Photo: Kroger
August 22, 2023
Is Kroger’s Expanded Vertical Farm Partnership a Sign of the Future?
Kroger is expanding the availability of vertically farmed produce across the Midwest and Southeast by extending its partnership with supplier 80 Acres Farms to about 1,000 stores. This wider reach could be a sign of the growing appeal products from vertical farms have for grocers thanks to their ability to grow locally even in urban areas, offer fresh fruits and vegetables year-round, and use more sustainable growing methods than traditional farms.
Kroger has sourced produce from 80 Acre Farms since 2019 and currently sells its products at 300 stores. The items, which include salad blends, herbs, and tomatoes, are all pesticide-free and sourced from production farms in Ohio and Kentucky. 80 Acres Farms is also preparing to open a Georgia farm — with plans to add more locations in the future — and to expand its selection at Kroger to include items like grab-and-go meals.
Research and Markets estimated that there were more than 2,000 vertical farms in the U.S. in 2019, and their popularity could continue to grow as interest in sustainability rises.
Kroger isn’t the only retailer that sees a future in vertical farming. Walmart has forged a relationship with Plenty Unlimited by making an investment and pledging to source leafy greens from Plenty’s Compton, California, farm for all of its California stores. Additionally, Giant Eagle offers vertically grown produce from Fifth Season at more than 75 stores.
A study by Glow found that one in two U.S. consumers say they’ve changed food and grocery brands recently based on their sustainability credentials, which could make these investments appealing to grocers looking to capture market share. Additionally, eight out of 10 consumers said that they would pay up to 5% more for sustainably produced goods, according to a survey by PwC.
Interest in sustainability is on the rise when it comes to food in particular. A 2023 survey by Kearney found that 42% of respondents said they always or nearly always consider environmental impacts when making a purchasing decision. This was a record high and up 18 percentage points from the firm’s 2022 survey. While produce from vertical farms is just hitting the mainstream, consumer interest could grow along with its availability.
Discussion Questions
DISCUSSION QUESTIONS: Do you think vertical farms will become mainstream in American grocery stores? Will Kroger’s expanded relationship with 80 Acres Farms give it an advantage on the sustainability front?
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Brandon Rael
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80 Acres Farms, which runs the vertical farming operation, is impressive. Its newest farm can supply up to 40 million servings of produce a year and uses far fewer resources and is pesticide-free. There are likely also some cost savings because the operation is more efficient. Because of all of these things I think this method of supply will become more common in grocery. It is also a partial antidote to the problems of more intense weather patterns which can have a very damaging impact on production and yields.
Imagine buying salad that has been grown on site. That would be amazing – a win-win – reduced cost of transportation, less waste and less environmental impact.
This could be the future if vertical farms are utilised by grocers.
Hugely exciting and of great benefit to the retailer as a differentiator but also to the consumer.
The advantages of vertical farming are well documented – less space, lower transportation costs, etc. Kroger is benefitting from the sustainability PR, yes, but they wouldn’t grow the partnership if it’s not also making financial sense to them. That’s the play and yes, these types of partnerships should grow across the country.
This is a brilliant move to vertically integrate your supply chain with sustainable, organic produce and other vertically farmed products. Locally grown and pesticide-free is the mantra of today and tomorrow. I don’t know if this gives Kroger an advantage over others, but it’s the right thing to do.
In fact, I wouldn’t be surprised to see Kroger and others start piloting vertical produce at its stores. Minimal real estate could be converted in the back room for lettuce, strawberries, herbs, etc. I could even see small-footprint verticals being brought inside the store in the produce section. It would certainly say “fresh” to their customers.
There are natural advantages to putting a farm right on top of a large-format store: great footprint for solar exposure, a cold chain and loading docks right below, ability to schedule activity off-peak, and metro-area scale distribution rather than continental. Poetic justice for a lot of good farmland that was paved over to end up as farmland again.
It feels like vertical farming, on a very broad scale, is only a matter of time. We are in a race with Mother Nature and climate change. It goes beyond sustainability. It goes to the ability to predictably manage the whole process. As we experience more and more serious weather events, vertical farming will make abundant sense. If California catches cold, the rest of the country catches pneumonia. And the swings of drought and rain in California suggest exploring alternatives…at scale.
We’ll see more of this vertical integration across grocery in the coming years. Last week, I attended a fundraising event for a local, urban-based vertical farm for special needs individuals and the vegetables this place produces are simply amazing. They sell to local grocers, their products are pesticide free, and they are expanding their business. I realize this is small potatoes compared to 80 Acres Farms, but this trend is here to stay.
With the relentless recent news cycles regarding climate change, and unprecedented natural disasters, it’s clear that consumers are taking a far more conscious approach to where they buy their food from. Conscious consumerism is on the rise, and buying from grocers with a more sustainability-first strategy can make even a small positive impact on the overall state of our world and our disrupted environment.
Vertical farming operations are a brilliant strategy, as 80 Acre Farms can produce up to 300 times more food than an ordinary farm. With 100% renewable energy. And 95% less water. The vertical farm operating model helps to mitigate grocers’ carbon footprints by eliminating over 500,000 miles of truck transport, avoiding 500,000 pounds of food waste, and helping to save 70,000,000 gallons of water. These statistics are eye-opening, to say the least!
Increasing the proportions of vertically farmed produce in their stores is a win-win for Kroger, Walmart, Giant Eagle, and their customers.
This is a great idea and Bravo to Kroger. Shoppers will love it, especially those who appreciate eco-consciousness and sustainability. Will other grocers follow? Hard to say.
It takes a commitment and resources. But the smart ones will follow.
Kroger’s expanded partnership with vertical farms could be a big step forward for sustainable agriculture. It’s great to see them investing in innovative ways to bring fresh produce to their stores. I think this could be the future of farming, especially as we look for ways to reduce our environmental impact. https://www-krogercomfeedback.com/