Oishii has restructured its strawberry lineup, introducing new formats, price points, and packaging as it works to double its retail footprint from more than 300 locations by the end of 2026. The rollout introduces a Reserve and Premium grade distinction across its three signature varietals, the Omakase, Koyo, and Nikko Berry, and brings its lowest-ever retail price point to market.
Rita Hudetz, Chief Commercial Officer at Oishii, said the tiered structure came out of consumer research with a clear finding. “Our goal has always been to expand access to our products over time. We deeply studied the strawberry category to understand the challenges consumers faced,” she says. “Taste consistency was definitely a challenge, and something we feel we have always overcome, but we also learned that strawberries were a very stressful purchase due to the expense and risk of buying berries, which might go bad before they get eaten.”
Controlled environment agriculture (CEA) has made significant progress in producing strawberries commercially, but the industry is still trying to work out which berry crops might follow. Researchers and operators say the answer will depend on disciplined crop development, realistic economics, and systems designed around the biological needs of the plant.
That message emerged during a session titled “Beyond Strawberries: What Berry Is Next for CEA?” at Indoor Ag-Con, presented by Olivier Paulus, CEO and founder of Vertiberry; Paul Gauthier, Professor at Penn State University; and Eric Gerbrandt, Chief Science Officer at BeriTech.
Lessons from the CEA Strawberry Boom
Panelists emphasized that the rapid expansion of CEA strawberries over the past decade offers both valuable experience and cautionary lessons. While the crop has proven technically feasible in greenhouses and indoor systems, many early ventures struggled after scaling too soon. Echoing lessons learned across the CEA sector over the past few years, the speakers noted that future berry crops — including raspberries, blueberries, and other high-value varieties — will require a more measured development pathway. Pilot production, data collection, and incremental scaling were all stressed as important steps before committing to large commercial facilities.
Kyle Barnett, Conference Program Director, Indoor Ag-Con
Over the past month, I had the privilege of spending a concentrated amount of time in pre-planning conversations for Indoor Ag-Con in Las Vegas on February 11–12. These were not surface-level calls. They were working sessions meant to shape discussions that go beyond the usual talking points and actually serve operators and suppliers.
In every group, I asked for the same thing: be honest, address the elephants in the room, and focus on what people can actually act on when they go back home. By the end of the month, my head was spinning. Not from volume, but from how consistently the same themes kept coming up across different crops, roles, and geographies.
Each of these conversations generated meeting notes and transcripts. To step back and avoid over-weighting any single perspective, I used AI as a tool to analyze and organize those notes, looking for repeated patterns and shared concerns. The insights below are not AI conclusions. They are a synthesis of real conversations, filtered through experience and judgment. Names and companies are intentionally left out. This is about clarity, not attribution.
A few things became very clear.
The Industry Feels More Serious
There is noticeably less appetite for hype and far more focus on trade-offs, sequencing, and consequences. People are asking better questions. They are more willing to talk openly about what did not work and why. That shift showed up across nearly every conversation and is reflected directly in how Indoor Ag-Con sessions are being framed this year, with more emphasis on execution, scaling discipline, and post-build reality. CEA feels less like it is trying to prove itself and more like it is trying to operate well.
Scaling Has Been Reframed
Across greenhouse and vertical systems, the message was consistent: scaling before operations are stable creates problems that are hard to undo. Facility size, location, labor availability, and market access are now being discussed as interconnected decisions rather than isolated ones. Bigger is no longer assumed to be better. Proven, repeatable, and financeable are carrying more weight. This mindset shows up clearly in sessions focused on facility design, expansion timing, and responsible growth.
Technology Is Finding Its Proper Place
The conversations shaping sessions on integration, automation, AI, and data were far more grounded than in past years. Operators are not looking for more dashboards. They want fewer tools that actually help them make decisions, reduce labor strain, or manage risk. AI came up often, but almost always with its limits clearly acknowledged. Useful when paired with good data and sound agronomy. Risky when positioned as a shortcut around experience. That realism is guiding how AI-related discussions are being handled at the show. Technology is still important. It is just no longer the headline.
Labor and Culture Are Now Central
Labor was raised in almost every conversation, often before yield or technology. Staffing challenges are no longer being treated as temporary. They are structural. Facilities are being designed and redesigned around workforce realities, training capacity, and management bandwidth. There was also strong alignment around culture. Systems introduced without grower buy-in tend to fail. Tools designed without operator input tend to be ignored. These realities are shaping sessions that focus on operations, leadership, and the human side of CEA.
