Commercial-scale urban agriculture presents opportunities for grocers to benefit from multiple revenue streams, while hedging against uncertain climate futures and meeting consumer demand for locally grown, organic food.
With changing global climates, securing a stable supply chain of fresh produce has become more costly: Unpredictable seasonal rains pose threats to regular crop yields; and rising fossil fuel costs threaten to increase already large transportation costs. Because of consistent demand, transportation costs to fly or truck food in from warmer climates to cooler ones can add up to 40% of total costs, as an Oliver Wyman analysis shows.
In the US, it is estimated that 10% of the national energy budget is dedicated to “bringing food to our tables.” In Europe, the European Commission found that up to 39% of food is wasted during processing and distribution, waste that could be minimized and controlled by the retailer if brought in-house. Agriculture is typically far removed from urban settings, further adding costs, time, and shrink to the produce journey.
At the same time, consumers across the globe are changing buying habits. They are showing an increased awareness of the quality and healthiness of the food they consume, and they are conscious of the environmental impact, especially of the food miles their dish travels before reaching their tables.
Rooftop Farms Bring Farming Closer to the City
Rooftops provide an excellent opportunity to bring farming closer back to the city and to further develop urban agriculture around, and occasionally in, densely populated cities. Rooftops present prime real estate for building integrated agriculture solutions, specifically rooftop greenhouses, where farmland may be expensive, or even non-existent.
Rooftop greenhouses typically run on a hydroponic system (aeroponic and aquaponic systems have also been effective). A hydroponic agriculture system requires little to no soil – making rooftops a feasible location for commercial-scale farming. Nutrient-rich solutions are delivered to the plants, which sit in beds of inert materials.
“Hydroponic agriculture is extremely resource-efficient,” explains Paul Lightfoot, CEO of BrightFarms in New York. “Farms are designed to conserve land, water, and eliminate agricultural runoff. As urban greenhouses benefit from year-round growing, they provide more cumulative yields per acre than conventional agriculture. For example, a one acre farm can put out as much as 500,000 pounds of fresh produce per year and feed more than 2,500 people.”
Grocers who integrate and grow their own produce on rooftop farms and at local distribution centres can benefit from multiple revenue streams, reducing costs by at least 37%, according to an Oliver Wyman analysis.