Bringing Food Production Indoors: Some Examples

Food & Drink

Last month the Indoor Agtech Innovation Summit was held in New York City. It featured the technologies and businesses associated with “Controlled Environment Agriculture,” or CEA which includes everything from greenhouses that still utilize sunlight to “vertical farms” that are completely independent of the outdoor environment. The CEA sector has drawn a great deal of investment driven by several factors: climate change impacts on outdoor farming, growing interest in regional food autonomy, and the ability to deliver an extremely fresh product to consumers. This article features three companies representing the diverse range of growing systems that fall under the Controlled Environment category and also one related marketing platform.

Little Leaf Farms

Little Leaf Farms is an example of the high tech end of the greenhouse segment which is a controlled environment with significant automation but which still utilizes sunlight supplemented by artificial lighting. Little Leaf Farms is the #1 US brand for CEA-grown packaged salad (40% of that sub-market which is part of the broader $13 billion leafy greens market), and their model has demonstrated profitability. The company was founded in 2015 by Paul Sellew, a “serial entrepreneur” who has a BS in horticulture from Cornell University and who was previously involved in developing East Coast greenhouse production of tomatoes. Little Leaf Farms recently raised $300MM to fund further expansion towards a goal of 100 acres under glass by 2026. Their focus is on locally grown baby lettuce with year-round availability and high quality in terms of flavor and freshness. In the future, they also plan to grow herbs and spinach. Because they grow the crop indoors and employ a fully automated “hands free”system they don’t have to triple wash their end product or use chlorine-based sanitizers to achieve food safety.

Little Leaf Farms is not a technology company as such, but rather see themselves as technology integrators following the lead of the well-established and sophisticated European greenhouse industry. They are the general contractor for their own new sites and prefer to build in a “peri-urban” settings where land prices are more reasonable and air quality is better. Their operations are hydroponic (no soil) and they get most of their water by collecting rainfall runoff from the greenhouse which is then UV sterilized. They use supplemental lighting and use CO2 supplementation meaning that they raise the level of that gas in the greenhouse to enable plants to grow faster – e.g. 20-25 days from planting to harvest. The system is protected enough to have minimal issues with plant pests, and biocontrol has been sufficient to deal with occasional insects such as thrips. Their seed genetics come from a separate breeding company. Little Leaf Farms’ branded, packaged lettuce product is currently offered in 2,500 stores in the Northeastern US, where they command a slight premium over outdoor grown options. They are able to reduce their “shrink,” or loss of inventory, with retail partners thanks to their 24-hour greenhouse to grocery delivery time, which also helps to reduce product lost to spoilage. They also have sales through on-line delivery platforms and in food service.

Freight Farms

Freight Farms is an example of indoor vertical farming but on a scale designed for operation by small business owners supplying local markets. The company is based in Boston and has 50-60 employees. Their stated goal is to “democratize the food supply,” and their motto is “Move Farms, Not Food.” Their design is based on standard shipping containers made of stainless steel which they buy from Chinese manufacturers with some specific design features to accommodate their growing architecture and control system. These units enable turn-key operation by their “farmer” customers who are offered a two-day “farm camp” in order to learn how to operate the unit. There is also online support once they are up and running. Inside the container there is a nursery station and four 26’x7.3’ walls to give the container 13,000 total “growing sites”. The production from a container is equivalent to three acres of conventionally grown field lettuce. CTO Jake Felser says that the system costs around $150,000 and that the payback period is in the range of two to three years with typical lettuce production levels and sales at $3/head. The containers can be operated anywhere there is access to electricity with internet connectivity being desirable but not completely required.

The Freight Farms production system is fully hydroponic with the controller managing nutrient and water delivery, but the total water consumption is extremely small (~5 gallons/week). Other aspects of the growing environment are also fully automated including controlled lighting, heating, cooling, and dehumidification. Most of the physical steps in the growing process are done by hand, although an automated seeder can be purchased from another supplier. The operators are instructed to use gloves and coats when entering the unit. Depending on the way the crop is marketed, a HAACP program may be required. For now, Freight Farms units are mostly used for leafy greens, herbs, and some root vegetables, but some customers are exploring strawberries, hops, cucurbits and cannabis. Other crop options are theoretically possible. Some schools and Universities use this system for educational purposes and to supply on-campus dining facilities. Currently there are over 500 of these units in 38 countries and in 48 U.S. states and territories.


Netled is a company based in Finland which has developed an automated vertical farming system suitable for large scale and focused on energy efficiency. It is branded as Vera® technology. Its motto is “high tech, deep roots, green goes vertical.” The system is marketed to commercial growers including a first North American installation in Calgary, Canada. Units start at 100 square meters, but the full economy of scale is realized at around 2000. A Swedish producer called Oh My Greens has a 2,400 square meter Netled growing system, and larger units are possible depending on the customer’s needs and business case. There are various levels of automation which can include seeding, transplanting, spacing adjustment during growth and harvesting. There are also commercially available automation options for boxing, palletizing and wrapping. The plants are grown in mobile “gutters” each of which holds 45 plants (those are pressure washed and disinfected between uses). The fertilizer and water delivery for this system is a variation of the Nutrient Film Technique which is a hybrid of hydroponic and active substrate methods. This allows for cycling of the irrigation which saves water, helps aerate the roots, and reduces the cost of dehumidification. It also supports a community of beneficial bacteria. There are minimal pest issues with this enclosed system, and the root pathogen Pythium is eliminated by ozonation and UV treatment of the circulating water.

CEO Niko Kivioja points out that the Vera® system is unique in the way that it integrates the heating, cooling and dehumidification systems so that total energy is reduced to around 1/3 of that used in a standard greenhouse setting and also quite a bit lower than that required for some other vertical farming systems. The Vera® system uses CO2 supplementation with a liquefied source in amounts matched with the appropriate light intensity. This can lead to as much as a 50% yield boost. In terms of future cropping options, Netled is following various projects such as growing seedling trees using artificial day length extension to speed up development. Protein crops are also being extensively tested and may become options in around five years. Fodder crops are also of interest particularly as supplies have already been limiting in Europe because of the Ukrainian conflict.


The produce grown in CEA systems gets to consumers through various channels ranging from local specialty stores to national grocery chains to restaurants. One route is through on-line grocery shopping with home delivery. A company called FreshDirect was represented at the Indoor Ag Tech meeting by its Chief Merchandising Officer, Scott Crawford. The company currently serves the Northeastern US. It’s 600,000 square foot state of the art distribution center in the Bronx has 38 different temperature zones which allow it to hold produce and other perishable items at ideal temperatures. Their hold time is also typically shorter than that for normal retail grocery distribution chain based on their shortened supply chain. On the one hand, on-line marketing is at a disadvantage for produce because many consumers want to see and touch it before making their choices. However once a consumer has a positive experience in terms of freshness and taste they can become quite loyal to recognizable brands coming from CEA facilities. The relationship between FreshDirect and its suppliers is also positive in that the grower can get short term projections of demand based on already sold items. There are major food waste advantages to this extending to the consumer’s refrigerator (the customer specifies a 2 hour window for the delivery so that it will not be left outside). The online aspect of this channel offers greater potential for communication about the upsides of CEA, but FreshDirect’s customers don’t seem to have any negative perception of the idea of indoor production since quality is their main driver and a secondary driver is the concept of local/regional production.

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