Crops Continue to Act as Reality Checks
Leafy greens continue to expose pricing pressure and overproduction risk. Cannabis conversations have become notably more pragmatic, with open acknowledgment of complexity, climate mistakes, and labor misalignment. Strawberries and berries keep pushing back against automation narratives, reinforcing the need for deep plant knowledge and airflow mastery. Specialty crops, including mushrooms, consistently highlight that market development often matters more than production capability. These crop-specific realities directly informed how tracks at Indoor Ag-Con were built this year, with less emphasis on novelty and more on fundamentals.
Market Reality Is Driving Discipline
Pricing, commoditization, and distribution came up as often as production. Yield alone is no longer being mistaken for success. Operators are talking more openly about differentiation, channel strategy, and demand alignment. Several sessions at the show are designed specifically to confront these issues directly rather than dance around them. Market awareness is no longer optional. It is foundational.
Why I’m Optimistic
Despite all of this, the dominant feeling coming out of these conversations was not pessimism. It was clarity. There is more honesty now. More shared learning. More willingness to say what does not work and move forward anyway. That is exactly the tone these Indoor Ag-Con discussions are meant to set. This past month did not feel like an ending for CEA. It felt like a reset that needed to happen. And based on what surfaced in these conversations, the industry is stepping into the next year with clearer eyes and stronger fundamentals.
Indoor Ag-Con, the largest trade show and conference for the greenhouse, controlled environment agriculture and vertical farming industry, has unveiled its 2026 Conference Program featuring an all-new lineup of nine crop and sector tracks along with a speaker roster that is growing daily.
Returning to the Westgate Las Vegas, February 11-12, 2026, the 13th annual edition of Indoor Ag-Con will once again unite growers, business leaders, suppliers, policymakers, academics/researchers and other industry members from around the globe to explore the latest trends, technologies, and opportunities shaping the future of controlled environment agriculture (CEA).
The expanded 2026 conference program introduces dedicated tracks for:
Lettuce/Herbs
Vine Crops
Mushrooms
Berries
Cannabis
Conventional Agriculture
Unique Approaches to CEA
General Applications
Expo Theater Sessions (on the show floor)
The tracks will feature presentations, panels, and fireside chats offering practical, actionable takeaways for operators, investors, and innovators. The Expo Theater sessions, located on the show floor, will spotlight timely discussions on cybersecurity threats in CEA, AI-driven automation, smart system integration, crop diversification strategies, and real-world production insights from leading growers.
In addition to the track sessions, the 2026 program will showcase headliner keynote presentations — to be announced soon — spotlighting influential leaders who are shaping the future of food, farming, and technology.
“The conference program is truly the heartbeat of Indoor Ag-Con,” said Brian Sullivan, CEO, Indoor Ag-Con. “Each year, we build our educational content around what growers and operators tell us they need most — real-world solutions and practical insights they can take back to their businesses. With our 2026 program, we’re expanding that mission by adding more depth across crop types, introducing new technology discussions, and bringing in fresh voices that reflect where the industry is heading next.”
Complementing the robust education program, the Indoor Ag-Con Expo Floor continues to deliver one of the industry’s most comprehensive marketplaces — featuring top brands and innovative newcomers showcasing cutting-edge products, technologies, and services across lighting, climate control, automation, substrates, irrigation, facility design, and more.
Attendees can also look forward to exceptional networking opportunities — from breakout sessions and daily lunches to the show floor happy hour and Wrap Party celebration — designed to foster meaningful connections and industry collaboration.
Early Bird registration is now open. To register and learn more about conference sessions, exhibiting suppliers and networking opportunities, visit www.indoor.ag
About Indoor Ag-Con
Founded in 2013, Indoor Ag-Con is the largest trade show and conference for greenhouse, controlled environment agriculture and vertical farming. The event covers all crop types and brings together growers, tech providers, researchers, and business leaders to explore trends and innovations shaping the future of food production. For more information, visit www.indoor.ag
When we hear about Total Controlled Environment Agriculture (TCEA) and strawberries, there is a big buzz and excitement surrounding it. This is because TCEA is a somewhat costly agri-technology, requiring significant investment and precision, and strawberries as a crop need loads of TLC. While early adopters of vertical farming/TCEA focused primarily on leafy greens and microgreens, growers seeking high-profitability crops have turned to strawberries as a promising option.
Strawberries in TCEA: An Opportunity for Year-Round Production
Strawberry consumption could be year-round, but due to climatic restrictions such as temperature, humidity, and sunlight availability, it is not always possible. TCEA solves this problem by ensuring continuous production, making fresh fruit available regardless of geographic location and season. At the same time, strawberries offer a strong diversification option for vertical farming companies looking to expand beyond greens.
