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Indoor Vertical Farming and Digital Transformation: A match made in heaven

JUN 08, 2023 | Suruchi Dhingra| Joydeep Bhattacharyya
region: ALL Agriculture, Forestry & Fishing Internet of ThingsArtificial IntelligenceAutonomous Robotic SystemsEdge Computing

In June 2023, Transforma Insights published a report, ‘Digital Transformation (DX) in the Agriculture Sector’, which primarily focused on how digital transformation technologies are changing the face of the agriculture sector. In that study we identify 9 key areas where disruptive technologies are being applied, as illustrated below.


In this blog, we discuss one of these areas, the notion of ‘Indoor Vertical Farms’ with a particular focus on the predominant technologies that are currently deployed, sustainability and business benefits.

What is indoor vertical farming?

The term ‘Indoor Vertical Farming’ refers to farms where crops are vertically stacked in layers so farmers can produce more food in the same amount of land as traditional farming. These farms typically don’t have location constraints so crops can be grown in places like shipping containers, warehouses, supermarkets or any place that would be otherwise unfit for farming.

Hydroponics is one the predominant growing systems in indoor farms today. In this system crops are grown using a water-based nutrient solution instead of soil. The second type of system is aeroponics where crop roots are suspended in air and nourished by misting with nutrients on a continuous basis. Aeroponics is relatively complex and it’s still in an emerging phase. There are only a few players growing crops using this technology, including AeroFarms and NeoFarms.

The combination of AI and IoT is critical for indoor vertical farms

The central idea behind indoor vertical farms is to use CEA (controlled-environment agriculture) technology to monitor and control the growth of crops. These days, most indoor farms use artificial lighting such as LEDs. Some of the emerging digital technologies that are being increasingly deployed in indoor vertical farms include AI, IoT, robotic automation, and drones.

Connected IoT sensors allow constant monitoring of environmental parameters, and using AI, the resultant data can be analysed. AI can also forecast crop requirements and AI algorithms can simulate plant behaviour to determine and define cultivation strategies, predict plant growth under diverse conditions and coordinate cultivation cycles with shipping schedules. Robots and automated machines can be deployed for harvesting, packaging the produces, disease detection, spraying, and pruning. In many indoor vertical farms, drones are used to capture images, which are then used for crop analysis.

Sustainability and business benefits of indoor farms

Indoor farming amalgamates sustainable practices and digital technologies to grow crops in controlled environments, allowing businesses to optimise resource utilization, lessen environmental impact, and ensure a consistent supply of high-quality food. Compared to traditional farming practices, indoor vertical farming has several benefits, such as higher yield from more harvests (since crops are stacked vertically and can be grown throughout the year), less water consumption, ensuring food security, and consistent crop production. To cite an instance, Nordic Harvest claims that, unlike traditional farms, in indoor vertical farms, plants can be harvested fifteen times a year.

In terms of sustainability, they use around 70-95% less water (by deploying hydroponics and aeroponics) and 90% less land than traditional farming, resulting in 20 to 40 times more food production. Besides, indoor vertical farming also reduces transportation-related emissions, as crops can be grown near where they’re mostly consumed, also implying fewer supply chain disruptions and food security issues. For instance, UrbanKisaan used hydroponics to grow saffron in unsuitable regions of Telangana, India, and compared to traditional farms, it produced 20 times more saffron in one-fortieth of the area.

In the context of business benefits, indoor vertical farms also require far less manpower, which reduces operational cost. To cite an instance, the smart indoor vertical farms in Fujian Province cover 5,000 sq. meters and produce 8-10 tonnes of vegetables/day while employing only 4 people to manage it, whereas a traditional farm requires around 300 farmers to produce the same output.

Diverse industry participants

The myriad of benefits of indoor farming has proven to be lucrative to big retailers, who have started investing in this niche. For instance, Walmart is investing in Plenty, Ocado is investing in Jones Food Co., and Infarm has partnered with more than 30 retailers. Besides, in a couple of cases, customers have integrated with agriculture firms to reap the benefits of indoor vertical farming. Case in point, ECO1 is a joint venture between Crop One and Emirates Flight Catering, under which, fresh greens from the farm will be supplied to Emirates’ flights.

Concluding remarks

Based on the comprehensive study of the digital technologies used in indoor vertical farming, it can be concluded that their integration is not only revolutionising the agriculture industry but also presents a promising way towards sustainable food production. By deploying advanced technologies and data-driven approaches, agriculture-based enterprises can achieve better results, optimise resource usage and contribute towards a more sustainable approach while fulfilling the increasing food demand.

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