CULTIVATD RESEARCH
What is Causing Indoor Farms to Fail? [REPORT]
In this research report, we identify the leading causes of indoor farm failures and offer recommendations for overcoming the challenges and obstacles facing growers and operators.
DISCOVER WHY INDOOR FARMS ARE FAILING
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EXTERNAL PRESSURES ARE HAVING A PROFOUND EFFECT
In 2021, Controlled Environment Agriculture (CEA) startups saw an 86% increase in investment, raising approximately US$1.6 billion globally through 70 investments. In the same year, indoor farming saw seven exits with an estimated loss of US$737.1 million. 2022 has seen a similar rate of failure, with industry leaders like Fifth Season, Plantise, Glowfarms, and Agricool, turning off the lights.
Recent closures suggest that “external pressures” linked to the macroeconomic environment, such as rapidly increasing energy costs and rising wages, are profoundly affecting the financial performance of most indoor farming facilities. Furthermore, these challenges are compounded by intensifying systemic risks, including rising debt levels.
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“Problems with performance, slower-than-expected adoption, or a failure to deliver financial returns in the time anticipated, all lead to missed expectations and disappointment.”
- Gartner Research