Ocado has today announced twin investments which it said will enable it to “become a leader in the newly emerging vertical farming industry”.
The grocery etailer has signed a memorandum of understanding with 80 Acres Farms and Priva Holding to form a joint venture called Infinite Acres designing “turnkey solutions” to vertical farming clients.
The retailer said vertical farming “involves the production of food in indoor facilities where crops are grown on a series of levels in a precisely controlled environment” that produces crops with “low wastage, very low water use, minimal land use and no pesticides” compared with traditional farming.
Priva is a Dutch horticultural industrial systems provider, while 80 Acres is a vertical farming business based near Cincinnati, Ohio. The two have been working together for four years and are expected to generate revenues of $10m (£7.8m) this year.
Each partner will hold a one-third stake in the joint venture, and Ocado said it expected the transaction to be completed by June 30.
It has also completed the acquisition of a 58% stake in Jones Food Company, which operates Europe’s largest operating vertical farm in Scunthorpe.
Ocado said JFC’s vertical farm has the capacity to grow 420 tonnes of leafy greens and herbs for the UK market a year and has plans to expand both the number of crops it grows but also its production across the UK.
The two deals represent a £17m investment by Ocado in the vertical farming space.
Boss Tim Steiner said of the twin deals: “We believe that our investments today in vertical farming will allow us to address fundamental consumer concerns on freshness and sustainability and build on new technologies that will revolutionise the way customers access fresh produce.
“Our hope ultimately is to co-locate vertical farms within or next to our CFCs and Ocado Zoom’s micro-fulfilment centres so that we can offer the very freshest and most sustainable produce that could be delivered to a customer’s kitchen within an hour of it being picked”.