Challenges and Failures in TCEA Strawberry Production
Ferme GUSH farm; Montreal based, pesticide-free TCEA strawberry farm using substrate-free cultivation method.
While the potential for strawberries in TCEA is high, there have been significant failures among new entrants. Many startups enter the industry with ambitious goals and high expectations but fail to achieve them because they neglect the advice of horticulturists, plant scientists, and experienced strawberry growers. Often, the neglected advice relates to infrastructure (growing system) and tech decision-making (HVAC, LEDs etc), but also plant-related decisions, such as what type of soilless method will be used (substrate, NFT, etc.) and what pest management plan will be followed (use of only bio-control or also conventional pesticides), among many other factors.
Strawberries may seem like an ideal candidate for vertical farming due to their plant structure, but their infrastructure requirements, environmental control needs, and necessary husbandry practices differ significantly from leafy greens and microgreens. Underestimating these differences has led to many unsuccessful ventures.
Often, new entrants into vertical farming come from engineering or financial backgrounds and assume that growing plants follows simple mathematical equations. However, biology does not work like engineering—in any biological process, 1 + 1 does not always equal 2; sometimes it equals 0.5, and other times it equals 4. Many engineers struggle to understand the deep impact environmental factors have on plant performance, and those who fail to recognise the variability of biological systems often fail in strawberry TCEA production. This reinforces the need to consider the expertise and advice of plant scientists and experienced growers.
Cultivar Selection vs. Crop Management x Environment
A common question in the industry is: “What is the best cultivar to grow in TCEA?” Many people assume that cultivar selection is the most important factor, but they forget that genetics alone do not determine success.
The management of the crop and the environmental conditions impact gene expression, yield, and fruit quality. Even if growers select a high-yielding, high-brix cultivar, it will not perform well unless environmental conditions, crop care, and husbandry practices are optimised. Strawberries, unlike leafy greens, require much more in-house experience to detect early issues before sensors pick them up.
KropAI, an India-based startup, expanding its focus beyond leafy greens and microgreens to explore strawberry cultivation.
Advice for Startups: Rather than focusing solely on cultivar selection, new entrants should work with any strawberry variety available to them at the time, consult their propagators and suppliers, and prioritise obtaining healthy, high-quality plants—even if they are not the ideal variety at first. If startups discuss their specific TCEA system with suppliers, they can receive the best possible plants based on availability. Once major management and environmental factors are finalised, then it is the right time to focus on cultivar selection.
Pollination in TCEA Strawberry Cultivation
Pollination presents a frequent challenge in TCEA strawberry farming. In polytunnels and glasshouses, growers rely on natural pollinators or commercially supplied bumblebee hives. However, in TCEA environments, where LEDs are the sole source of lighting, pollination strategies must be carefully managed.
Many growers struggle with using bumblebees in TCEA, despite the fact that the absence of UV light is not necessarily a limiting factor. However, bee well-being and factors such as dawn and dusk lighting conditions, hive placement, and transportation play a major role in pollination success.
Additionally, multi-focal artificial light sources can trigger object-avoidance behaviour in bumblebees, making them expend extra energy as they mistake static objects for moving ones. This results in energy loss and premature bee deaths.
While many growers have successfully integrated bumblebee pollination into TCEA, variability of hive “personality” (yes; they have personality) and delivery conditions remains an uncontrolled factor. Alternative pollinators, such as hoverflies, offer promising solutions but are not yet widely available commercially.
Energy Challenges in TCEA Strawberry Production
Energy costs remain one of the most significant challenges in TCEA strawberry production. Running a fully controlled environment requires high electricity consumption, particularly for LED lighting, climate control, and dehumidification systems. These energy demands make production expensive, particularly in regions with high electricity prices.
FlexFarming grow room implementing the “Farm-as-a-Battery” concept, dynamically adjusting energy consumption in response to next day’s energy prices.
To mitigate these costs, some growers are exploring alternative and renewable energy sources, such as solar, wind, and geothermal power, to reduce reliance on grid electricity. Additionally, energy brokerage deals and dynamic pricing models—where growers adjust their energy consumption based on fluctuating electricity prices—are being tested. However, the long-term impact of adjusting energy inputs on fruit quality, yield, and consistency is still unknown. Finding the right balance between energy efficiency and crop performance remains a key research priority.
More development in energy sourcing is needed before TCEA strawberry production becomes widely profitable, apart from regions where energy prices are already low. Investments in energy-efficient technologies, such as advanced insulation, heat recovery systems, and smart climate control algorithms, will be crucial to improving the economic viability of TCEA strawberries in the future.
