Infarm: Betting the (Indoor) Farm on Food Security

In the summer of 2023, the co-founders of Infarm, a controlled environment agriculture (CEA) company, were contemplating a major pivot going forward. While Infarm had successfully shown it could grow over 75 products-mainly herbs, leafy greens and mushrooms-in modular indoor facilities, and was able to sell the yield to major supermarket chains across Europe and North America for almost a decade, recent developments required a major rethink of the business. The dramatic rise in energy prices, especially in Europe, as a result of the Russia-Ukraine conflict, made growing crops indoors much costlier; inflationary pressures had further led retailers to look for cheaper produce alternatives. Consequently, Infarm had to shut down most of its growing centers. At the same time, the company's scientists had demonstrated the ability to grow wheat indoors, with a yield per square meter that was already thirty-eight times that of wheat grown conventionally in an open field. CEO Galonska and his leadership team were now pondering whether to shift the company's focus to wheat and target countries that desired to achieve food self-sufficiency. For the pivot to be successful, Infarm would have to convince leaders in these countries to heavily support (and subsidize) the creation of massive "gigafarms," capable of producing thousands of tons of wheat annually, as well as develop a plan for selling at least some of the yield commercially. Another decision facing management was what to do with the existing units in Europe. Infarm could either try to find a local player to take on their operation, or again aim for countries that imported much of their produce and ship the units there. Either way, Infarm would remain involved in technical and operational support under a Food as a Service (FaaS) model.

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