Reflections on impact, change and the future of Innovation in CEA by Dr Harry Langford

Published: March 21, 2024

As the Agri-Tech Centres gear up to start a new and unified era as UK Agri-Tech Centre, I have been reflecting on the last five years. I have had the privilege to lead on our innovation activity in Controlled Environment Agriculture (CEA).

Innovation Impact

Our aim has been to improve the scalability of UK CEA through innovation, exploring circular economy opportunities and routes to net zero, and ultimately building locally integrated food systems. To achieve this, we have engaged a highly innovative sector, from technology developers to systems integrators and growers, through meetings, sector events and membership platform.

These conversations have sparked ideas and over 40 projects have resulted to date, and show no sign of slowing. It is striking to note that we have collaborated on R&D that directly contributes to addressing nearly all of the major contributors to a CEA system’s carbon footprint: energy efficiency, nutrition, growing media, and infrastructure (we haven’t done anything specifically on transport). Kudos at this point must go to the wider ‘projects’ team, without which our successes wouldn’t have been possible, and to these innovative businesses for their drive and determination.

The impact that we have had is complex to understand and nuanced, especially given our relatively young age. However, it is inspiring to note that the collaborative R&D projects that we have helped businesses win, and subsequently delivered, have allowed some of these businesses to expand their workforces by upwards of 10 or 20 people. Only a handful of those projects have been centred within the greater London region, so we’re levelling up too.

A cursory glance across publicly available investment data reveals that these businesses have received over £35 million in private sector investment over the same period, though it is really in societal impact where I think the most significant value has been delivered. Whether it is novel substrates or irrigation technologies, these products are slashing their product carbon footprint and taken collectively, these technologies have the potential to reduce the carbon footprint of production by over 50% across most CEA production scenarios.

By making substrates thinner and lighter, or recycling nutrients from raw groundwater, transport volumes can be significantly reduced. Through precision control of lighting and/or irrigation, biofortification with vitamins or flavour enhancement support health and well-being outcomes. Adoption of these technologies within commercial production environments is upskilling and educating the next generation of horticultural growers.

Landscape change in Innovation

There is certainly an argument, however, that we are not innovating fast enough to deliver resilience for UK horticultural production.

Whilst horticulture is a dynamic industry, a perfect storm of energy and input price rises, combined with labour shortages and stiffening competition from overseas imports, has rocked the sector. A flurry of administrations has ensued, beginning with Sterling Suffolk Ltd, in March 2022, and affecting companies such as Madestein Ltd, InFarm Indoor Urban Farming GmbH (UK), OneFarm Ltd, and most recently, UK Salads Ltd in February 2024.

In the last two years, over 20 growers have quit the Lea Valley, for example, with glasshouses being put up for sale and with it becoming increasingly likely that land use change will significantly erode production capacity.

It’s not all doom and gloom though. Some of this administration has shifted into being merely consolidation, as Fresca Group (Thanet Earth) have acquired Madestein Ltd’s production facilities out of administration and Amberside ALP did the same with Sterling Suffolk Ltd, now trading as Suffolk Fresh Ltd.

What is clear here is that:

a) It is some of the more advanced, high capital-cost, facilities that have been placed under the biggest pressure

b) These glasshouse businesses, in particular, have remained viable to investment.

Point ‘a’ emphasises the need for either innovation to focus upon reducing the Capex and Opex of horticultural production, or the supply chain to bear more cost and enable greater gross margins for growers, or both.

Point ‘b’ emphasises, perhaps, that the competitive advantage of CEA production in terms of its control, automation and ability to produce at scale, is still well valued.

An erosion of the gross margin of production has, in some cases, prevented growers from investing in new technologies and infrastructure. In other cases, planning rules or blockages have prevented new production facilities from being constructed.

Due to compound sector challenges, we’re seeing a bit of a double-edged sword here. Having said that, investment in innovation within CEA has continued to be highly positive.

A 2021 assessment by CHAP and UKUAT found that there was over £492 million of publicly broadcast investment into the CEA sector between 2016-2021, of which 54% was focused on vertical farming and 46% was focused on greenhouse systems. Whilst investment has slowed slightly in recent years, it has certainly not ceased, and a good number of the innovative businesses that we work with have secured multi-million-pound investments during this period.

The Future of Innovation

One certain thing is if we truly want to address UK food security and support a ‘nutrition transition’ within a more localised UK food system, controlled environment horticulture will need to play its part, as its output per unit of land and degree of automation make it particularly valuable.

To offset imports in tomatoes, for example, would require an increase in planted area of over 150%, or equivalent innovation improvements to boost yield, extend season length or increase planting density; a significant opportunity for UK CEA. To unlock this value, we need an improvement in the business environment for CEA within the UK, to synergise with UK technology innovation, and allow this latest generation of innovations to be adopted, to benefit productivity, sustainability and resilience.

High-growth verticals for innovation in CEA have been automation, management & analytics, lighting and crop inputs, accounting for nearly two-thirds of global market growth according to some estimates. These verticals have been driven by technological advancements including LEDs, robotics, sensing and machine learning, overlain by a focus upon ‘data-driven growing’.

This ‘wave’ of innovation will continue. Driven by advances in robotics and AI, there are at least two other ‘waves’ of innovation that are emerging, driven to a greater extent by sustainability goals.

Combined, they give us three focus areas for CEA innovation:

  1. Robotics, automation & AI (including novel sensors, AI-powered dynamic growth environments, robotic crop work and smart whole-farm management)
  2. Sustainability & circular economy (including alternative infrastructure, sustainable/biological inputs, renewable/circular integration, and ‘direct capture’ technologies)
  3. Genetics & breeding (including breeding for automation, nutrition & high-value chemicals, speed breeding and crop diversification).

Interestingly, when surveyed, UK CEA stakeholders said that berries, pulses/legumes and brassicas were the likely growth areas for CEA production, and that there was a need to harness technical expertise across such diverse areas as plant science, software engineering, and bioenergy, so that the UK can fulfil its national and global potential.

There was strong consensus, though, that the UK market for CEA has a bright future. Provided a supportive CEA ecosystem can be maintained, to promote collaboration for both resilience and growth.

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