The Challenges of Strawberry Propagation in TCEA
Strawberries are traditionally propagated asexually through runners to maintain genetic consistency. However, this propagation process has traditionally taken place outdoors, where plants pick up pests and diseases that later enter growing systems.
For TCEA growers, maintaining a pesticide-free environment is a priority, making young plants with inherited pest and diseases a major issue. While propagators do their best to supply clean plants, the problem is systemic throughout the industry, as plants are grown outdoor in soil and sand.
To address this, the industry is exploring propagation alternatives, including:
Asexual propagation using tissue culture plants as starting material for mother plants.
Tissue cultured plants used as fruiting plants, bypassing the mother plant stage.
F1 hybrid seeds as an alternative propagation method.
Strawberry propagation in TCEA at Niab, UK; using the mother plants, harvesting daughter plants from runner and growing them in TCEA until ready for chilling. Part of a £1.8M, 3-year Innovate UK consortium project exploring the potential of TCEA for high-health plants.
While these methods hold promise, each requires specialised knowledge and infrastructure. New startups should avoid getting involved in propagation initially, as it is far more complex than fruit production and could overcomplicate operations in the early stages.
The Future of Strawberries in TCEA
Many companies are now successfully growing strawberries in TCEA, but approaches vary:
Commodity markets: Large-scale strawberry production for supermarkets, aiming to compete with glasshouse-grown strawberries.
While it is possible to grow strawberries profitably in TCEA, gaps in industry knowledge remain. Many new entrants seek specific growing parameters, such as light spectrum, intensity, and photoperiods. However, this data is scarce, as most strawberry cultivation research has been done in polytunnels and glasshouses, or not done at all, as the knowledge of the effects of light on plants was not a very useful thing to know, or they could not really do anything even if they knew more about it.
Japanese cultivars propagated and grown for fruit at Aloalto’s facilities in Barcelona, supplying high-end strawberries directly to restaurants and consumers.
Bridging the Knowledge Gap
Key gaps in scientific knowledge regarding strawberry cultivation include:
A deeper understanding of light requirements across different cultivars, including photoperiod, light intensity, spectrum, and how these factors change throughout developmental stages.
The precise chilling requirements for each individual cultivar.
A detailed understanding of the specific environmental conditions necessary to trigger flower initiation in different cultivars.
Since most historical research has focused on sunlight-grown strawberries, the industry must invest in new studies to gather this crucial information. However, startups are not those to have to conduct such research, as it requires rigorous experimental design, data collection, and significant resources. This is an area where larger research organisations must step in, with potentially public funding.
Final Thoughts
There is a growing movement toward TCEA strawberry production, both for fruiting and propagation stages. However, to ensure long-term success, new entrants must learn from past failures. By consulting plant scientists, embracing biological variability, and avoiding over-reliance on engineering solutions, while addressing energy challenges, the industry can make TCEA strawberries a widespread success.
If startups trust plant scientists and experienced horticulturists, rather than solely relying on financial models and engineering logic, TCEA strawberries will become far more successful than they are today.
About InnoPhyte Consulting
InnoPhyte Consulting, founded by Katia Zacharaki, is a dynamic firm dedicated to advancing AgriTech innovation, with a strong background in Total Controlled Environment Agriculture (TCEA), particularly for greens and strawberries. InnoPhyte offers a unique “Science-as-a-Service” approach, providing flexible support to companies with their research needs, data analysis, report and presentation creation, grant writing, market analysis, LCAs and project management. Specialising in assisting small and medium enterprises, InnoPhyte helps bridge the gap between scientific expertise and practical application, driving success in the AgriTech sector. Visit InnoPhyte.co.uk or email us at hello@innophyte.co.uk.
Strawberry plants growing in Nourse Farms’ North Carolina greenhouse location.
“Let’s be honest: agriculture isn’t the industry for someone who likes a sure thing,” said John Place, Nourse Farms CEO. “There are many factors beyond the growers’ control that influence outcomes, such as extreme weather and disease pressure—2024 made that abundantly clear. But by staying ahead with proactive risk management, we can help the industry succeed.”
One of the biggest topics in the strawberry industry right now is the outbreak of Neopestalotiopsis (Neo-P), a fungal pathogen that has gained attention due to its rapid spread in certain regions, which has the industry on high alert. Neo-P has impacted thousands of growers across North America, causing shipments to be canceled and many growers to abandon strawberry-growing plans this season. As a leading North American berry plant propagator, Nourse Farms isn’t letting Neo-P stand in the way of providing high-quality plants to its customers.
