from today,” she added.

Paul Sellew, founder of Little Leaf Farms, said his company is growing more than 50% per year.

“It’s the product quality; it’s the eating experience; it’s the great consumer experience and just buying a better quality leafy green than they were used to buying,” he said.

During the “Securing Investment for Start-Ups and Financing Farm Expansion” panel at this year’s Indoor AgTech Innovation Summit, Randall Lewis, managing partner at investment firm Cleveland Avenue, was optimistic about the industry and its access to capital.

“The thesis around investing in CEA and indoor ag is still strong. … Even though there are challenges associated with business models, there are a lot of reasons to believe things are going to be favorable going forward,” he said. “There will be still be venture capital dollars available, and the hope is operating models become more efficient. We’ve seen a lot of players in the marketplace reduce costs, pivot business models and adopt new technologies. And as that road to profitability becomes more credible and it’s actually realized, you’ll see even greater sources of capital come into the sector.”

In this year’s state of the industry issue, we had candid conversations with industry leaders, heard from a grower that made market adjustments and learned of a new CEA-focused program at the University of Wyoming.

Click the links below to read each of the conversations:

Pacing for profitability: Tom Stenzel and Tracy Nazzaro

Innovations, local demand fuel growth: Vonnie Estes

Where are the robots?: Vineland Research and Innovation Centre

A new market for Eden Green

States court CEA business, education for economic development: University of Wyoming

What has concerned you this year? How did you capitalize on a new opportunity? Share your story with me at krodda@gie.net.