Expanding Food Supply and Going Vertical
Examining Three Vertical Farming Shares Worth Investing in by 2025
As the global population surges, doubling food supply within the next three decades becomes a daunting task. Climate change, urban sprawl, and soil destruction shrink arable land, and forecasts indicate a 50% decline by 2050. This discouraging trend only makes the challenge more arduous.
Farmers are embracing vertical farming as a solution, cultivating crops in tower-like structures. Let's delve into some leading players in this promising sector.
Top Stocks in Vertical Farming
Vertical farming may seem like a new phenomenon, but it's an emerging area for investors seeking sustainable investments. Despite a few bankrupt companies, there are still compelling options in this nascent sector.
| Vertical Farming Stock | Ticker Symbol | Market Cap | Company Description || --- | --- | --- | --- || Local Bounti | NYSE:LOCL | $19.7 million | LBA employs Stack & Flow Technology, a hybrid of vertical farming and hydroponic greenhouse farming. || Village Farms International | NASDAQ:VFF | $89.9 million | Pioneering controlled environment agriculture with a diverse product portfolio. || Hydrofarm Group | NASDAQ:HYFM | $30.2 million | A key supplier of hydroponic equipment and supplies for the vertical farming industry. |
While these stocks may have modest current market caps, they play significant roles in the expanding world of vertical farming. Let's explore each in more detail.
(NYSE:LOCL)
Local Bounti - More than Greens
$19.7 million
Local Bounti is making waves in controlled environment agriculture with its hybrid of vertical farming and hydroponics, called Stack & Flow Technology. This process benefits consumers by producing healthy food in a sustainable and budget-friendly manner, using 90% less water and 90% less land compared to traditional farming methods.
The controlled environment agriculture company uses a hybrid of vertical farming and hydroponic greenhouse farming called Stack & Flow Technology.
The company specializes in living lettuce, herbs, and loose-leaf lettuce. With six operational facilities and over 13,000 retail partners, LBA is a force to be reckoned with in the market. Their investment in expanding capacity and innovation has expanded their total addressable market to more than $75 billion.
Village Farms - Pioneering Sustainable Agriculture
(NASDAQ:VFF)
Village Farms International was one of the first movers in controlled environment agriculture, boasting 30+ years of experience in the field. The company continues to innovate, with a focus on cannabinoid and related health and wellness markets.
$89.9 million
Village Farms grows produce on over 200 acres across the U.S. and Canada, with additional help from Canadian and Mexican producing partners and U.S. and Canadian distribution centers. The company strives to provide high-quality produce, selling under the Village Fresh Farms brand.
A pioneer in controlled environment agriculture.
Beyond its commitment to fresh produce, Village Farms also grows botanicals to produce cannabinoids for the U.S., Canadian, and Netherlands markets.
Hydrofarm Group - The Equipment Supplier
(NASDAQ:HYFM)
Hydrofarm Holdings is a critical player in the vertical farming industry, manufacturing and distributing equipment and supplies for the controlled environment agriculture market. The company's product lineup includes grow lights, climate control solutions, grow media, and essential nutrients. Hydrofarm Holdings primarily focuses on the wholesale market, servicing retailers from multiple U.S. and international centers.
$30.2 million
Hydrofarm Holdings has pursued growth through strategic acquisitions, adding complementary products to its portfolio. By targeting the fragmented controlled environment agriculture equipment and supply sector, the company aims to grab market share and supply the burgeoning vertical farming market.
A major manufacturer and distributor of controlled environment agriculture equipment and supplies.
The company has faced tough times in recent years, with sales slumping in 2024. In response, Hydrofarm Holdings undertook cost reductions and restructuring, focusing on selling higher-margin proprietary brands to narrow its losses and set itself up for long-term growth.
Investing in Vertical Farming Stocks
Vertical farming could play a vital role in meeting the world's growing demand for food while minimizing the impact on finite farmland resources. With the right strategy, investors can capitalize on this trend with promising companies like Local Bounti, Village Farms, and Hydrofarm Holdings. However, as with any investment, it is essential to acknowledge the inherent risks associated with the sector.
Enrichment Data:
Vertical farming is gaining momentum as a sustainable solution to meet the world's growing food demand, driven by factors such as climate change and land scarcity. Major players involved in this emerging sector adopt advanced technologies like AI, machine learning, and renewable energy to maximize crop yields and minimize environmental impact.
Top vertical farming companies, like Local Bounti, Village Farms International, and Hydrofarm Group, have our attention due to their innovative approaches to growing fresh produce, cannabinoid cultivation, and controlled environment agriculture equipment and supply provision. These companies also demonstrate commitment to sustainable and profitable business operations, making them attractive investment options in the fast-growing vertical farming sector.
In the context of investing, the fragmented controlled environment agriculture equipment and supply sector provides opportunities for growth through acquisitions, as demonstrated by Hydrofarm Group. By 2050, the challenge of doubling food supply due to climate change, urban sprawl, and soil destruction may be addressed through the adoption of vertical farming technologies like Stack & Flow Technology used by Local Bounti. Amid this landscape, cannabinoid cultivation and related health and wellness markets are being pioneered by companies like Village Farms International. The surge in global population necessitates innovative solutions in agriculture, making investments in sustainable agricultural technologies like vertical farming an intriguing prospect.