World’s largest vegetable factory in Japan

‘Spread’, a Japanese company based in Kobe, is challenging traditional farming

Since the Fukushima nuclear power plant disaster around 200 vertical farm factories have appeared in Japan due to the shortage of land caused by contamination and the need to produce more food with less earth.

Most of the vertical farms have been small operations with very limited commercial application, however Spread stood out from the pack given its large scale indoor factory producing and delivering 21,000 heads of lettuce each day.

Our Nuffield cohort had the opportunity to visit Spread and witness its vegetable factory in operation. Jay, Spread’s global business development manager, gave us a high level presentation about the company’s current facility and the new facility that is due to launch next year.

Spread Co was founded in 2001 as part of a larger company called Trade company Co which specialises in the distribution of mainly vegetables to a number of verticals such as central markets, retailers and food services. CEO and founder of the Trade company Co, Mr Shinji Inada wanted to find a better way of producing vegetables for his distribution and connect to the 22nd century consumer, and so the first Spread factory was born.

My first impression was definitely unlike walking onto a traditional farm. The environment was very sterile, clean and controlled. I instantly felt at ease by the safety and hygiene practices in place, however I wondered what consumers would think of this environment. Would they care that their lettuce or herb was grown without any sun within a factory?

My SWOT analysis of the Spread system

STRENGTHS

  • Completely sterile environment
  • Ability to control the growing environment
  • Ability to produce 365 days
  • Uses 13 times less water than conventional farming
  • No chemicals pesticides / herbicides
  • No run off
  • Localised productions
  • Reduced transport costs
  • Factory is 2,870 sqm, with an intensive growing footprint of 25,200 sqm, which is spread across 16 growing layers.

WEAKNESSES

  • $8-10 USD million dollar investment, long 10 year ROI
  • Currently only proven on 4 varieties of lettuce.  We were informed that getting the protocols correct for successfully commercialising crops is difficult, as it is not the same as outdoor production.
  • Internal logistics not considered –  planting and harvesting performed manually with a significant labour force.
  • High use of energy to create the micro climate in the factory
  • Heavy use of building infrastructure

OPPORTUNITIES

  • Improve internal stock logistics (we were informed this will be in the plan for the new facility being built next year)
  • Harness the suns energy to light, heat and cool the factory
  • Get the formula right to grow a broad range of products successfully
  • Implementation for LED lighting, currently using simple florescent lights

THREATS

  • Energy input costs. Japan has relatively low energy costs powered by nuclear reactors, this is not the same around the globe.
  • Public perception of food coming from a factory. Japanese people have been through two nuclear disasters and like things sterile and Australia in contrast has not experienced this.  Maybe the Australian consumer would prefer to be receiving a more natural product?

I think that Spread is a major contender in the vertical farming area. I’m not certain if they have the right model for the global market, but they are definitely creating more food with a lot less earth.

Please let me know what your thoughts are on Factory vegetable farming. Would you buy your fresh salads and vegetables from a factory? Your responses would be of great value to my global study.

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Latest comments
  • well written piece Jan.
    I am wondering if they also add CO2 to increase growth.?
    And I fear that if we only eat food that is grown sterile we will get over reactive immune system diseases.

  • Do they make profit?

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