Situated in the midst of fertile farmland on the edge of the Romanian plain, Ploiesti is not an obvious place for a vast indoor farm. Yet the vertical farm recently set up by retailer Kaufland and the largest local grower of microgreens and aromatic herbs Ultragreens meets a need; it will supply customers of Kaufland hypermarkets in the area with fresh herbs and leafy greens. 

Ultragreens’ vertical greenhouse is one of a growing number being set up in Western and increasingly in Central and Southeast Europe as well to meet the continent’s year-round demand for fresh fruit and vegetables. Projects like this can be considered the pioneers of a new model of agriculture to feed the world’s growing urban populations as climate change takes its toll on traditional agriculture. 

Vertical farms use hydroponic technology – where plants are grown without soil – and plants are on shelves stacked on top of each other and lit by LED lighting. They have a much smaller carbon footprint than traditional farms, and building them close to the people who buy and eat their products is an eco-friendly alternative to the expensive and polluting practice of flying in seasonal produce from hotter climes. 

Ultragreens says its vertical farming technology uses 95% less water and 90% less transport compared to soil-based agriculture, and zero chemical pesticides. Before setting up the vertical farm for Kaufland Ploiesti, it installed modular hydroponic farming units for Kaufland and fellow retailers Carrefour and Cora with in-aisle micro-vertical farms in 25 locations across Romania.

The company says it is taking agriculture to “new horizons”. “Basically, we have engaged our business towards farm as a service, based on the requests and needs of the Romanian market. We have our proprietary vertical farm technology, developed by our R&D team, and currently we are scaling up production facilities in large farming units called GreenHubs,” Ultragreens’ marketing specialist Ioana Dumitriu told bne IntelliNews.

^{Ultragreens' vertical farm at Ploiesti, Romania. Source: Ultragreens.} 

Perfect conditions 

Leafood is based much further north, in Vilnius, Lithuania, where there is growing demand for leafy greens, almost all of which are currently imported. It plans to change that when it starts growing greens in a 4,000-square metre warehouse in the city from April 2023. The company is working with YesHealth Group, an industry leader in vertical farming. 

“By growing indoors in a controlled environment, we essentially create perfect growing conditions for leafy greens,” comments Valentinas Civinskas, Leafood’s CEO and founder.

He notes growing demand for high quality leafy greens. As incomes have risen over the last couple of decades, there is growing interest in healthy foods and people are prepared to pay more for quality.

“We are headquartered in Lithuania, where the majority of leafy greens are imported, and we observe that there is a high demand among consumers who are prepared to pay a premium price for high-quality, pesticide-free leafy greens that promise to significantly reduce carbon footprints,” said Civinskas. He believes that vertical farming can cover up to 10% of total leafy greens production in the coming 10 years.

Other companies active in the sector include GreeenTech, which develops and manufactures two types of urban vertical hydroponic farms. The company currently operates urban farms in Prague for its customers, who own the farms. GreeenTech’s biggest customers so far are retailer Albert (part of Ahold) and Radisson Blu hotels.

Slovakia-based Veles Farming, meanwhile, is in the process of launching its 150-cubic metre commercial-size prototype facility after raising €550,000 in seed funding. The next phase for the company, from the new year, will be to build a commercial farm on a 2,200-square metre plot. “We are focusing on growing high-end crops (saffron) and crops with added value (mushrooms and medical herbs),” CEO Miroslav Hroncek told bne IntelliNews. 

Environmental benefits 

Those in the industry list many environmental benefits of growing crops in hydroponic vertical farms. These range from cutting water use, eliminating the need for pesticides and keeping food miles down, as crops are grown close to their consumers. 

"By growing indoors, we will be able to control the environment and optimise plant growth. We will be able to offer local produce, all year round. We will significantly shorten the supply chain (less imports [means] less food waste and longer shelf life),” says Leafood’s Civinskas. 

“We will eliminate the use of pesticides and other harmful substances used in most of the current growing conditions. Vertical farming growing techniques are efficient with little to no CO2 emissions, no runoff. We will use up to 90% less water compared to traditional farming, contributing to reducing water scarcity in the world.”

GreeenTech’s founder and CEO Dmitrij Lipovskij also lists low energy and water consumption. 

^{A control panel at a GreeenTech vertical farm. Source: GreeenTech.}

“The benefits of vertical farming are that we have higher yields because we can stack the crops vertically and use the space more efficiently, we have no seasonal limitations and crops are growing faster,” says Veles’ Hroncek. “Overall we have higher control over the environment and we don't have to use any chemicals.” 

Agriculture is essential to produce the food we eat, but as an industry it is responsible for large amounts of emissions as well as pollution. Leafood cites data from the European Environment Agency which shows that around 450mn tonnes of CO2 equivalent, or 13% of global greenhouse gas (GHG) emissions, were attributed to agriculture in the EU27 countries in 2018. Methane and nitrous oxide emissions from livestock, manure management and fertiliser use account for the majority of GHG emissions in agriculture, the company said. 

“Traditional field agriculture poses five major problems: the land it occupies, the water it consumes, the pollution with fertilisers and pesticides, the carbon footprint of the logistics and the vulnerability to climate change. There is no doubt we need to grow smarter to overcome the crisis we are facing,” said Ultragreens’ Dumitriu. “The benefits of vertical farming include a much smaller footprint, less water usage, and no need for pesticides.” 

