Sector News

Ocado invests £17m in vertical farming, forms new joint venture

June 11, 2019
Food & Drink

Ocado has announced two investments totalling £17 million in vertical farming as it aims to become a leader in the emerging industry.

The British online grocer has completed the acquisition of a 58% stake in Jones Food Company (JFC), a vertical farm based in Scunthorpe, England, that currently produces leafy greens and herbs – and is expected to grow its capacity to 420 tonnes per annum.

With more than 5,000 square metres of production area, JFC has plans in place to expand crop types and production across the UK.

Ocado has also formed a joint venture called Infinite Acres with US vertical farming business 80 Acres Farms and Netherlands-based industrial systems provider Priva. Each partner will hold one-third of the joint venture’s equity.

Vertical farming involves the production of food in indoor facilities where crops are grown on a series of levels in a precisely controlled environment.

Ocado highlighted the sustainability advantages of vertical farming, including low water use, minimal land use and predictable yields of produce year-round.

“We believe that our investments today in vertical farming will allow us to address fundamental consumer concerns on freshness and sustainability and build on new technologies that will revolutionise the way customers access fresh produce,” said Tim Steiner, Ocado CEO.

“Our hope ultimately is to co-locate vertical farms within or next to our CFCs and Ocado Zoom’s micro fulfilment centres so that we can offer the very freshest and most sustainable produce that could be delivered to a customer’s kitchen within an hour of it being picked.”

JFC CEO James Lloyd-Jones said: “JFC is delighted that Ocado has chosen to partner and invest with us. We are certain that the combination of their world-leading logistics and automation systems coupled with our advanced growing technology will transform the way customers experience fresh produce – delivered fresh to their door a matter of hours from ordering.

“JFC has always been committed to minimising the environmental impact of agricultural production and we see this partnership accelerating our ambitious growth strategy to make a wider variety of vertically farmed produce available to even more customers. We are very excited and looking forward to a bold and ambitious future as part of the Ocado Group.”

Earlier this year, Ocado announced the creation of a new 50/50 online grocery joint venture with British retailer Marks and Spencer (M&S).

Under the deal, M&S is acquiring a 50% share of Ocado’s UK retail business for a total consideration of up to £750 million, including a deferred consideration of up to £187.5 million.

Source: FoodBev

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