Indoor farming has gone high-tech. An increasing number of investors are now sitting up and taking notice. Utilizing new lighting techniques and information technology, entrepreneurs are now working to advance a field known as building-integrated agriculture, an industry based on the concept of growing food in warehouses instead of the traditional greenhouse. (For general guidelines on investing in the agriculture sector, see article: A Primer For Investing In Agriculture.)

Advocates of the rapidly evolving trend of indoor farming are convinced it is necessary in order to resolve world food shortages. Along with presenting a significant problem in less-developed countries, shortages of fresh food have also proven to be an issue in urban areas, where residents are often faced with an issue that has come to be known as a food desert. With indoor plumbing, even those who make their homes in downtown areas could take advantage of the opportunity to purchase pesticide-free food that is locally grown year-round.

The process of growing food indoors could also present significant benefits to the environment. In addition to requiring 70 percent less fertilizer than traditional methods of farming, indoor farming also requires 98 percent less water. At the same time, indoor farming also produces a higher yield.

There are some potential drawbacks to indoor farming, however, the most significant of which is that it could potentially use more electricity. Yet, innovative entrepreneurs have begun to develop solutions to address such challenges, including the use of automated systems and LED lighting that is more energy-efficient

Indoor Farming Changing the Approach to Growing Food

The concept of bringing plants indoors certainly does offer a number of benefits. Along with the fact that farmers no longer need to be concerned about the weather or seasons, it also becomes possible to grow crops around the clock. In addition, indoor farming makes it possible to pamper plants in a number of other ways, including the recycling of water on a continuous basis.

Automated monitoring systems complete with specialized sensors have also become increasingly popular. Such sensors make it possible to detect when vital nutrients may be missing, and then provide growing plants with the nutrients they need in more accurate measurements.

The use of LED lighting over fluorescent growing lights has also proven to be highly beneficial as well. Greater energy efficiency translates into lower electricity bills, reduced heat, and lowered air conditioning costs. Furthermore, since LED lights are cooler, it is possible to position the lights nearer the plants. In turn, this allows indoor farmers to plant crops more densely.

The concept of growing plants within an enclosed space rather than in the open air is certainly not a new idea. For instance, the process of hydroponics, in which plants are grown in nutrient-rich water instead of soil is one that caught on several years ago. With increasingly advanced technological methods, indoor farmers are able to boost the productivity of hydroponic farming methods. 

An Alternative to Organic Farming

Despite the tremendous hope associated with organic farming, it has yet to attain the success that many hoped for. The many challenges associated with organic farming include the availability of open farmland. Add in the potential risks associated with weeds, insects, and rain, all of which can wreak havoc on crops, and it becomes clear that organic farming faces significant challenges that are often difficult to overcome. Organic farmers also face the inability to regulate water, humidity, and temperature.

By comparison, these are all challenges that do not pose a problem in the field of indoor farming. Often carried out in warehouses, indoor farming does not require open farmland.  Due to an indoor growing environment, there are no concerns about rain, weeds, or insects. At the same time, automated monitoring systems provide the ability to control temperature and water with the greatest precision. 

Investing in Indoor Farming Technology

Recognizing the vast potential presented by indoor farming, an increasing number of companies and investors are becoming involved because they see a niche that can be filled.

In an effort to increase opportunities for AgTech startups and investors interested in funding these startups, the third annual Indoor Agriculture Conference was recently held in Las Vegas. According to a white paper released at the conference, growth of the indoor farming community could reach $9 billion.

The indoor farming industry has expanded at such a rapid rate that it now presents massive market growth potential, while also having a tremendous impact on the American economy. In fact, many indoor farming entrepreneurs believe that indoor farming could eventually change the way that food is grown and distributed.

Investors who are continually looking for opportunities that will allow them to enter an industry before it reaches its peak will find that indoor farming could present just the opportunity they are seeking. There are certainly many potential opportunities within the indoor farming industry for investors who are looking to get a jumpstart on this emerging industry. 

Big Data

The use of automated systems presents one area of opportunity for investors and developers. Regardless of the crop being grown, indoor farmers frequently rely on the use of big data along with predictive analytics in order to protect against losses and maximize yields.


The future of lighting technology is yet another area that presents investment opportunities in the field of indoor farming. Significant advancements have been made in recent years in terms of LED lighting, which is generally believed to result in improved crop yields. There is still tremendous opportunity for developing the field of lighting for indoor farming, including the use of adaptive lighting technology. (To read more about LED lighting, see article: The LED Market Gets Brighter.)

Distribution Systems

As is the case with any type of farming system, it is important to have a system in place to ensure that harvested foods are distributed in the most efficient manner possible. Among the goals of the many "eat local" campaigns sweeping the country is to deliver fresher foods to consumers while decentralizing supply chains and reducing or even eliminating long-distance transportation. One of the ways in which many indoor farming operations is doing this is by investing in online sales platforms. Such platforms give consumers more control over their weekly food purchases, as well as the ability to customize these purchases. By leveraging social media engagement, indoor farmers are able to expand their customer bases quickly. (See article: Implementing A Small Business Social Media Strategy.)

The Bottom Line

Whether or not indoor farming has the potential to constitute a significant percent of local food production remains to be seen. Even so, indoor farming entrepreneurs believe that their use of cutting-edge technology could pave the path to allowing food to actually be consumed in the same area where it is grown.