June 21, 2011 | Robert Puro

To grow one million heads of lettuce using conventional agriculture methods in the US requires either 16 acres of land in the Northern states, 8 acres of land in the Southern states, or .9 acres in a traditional hydroponic greenhouse operation. Vancouver-based Valcent Products Inc. (OTCBB: VCTZF) claims that it can beat those numbers handily and produce the same amount of lettuce sustainably on just .16 acres with its patented hydroponic vertical growing system, VertiCrop™.

Land use efficiency, though, is only one of the many benefits that accrue from using VertiCrop™. According to Valcent, VertiCrop™ produces leafy greens using 92% less water than conventional land-based agriculture, requires no herbicides or pesticides and can be easily located in abandoned buildings or facilities close to or inside of city centers to reduce food miles, resulting carbon emissions and transportation costs.

How It Works

Within the system, leafy green seedlings are placed in trays that contain growing media. The trays are stacked vertically and suspended from an overhead track. The overhead track functions as a moving conveyer system to shuttle the trays first to an irrigation system where the plants are charged with nutrients and water. The water passes through the trays, and the plant roots absorb what they need. Any excess water and nutrient runoff is re-circulated by the system, assessed for its pH and nutrient values, then purified and recycled. The trays move continuously throughout the day, which provides the crops with both airflow and consistent light within the controlled environment system.

From placement in the trays to removal and harvesting, it typically takes the crops between 17 – 20 days to reach market.

Market Opportunity

VertiCrop™, which Valcent markets as an environmentally responsible urban farming system, seeks to meet the demands of a higher end consumer segment that understands and is conscious of the problems inherent in conventional agriculture production.

“There’s a bit of a paradigm shift in how food is produced,” said Stephen Fane, CEO of Valcent. “People are more concerned about it being local, chemical free and non environmentally impactful.” Fane said traditional lettuce and leafy green production involves using a lot of chemicals and a ton of water, and if operations are not located close to market “there is a consequence when you go to send your leafy greens into the production chain – you lose a lot of food value along the way.” After 96 hours of storage at 20 degrees centigrade, lettuce only retains 61% of its vitamin C content and 54% of its chlorophylls. Valcent believes that the ability to locate VertiCrop™ systems closer to market will provide consumers with the higher quality leafy greens that they demand.

Business Model

Fane said Valcent plans to initially license and sell VertiCrop™ to 3rd party partners that target consumers who are willing to pay a little extra for high quality, better tasting food that is grown locally and in an environmentally and socially responsible way. “We’re not selling on a commodity basis and don’t expect the customer who would buy our systems would be trying to sell on a commodity basis,” he said.

Fane also said that down the road, Valcent may itself decide to leverage VertiCrop™ to become a producer as “the economics really are quite attractive.”

Challenges to Scaling

Valcent’s biggest challenge to scaling VertiCrop™, and in turn the vertical farming sector, is obtaining visibility in the marketplace. “I think it’s primarily one of getting multiple sites established that people can see,” said Fane. Valcent currently has a fully functioning VertiCrop™ system installed at Paignton Zoo in the UK, which has been up and running for two years. Fane believes that people’s shifting expectations and wants concerning leafy greens along with the emergence and visibility of more sustainable vertical farming systems will help to fuel industry growth.

Overcoming Skepticism

When asked about those who hold skeptical views of urban vertical farming systems with regard to associated costs and economic viability, Fane noted that it’s important to understand the costs of normal conventional agriculture when making such assessments. “Conventional agriculture is not fully costed,” he said. “Environmental or aquifer corruption, deadening of rivers, waste of water, and the environmental impact of traveling on average 1500 – 2000 miles by road – all of these things add up to costs that aren’t taken into consideration in the equation.” As more and more people understand these costs, Valcent believes the financial and overall benefits of sustainable urban farming systems will become obvious to everyone.

The Future

In the next 10 – 15 years, Valcent hopes to see VertiCrop™ in every major city in North America and Europe.

With VertiCrop™ primed and ready for market expansion and visibility, Valcent appears well on its way to insuring that urban-based vertical growing systems will proliferate and play an outsize role in furthering the goals of sustainable agriculture.