The combined market capitalisation of these companies sits just above $5.1 billion, which suggests the segment is still in its relative infancy. Yet, investment in indoor agriculture more than doubled to $1.3 billion in 2020 as part of the larger doubling of agri-food investment that reached $22.3 billion last year.8 Even more interesting, when you look at the clients of these companies, they already include the major giants of the food industry including, but not limited to, Costco (COST), Target (TGT) and Walmart (WMT), and even Sysco (SYY) and Marriott (MAR) which, in our view, sets up the industry well to take advantage of future growth.
With global populations expected to hit 8.5 billion by 2030,9 and available arable land on the decline,10 there are those who would invoke the ghost of John Malthus to raise resource alarms. Our view is that, like every time since his first publication of “An Essay on the Principle of Population” in 1798, there are always going to be new technologies that wring out new and innovative solutions. Indeed, technology is now aiding human ingenuity in ensuring a future for farming can feed the ever-growing global population. After all, creating efficiencies by going vertical has been applied to many things, ranging from real estate11 to solid state drives12 and, if you have steady hands, Jenga.13
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