Nourse Farms is focused on investing in innovative propagation techniques that mitigate disease risks while enhancing overall plant quality. Place recognizes the importance of providing customers with plants that are not only healthy but also free from the risks associated with diseases like Neo-P.
Pictured are strawberry plants growing in Nourse Farms’ North Carolina greenhouse location.
“It starts with our virus-indexed tissue culture mother plants, which has been a hallmark of our organization for decades,” said Place. “By propagating mother plants from tissue culture and growing our tray plants in a controlled environment, we are providing the best possible plants to our customers. We believe the strawberry plants should be grown in a controlled environment. By growing our tips in a high-tech glasshouse, we keep the mother plants clean—thus keeping the runner tips clean.”
Nourse Farms prides itself in its stringent quality control processes, which are designed to ensure the plants are in the best position to meet the highest standards of cleanliness and health. Nourse Farms’ unique process allows the organization to maintain control over every stage of plant production. This holistic approach enables Nourse Farms to respond swiftly to industry challenges, innovate continuously, and deliver exceptional plants that meet the ever-evolving needs of growers.
Nourse Farms strawberry plug plant showing off strong roots.
“With unpredictable weather patterns and emerging disease pressures, controlling our propagation process is essential,” said Place. “While there’s no single solution to eliminate all of the risks that we face as an industry, our integrated approach means we’re not just reacting to challenges; we’re leading the way in overcoming them, ensuring that our customers receive the highest-quality plants that are ready to get to work in their fields.”
About Nourse Farms
For over 90 years, Nourse Farms has been a trusted producer and supplier of premium quality small fruit plants. Dedicated to providing clean and highly productive plants to national and international commercial fruit growers, home gardeners, and resellers, Nourse Farms stays at the forefront of industry advancements by continuously identifying and testing new varieties and growing techniques. With locations in Massachusetts and Washington and a new site in North Carolina, Nourse Farms is committed to delivering high-quality products and is poised for a future of growth and innovation. What began as a local strawberry nursery has blossomed into an internationally recognized nursery specializing in strawberry, raspberry, and blackberry plants, along with a variety of other premium plants. To discover more about Nourse Farms’ commitment to quality, innovation, and the future of agriculture, visit NourseFarms.com or call 1-877-NFBERRY (632-3779).
Oishii has announced that it will introduce its coveted Koyo Berry to Harris Teeter locations in the DMV (Washington DC, Maryland and Virginia), broadening its footprint along the East Coast. This news comes on the heels of Oishii’s expansion into Chicago.
The Koyo Berry – meaning “elated” in Japanese – was introduced in February 2023 and is marked by its red hue, sweetness, balanced acidity, and firm texture. Oishii Berries are grown in indoor vertical farms in the U.S. and are pesticide-free, non-GMO, and always in season.
Perfect for flavorful, everyday snacking, Oishii’s Koyo Berries are available for $9.99 MSRP for a standard tray – 11 medium berries, or 8 large berries.
In this Q&A following his keynote address at last week’s Indoor Ag-Con 2024, “Indoor Farming – The Next Revolution In Agriculture,” Adam Bergman, Global Head of AgTech Investment Banking for Citi, sheds light on the promising trajectory of indoor farming despite the challenges encountered in 2023. He discusses the pivotal role of technology, financial strategies, crop diversification, funding opportunities, and strategic partnerships in propelling the indoor farming sector towards a sustainable and prosperous future.
Q: In your keynote, you talked about the promising future of indoor farming despite setbacks in 2023. Can you elaborate on specific strategies and/or innovations that you believe will drive the rapid growth of indoor farming, especially in the context of the mega trends of food security, sustainability, and health & nutrition?
A: Food security, sustainable food systems, and health & nutrition are the biggest drivers of indoor farming. Food security initially spurred on indoor farming because of the supply chain disruptions caused by the Covid pandemic and Russia’s invasion of Ukraine. As a result, the trend toward food globalization that started following World War II has gone into reverse. In the past few years, a growing number of countries, especially those in the Gulf Cooperation Council (GCC) that generated a huge amount of money during a period of high energy costs, speak more about food self-sufficiency and the role of indoor farming. Indoor farming is attractive to the GCC, because they do not have enough arable land and/or an optimal climate to grow outdoors.
As climate change persists, conditions are getting harsher for outdoor farmers, who are forced to deal with increasing weather volatility. Additionally, the global population is expected to reach 10 billion by 2050, which will necessitate roughly a 50% increase in the amount of food produced. Farmers, working with governments and NGOs around the globe, are going to need to figure out how to grow more with similar or fewer resources (chemical fertilizers, crop chemicals & pesticides, land, and water). Since indoor farms typically don’t use chemical fertilizers, crop chemicals or pesticides, and use significantly less land and water, they are a better solution for more environmentally sustainable agriculture.
