“Too many vertical farms have been built on an unsustainable business model”

The early promise of vertical farming to reshape food systems has collided with harsh economic realities. While early ventures won headlines and high-profile investments, recent news revealed mounting losses, hampered by capital-intensive infrastructure, long payback periods, and limited product diversification.

For Kirk Siderman-Wolter, Co-Founder and Director of Take Root Bio Technologies, the root of the problem is clear. “Too many vertical farms have been built on an unsustainable business model,” Siderman-Wolter says. “In much the same way that a healthy diet requires diversity to nourish the body, a resilient vertical farm needs multiple revenue streams to sustain its operations.”

One crop, too many risks
Most commercial vertical farms today rely on a single-crop system, typically leafy greens or herbs. These crops grow quickly in controlled environments and are easy to standardize. “There can be a focus on leafy greens like lettuce or basil and microgreens because they grow quickly with predictable yields,” Siderman-Wolter explains. “But these crops are often selected based on modeling projections rather than market realities. When saturation or price volatility hit, the model collapses.”

What’s more, these facilities often require millions in upfront investment, without corresponding diversity in returns. “The combination of limited crop diversity and high fixed and variable costs makes for a less viable business model, especially when customer preferences shift, supply chains are disrupted, or competition increases.”

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