Ocado to invest £17m in high-tech ‘vertical farms’ to grow produce near distributors

(qlmbusinessnews.com via theguardian.com – – Tue, 11th June 2019) London, Uk – –

£17m investment includes formation of venture to develop systems to sell to other retailers

Ocado is investing £17m in high-tech farming with the aim of growing herbs and other produce alongside its robot-run distribution centres around the world.

The online grocery specialist has bought a 58% stake in Jones Food, a “vertical farm” that grows 420 tonnes of basil, parsley and coriander a year in stacked trays under 12km (7.5 miles) of LED lights in a warehouse in Scunthorpe. The grower currently supplies businesses such as sandwich maker Greencore.

Duncan Tatton-Brown, finance director of Ocado, said the group could open at least 10 more similar farms within five years. He said it could take less than a year to build a Jones Food facility and the two companies were now considering how Ocado’s expertise in robotics and AI could be used to make Jones Food more efficient.Advertisement

James Lloyd-Jones, chief executive of Jones Food, said the group’s Scunthorpe farm recycled all its water, did not use pesticides and was powered by renewable energy, such as wind turbines and solar panels.

Ocado’s £17m investment also includes the formation of a new joint venture – Infinite Acres – with US-based vertical farming business 80 Acres and Priva, a Netherlands-based horticultural technology provider, on a four-year project to develop off-the-shelf vertical farming systems that can be sold to retail and other businesses worldwide. The 80 Acres farms, which are based in Ohio, Arkansas, North Carolina and Alabama, are able to grow tomatoes and courgettes as well as leafy salads and herbs, without using pesticides.

Tim Steiner, Ocado’s chief executive, said: “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.

“Our hope ultimately is to co-locate vertical farms within or next to our [distribution centres] 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.”

Ocado Zoom is a new one-hour delivery service offering a more limited range of goods, launched earlier this year and being trialled in west London.

Only eight people work at the Jones Food facility, where the herbs are grown hydroponically – getting all the nutrients they need without soil. The plants, the first of which were only grown last year, are not touched by humans from seed to bagging ready for stores. A robot called Frank stacks trays of plants ontoon to towers of shelving while machinery automatically harvests them when ready.

Every element inside is monitored to ensure it is clean and primed for growing the herbs quickly. Anyone entering must wear protective clothing including overalls, wellies and hairnets and step through an air shower that blows off any dust. Air is filtered to ensure insects cannot enter.

Ocado currently sells Waitrose groceries via its website in the UK and provides distribution for Morrisons’ website. Next year it will swap Waitrose for Marks & Spencer under a £750m joint venture, raising the prospect of specialist robot farms serving the 134-year-old high street retailer.

Ocado has sold its hi-tech robot grocery picking and packing technology around the world to retailers wanting to develop online businesses. In one blockbuster deal it is to build 20 warehouses for US supermarket giant Kroger. It has also struck grocery delivery technology partnerships with Groupe Casino in France, Sobeys in Canada and ICA Group in Sweden, creating a ready-made potential market for its robot farms.

By Sarah Butler