The consumer also plays a key role in the food system. Previously, consumers were frequently beholden to CPG companies and retailers to purchase food. However, there have been significant changes in how consumers, particularly in the developed world, purchase food (direct-to-consumer, online purchases, food delivery, and meal kits), which is disintermediating many incumbents. Gen Z and Millennials especially are pushing back against industrial agriculture, which has played a large part in the ecological harm to soil and contamination of ground water, lakes, rivers, streams, and oceans, as well as damaging human health, as obesity rates have soared globally. Today, more consumers are demanding fresher, healthier and more nutritious foods that is grown sustainably. Indoor farms can be built on sites close to population centers, one advantage of which is having a much shorter supply chain. Consumers can buy produce that lasts longer before spoiling and indoor farmers can grow products for taste, texture, and nutrient density rather than yield and logistics, which are priority for outdoor farmers shipping across North America or around the globe. In total, these three mega trends of food security, sustainable food systems and health & nutrition are poised to have a significant impact in accelerating on the growth of indoor farming globally.
Q: Your extensive experience in Clean Energy Transition and AgTech investment banking positions you at the intersection of technology innovation and climate change. How do you envision technology advancements influencing the future of indoor farming, and what role can financial institutions play in supporting these technological innovations for sustainable growth?
A: Innovations in the greenhouse sector have accelerated over the past 150 years, with automation & robotics, building materials, digitization, more efficient water usage and improved energy efficiency all driving progress recently. The vertical farming sector is poised for similar transformational changes as LED light technology advances, and seed genetics are optimized to grow plants under various light spectrums. Once more indoor farms get to a point where key risks have been mitigated (financial performance, including positive EBITDA, multiple farms operating at full capacity, project developers with a strong track-record, and customer off-take agreements), financial institutions can play a significant role in financing new indoor farms, similar to the role they played in the growth of solar and wind projects. Once bankruptcy risks for indoor farming companies and projects are substantially reduced, opportunities will open up for project finance with 70+% debt to develop indoor farming and cheaper capital from insurance companies and pension funds looking for strong, long-term cash-flowing entities.
Q: In your presentation, you touched on the expansion of crop production into areas like higher-margin produce, pharmaceuticals and specialty ingredients. Could you provide insights into strategic considerations for indoor farmers looking to diversify their crop portfolios, and what opportunities you foresee in these emerging markets?
One of the challenges many vertical farming companies face is high production costs. This is mainly due to limited production capacity and high capital expense and operation costs currently. As vertical farms continue to struggle to be cost competitive with outdoor grown produce and many greenhouses, it is extremely important to diversify away from leafy greens to grow other products that command higher prices. This is similar to the biofuels sector two decades ago, when various companies decided to compete against the commoditized fuel sector rather than specialty chemicals, which could be sold at a much higher price point. Those companies that tried to compete against commoditized fuels frequently went bankrupt as they were capital intensive and did not have the requisite scale or cost structure to be economic. Only those companies that focused on specialty chemicals were able to achieve a cost structure that made economic sense and, as they expanded and optimized production, were able to reduce costs and become cost competitive with more commoditized end-markets. Based on the trends I have seen, I believe the same thing will occur with vertical farms, which should look to provide a variety of products that can be sold at higher prices (berries, coffee, forestry, pharmaceuticals, specialty ingredients), and ultimately to achieve economies of scale and drive costs down.
Q: In the context of securing funding for sustainable growth in the indoor farming sector, you mentioned leveraging the USDA loan program and other non-dilutive sources of capital. Can you offer practical advice for businesses in the CEA industry on accessing these funding opportunities and navigating the financial landscape successfully?
The equity capital markets remain extremely challenging for most early- and growth-stage companies, with the traditional debt markets available for only a few of the largest, most profitable indoor farming companies. In challenging capital markets, it is more important that companies look for creative non-dilutive sources of capital. The two areas that show the most promise are government grants and government-backed loans. To this end, several companies have been able to secure state and local incentives to build new indoor farms in various locations throughout the US. Additionally, a growing number of indoor farming companies have accessed USDA loan guarantees. The advantage of loans associated with the USDA is they typically come at lower interest rates and frequently have lower covenants. Capital will remain one of the biggest obstacles for expanding indoor farming operations throughout North America and the rest of the world.
