Dive Brief:
- Online grocery company Ocado has bought a 58% stake in Jones Foods Co., the largest vertical farm in Europe, Bloomberg reported. Ocado will use its automated systems to make herb-growing operations more efficient and hinted it may offer Jones Foods Co.’s herbs on its same-day delivery platform, Ocado Zoom, in the U.K.
- Ocado is also joining forces with Infinite Acres, a startup that wants to grow local produce in urban centers or locations where access to fresh food is difficult, according to a company press release. Infinite Acres will use Ocado’s software and hardware systems including artificial intelligence, automation and robotics.
- The Infinite Acres venture also includes partners 80 Acres Farms, a U.S.-based indoor farming company, and Priva, a Netherlands-based tech company.
Dive Insight:
Just like online grocery, indoor agriculture is full of opportunities for automation and increased efficiency. The high costs of utilities required to run indoor farms coupled with the steep price tag for elusive real estate in major metro areas make margins razor thin. If tech-enabled systems like the ones that Ocado develops can help improve efficiency and optimize production, then the company could be a powerful ally for indoor farming startups looking to enter food retail. It also gives Ocado an inside track on sourcing.
Indoor farming startups have gained traction in recent years since the idea of farming in the middle of big cities caught on, including venture-backed AeroFarms and Bowery. Urban farming startup Square Roots has been targeting grocery store parking lots throughout the country, and recently announced a partnership with Gordon Food Services to set up its container farms at the company’s campuses across the country.
Meanwhile, packaged salad company BrightFarms announced plans to expand its retail footprint in four regions where it operates hydroponic greenhouses to supply supermarkets with packaged salad products and other fresh, leafy greens year-round.
On top of its apparent appetite for indoor farming, Ocado recently participated in robotics startup Karakuri’s $9.1 million seed round. The London-based outfit makes two food-focused robots, including one that can draw from 48 different ingredients to create ready-to-eat meals. The investment points to Ocado's interest in advancing the technology and efficiency behind fresh meals, which are a major priority for grocers as they battle restaurants.
Partnerships are a top priority for Ocado, which has a deal with Kroger to develop 20 customer fulfillment centers in the U.S. Ocado is also working with Canadian conglomerate Empire Company Limited to launch Voila by Sobeys and Voila par IGA, new online grocery delivery services in Quebec and Ontario that use Ocado’s technology.