Climate change impacts traditional agriculture

Even in Central and Southeast Europe, a region with a strong agricultural sector, there is a need to import fruit and vegetables as growing conditions are not suitable year-round, and the region’s increasingly affluent and health-conscious population has become used to seeing out-of-season produce on supermarket shelves at all times of the year. 

“Food miles are another source of greenhouse gas emissions, and the present supply chain model is costly and ineffective for countries that depend largely on the importation of fresh, leafy vegetables for the majority of the year. The source region's farming circumstances and just-in-time logistics play a role in the food security of these countries,” commented Civinskas. 

“For nations in Europe to grow leafy vegetables year-round, controlled-environment agriculture offers a workable approach.”

A lot of the green vegetables and other produce such as soft fruits for the European continent are produced in the Mediterranean region.

Romania, for example, “imports products from baby leafs and herbs categories, precisely because it is poorly technological in this regard. The climate conditions do not allow 365 crops in traditional systems,” said Dumitriu. 

However, she stresses that vertical farms “can be used to grow a variety of crops all year-round, even in climates that are not traditionally favourable to agriculture.”

Worryingly, regions like the Mediterranean area that have traditionally supplied food to other parts of the world are now struggling to adapt to climate change. Hotter, drier weather is causing crop failures and there are mounting concerns about water security. 

^{Fruit trees in Morocco. This year's harvest was badly affected by drought.}

Central and Southeast Europe too have experienced increasingly severe droughts as the climate crisis deepens; summer 2022 saw a drought unprecedented in the last 500 years. Veles’ Hroncek warned that farms in the region “are facing droughts during summer time that are seriously affecting the harvest”. 

In snow and desert

The case for vertical farming is even stronger in parts of the world where it is hard to grow fresh fruit and vegetables at all, like the desert cities of the Middle East or those in north Kazakhstan or Siberia that are blanketed with snow for half of the year. 

There have been a series of investments into vertical farms in parts of Russia, several made in response to the pandemic’s disruptions to supply chains. The largest is the Skolkovo Foundation’s iFarm, a network of vertical farms across Russia that uses AI software to monitor its crops. Before Russia’s invasion of Ukraine, the project attracted $4.4mn in investments and there were plans for investments into EU markets, following on from existing projects in Finland, Andorra, Saudi Arabia, Switzerland and the UAE. 

Kazakhstan, meanwhile, has been investing into greenhouses to produce tomatoes and other crops for the capital Astana and other northern cities, but vertical farming has not yet caught on in Kazakhstan; contacted by bne IntelliNews, the Greenhouses Association of Kazakhstan pointed to just one of its members who is growing strawberries vertically.

Companies from the CEE region also recognise the potential for growth in markets like the Middle East, where it’s not possible to grow green vegetables by traditional methods. As GreeenTech’s Lipovskij pointed out, “Of course there are regions such as the Middle East (UAE, Qatar, Saudi) or large urban cities where fresh crop is a pretty rare thing, so these cities/countries are able to pay for this ‘exclusive’ product.” Accordingly, the company’s plan for next year is to develop a distributor chain around the Europe and Middle East.

Leafood also has ambitious expansion goals. Its future plans involve expanding at the current facility as well as abroad by building local vertical farms.

Just the beginning

The companies interviewed by bne IntelliNews are currently mainly focussed on leafy greens, but say there is potential to grow other types of crops too. 

Commenting on the type of food that can be grown in a vertical farm, Dumitriu said: “From leafy greens, microgreens, strawberries and tomatoes to classic salads, there is a very large range of produce that can be grown in a vertical farm as well, or even better.”

GreeenTech provides “some types of herbs which are pretty hard to grow traditionally”. Lipovskij also said the company is “able in very quick time to develop a process to grow new crops which we haven´t grown before. For example, we are working on spinach or some Japanese greens; it takes just four months for us to launch it to the market.

“These alternative ways of food production could be definitely game changer in upcoming years,” he adds. 

^{Lettuces grown at a GreeenTech vertical farm. Source: GreeenTech.} 

Veles’ Hroncek pointed out that certain crops are economically viable, namely crops like microgreens, simple root system crops, fruit, leafy greens and flowers. However, the company is keen to move to a new level, namely growing cereals and crops with more complex root systems. 

While companies list the reduction in food miles as among the greatest benefits of vertical farming, Hroncek also believes the CEE region can become a supplier to other parts of Europe – similar to the way it has become a near-shoring hub for the IT and car parts industries. 

“The rationale to invest in vertical farming in our region is simple: we have cheap labour, so the overhead costs here are much lower than in the West. Our company started in the Netherlands where we obtained most of the knowledge and saw the barriers to entry like rent costs, labour, development costs and utilities,” said Hroncek. 

“Slovakia is in the European Union so the whole EU market is open for us and with saffron production, we want to focus on the Swiss and German markets.” 

With the world’s population (albeit not that of Emerging Europe) set to continue growing for decades, and climate change steadily undermining food security, hydroponic vertical farms will become an important way to help supply that population with the food they need. Rather than the traditional model of food being shipped into cities from the countryside, future cities can be expected to produce at least some of their own food from huge vertical farms using new technologies.