Q: Strategic partnerships play a key role in the success of companies in the indoor farming sector. From your perspective, how can companies best approach and establish meaningful collaborations with partners like crop input providers, suppliers, retailers and others to drive innovation and overcome challenges?
A: Like many highly capital-intensive growth sectors, indoor farming faces challenges in validating their business as a prerequisite to accessing capital, both equity and debt. In particularly difficult capital markets, strategic partners provide a means of validation for investors. It is also equally important to establish relationships with key customers, both food service and retailers. Finally, to be an attractive to potential investors, indoor farming companies need to be able to answer the following questions posed by investors:
1) What is your proof that you can build an indoor farm and scale production?
2) Are there consumers who want to buy your products?
3) Will consumers buy your products at a price where you can generate positive gross profit and EBITDA margins?
Those companies with positive answers will find an increasing amount of capital availability for growth, whereas those that struggle, particularly to generate positive financial metrics, will find sources of capital limited.
From its beginnings as a local strawberry nursery in 1932, Nourse Farms has evolved into an internationally recognized soft fruit nursery. Indoor Ag-Con is pleased to have Nourse Farms as an exhibitor for our March 11-12, 2024 edition in Las Vegas. We had the opportunity to catch up with CEO John Place to learn more about the company’s rich history, exciting expansion plans, state-of-the-art tissue culture labs and greenhouses in this month’s CEA Q&A. Read on to learn how this industry leader is not only adapting to changing market dynamics but also shaping them, as Nourse Farms positions itself to meet the evolving needs of berry growers worldwide, especially in the controlled environment agriculture sector.
Nourse Farms has a rich history dating back over 90 years. Can you share some key milestones in the company’s journey and how these have shaped its commitment to innovation and quality?
Aerial photo of Nourse Farms Whatley, Massaschusetts location
With Nourse Farms being around for almost a century, we’re fortunate to have a number of milestones that emphasize our commitment to innovation and delivering quality. Some highlights include:
1932: The farm was established as a strawberry plant nursery
1978: Raspberry plants added to the product mix
1980: The first tissue culture lab built
1982: Customized cooling facility built, allowing for storage of dormant, bare root plants
2003: Blackberry plants added to the product mix
2019: The first commercial planting of tray plants (strawberries) and long canes (brambles)
2020-2022: The continued expansion of tray plants and long canes
Present: A major expansion of our lab, greenhouses, and growing facilities that is intended to not only increase our footprint, but also amplify our commitment to innovation, as we will be using cutting-edge technologies to help us grow the cleanest, highest quality plants possible.
The recent announcement about your expansion plans and partnership with an investment firm are exciting and significant developments for Nourse Farms. Could you elaborate on the strategic goals behind the expansion and how it positions the company to meet the evolving needs of berry growers worldwide, especially in the CEA sector?
Nourse Farms Mills River, North Carolina location
Nourse Farms has focused on delivering the highest quality plants and exceptional customer service to the berry industry for decades. We are sitting at a pivotal point in North American berry farming where consumer demand is growing alongside new production techniques that are game-changers to the industry. Our goal is to secure our position as the market leader in berry plant propagation in North America. With that in mind, we are making a significant investment in our growing facilities in multiple locations to grow the highest quality plants for our customers.
We will now be growing in three distinct climates (Massachusetts, Washington, and North Carolina) so that the variety selection and plant type we have for our customers is grown in the best climate for its purpose. The new tissue culture lab, greenhouses, tray fields, trellis fields, and cold storage are all a part of our process and are included in the upgrades we are making. We believe these strategic investments will position us to scale quickly and efficiently to meet the changing needs of the market.
With the upcoming modern tissue culture lab and greenhouses in Massachusetts and North Carolina, how do you envision these facilities enhancing Nourse Farms’ ability to innovate and provide top-quality plants to your customers? Are there specific technologies or practices you’re excited to incorporate?
Tissue culture and micropropagation have been a cornerstone of Nourse Farms since we built our first lab in 1980. We use these techniques to grow our clean foundation mother plants, from which we propagate. With our ability to do in-house virus indexing and eliminate thru heat treatment, we can ensure our mother plants are of the highest quality. This new lab is actually our fourth lab to be built and will give us not only significant production capacity beyond our current lab but will also incorporate automation throughout the facility to aid in producing consistent, efficient, predictable results.
You’ve mentioned that you believe the future of berry production will increasingly demand substrate-grown plants. Can you provide some insights into the advantages and innovations in your substrate production process that make this approach so promising?
Nourse Farms long canes
Over the last several years, we have been growing tray plants (strawberries) and long canes (brambles). We have learned a lot regarding growing systems, proper fertigation, timing of planting, and other important details to produce a plant that is fit for purpose for our customers. With this experience, we are now positioned to strategically scale this part of our operation to meet the growing demands of the industry and ensure that our customers will receive the high-quality plants they expect from us.
Now that we are growing in multiple climates, various plant types and varieties can grow in the optimal conditions that they require.
Variety development also plays a key role in the innovations that we are preparing for the market. We have been working with berry breeders around the world for decades in an effort to identify, import, trial, and then scale the best genetics for our customers.
As Nourse Farms continues to expand and innovate, what do you see as the most significant trends or opportunities in the controlled environment agriculture industry, and how is the company positioned to take advantage of these trends?
Berry consumers are demanding not only more berries but also higher quality berries. The strategic steps Nourse Farms is taking are a direct result of our response to the fact that berry production is moving from traditional outdoor growing areas towards indoor facilities near population centers. High-tech glasshouses and indoor vertical growing facilities require a plant type grown specifically for these high-capacity facilities to generate the return on investment that is required.
This is where the opportunity is for upstream suppliers like us. Our plants are grown specifically to meet this demand and give our customers the returns they need for their investments. The more growing we do—both of our plants and of our business—the more success for our customers.
Kate Spirgen, editor of Garden Center, Greenhouse Management & Produce Grower magazines penned a terrific recap. In it, she outlined five key takeaways from the panel touching on produce trends and business opportunities in the Covid crisis:
1. Berries are big on the horizon.
Panelists agreed that berries will be among the next hot items in CEA since growers can provide tastier options with longer shelf lives than conventional farms. “How variable is a strawberry’s taste when it’s conventional?” DiNovo asked. “You can have one that tastes fantastic and you can have one that tastes like dirt. You can have the same flavorful berry without Mother Nature wreaking havoc on it.”
Highly perishable items with complex supply chains are ripe for disruption, panelists said.
“What we’re interested in is beyond the shelf life, we want home life for the customers,” Verlage said. “We don’t want them to waste produce because it goes bad quickly.”
2. Create value by standing out.
From a marketing standpoint, DiNovo said indoor agriculture operations shouldn’t fight a conventional battle. By creating new names for products and branding them to stand out, growers can change the game.
“Create its own value by calling it something else,” he said. “If you call it by a conventional name, you’re going to compete on a conventional price basis.” The coronavirus has impacted everything from supply chains to shopping habits.
3. COVID-19 has increased consumers’ desire to keep money local.
DiNovo said the economic impact of the coronavirus has led to a greater demand to keep money in the local economy. this is true whether it’s spending inside the community or providing jobs.
“That’s what local means to me more than anything else — it’s local impact,” he said.
4. Labor and supply chain concerns could lead to opportunities.
Lightfoot said he sees an opportunity to promote safety due to a smaller supply chain. He added that the current salad industry has seen issues with safety in the recent past.
“One farm’s contamination could have a bigger impact since more products are coming into contact with each other,” he said, stating that a longer supply chain makes tracking more difficult. “Those structural challenges don’t exist in our model as they do in the incumbent supply chain model.”
Creating new names and brands for products can help your CEA operation stand out in the marketplace. The year-round nature of indoor agriculture could also give CEA operations a leg up on labor.
Farm labor shortages, which he said have worsened due to the current administration’s policies on labor and immigration, have only been made more difficult by COVID-19. Housing and transportation have left farm employees more vulnerable to the disease.
“When this is over, borders will probably be less open, not more, so this issue will probably become worse,” he said.
“That’s what local means to me more than anything else — it’s local impact,” said Alex DiNovo, president and COO of DNO Produce. CEA operations are better equipped to control entry to facilities. And, year-round labor provides more stability in the workforce.
5. Retailers are looking for the right size solution for their stores.
Verlage said Walmart is looking for ways to mix big and smaller growers since different growers will bring solutions better suited to different communities.
“We are trying to figure out what is the right size project for the demand we face in different stores,” he said. “It has to be affordable, good nutritious food so that we can help everyone enjoy healthy food.”
InnoPhyte Consulting, founded by Katia Zacharaki, is a dynamic firm dedicated to advancing AgriTech innovation, with a strong background in Total Controlled Environment Agriculture (TCEA), particularly for greens and strawberries. InnoPhyte offers a unique “Science-as-a-Service” approach, providing flexible support to companies with their research needs, data analysis, report and presentation creation, grant writing, market analysis, LCAs and project management. Specialising in assisting small and medium enterprises, InnoPhyte helps bridge the gap between scientific expertise and practical application, driving success in the AgriTech sector. Visit 
