While the news that Jones Food Company (JFC) has entered administration is surprising, it is perhaps not that surprising. Although JFC has been seen as one of the most commercially viable indoor farming companies since its establishment in 2016, it has been operating in a notoriously difficult sector, while the wider horticultural sector has seen a number of other larger and more established companies fail over the last few years.
The company’s first facility in Scunthorpe in North Lincolnshire (known as JFC1) was described as ‘Europe’s largest vertical farm’ and at one time was supplying around a third of the UK’s cut basil supply. When the second site (JFC2, billed as ‘the world largest and most advanced vertical farm’) opened at Lydney in Gloucestershire, company founder and CEO James Lloyd-Jones commented, “We have now cracked the code for accessible, sustainable, premium food being grown all-year round, at a super-competitive price.”
At a conference a few years ago, I had the opportunity to ask Mr Lloyd-Jones why JFC was succeeding when so many other high profile vertical farming companies were failing. His response was that unlike some of the most well-known names who had attracted investment from mega-rich investors such as Bill Gates and Jeff Bezos, JFC had developed with limited means meaning it was always focused on economic realities. However, even then the firm seemed to be struggling to find a profitable niche, looking at a number of crops to grow instead of basil, including, at one point, tree seedlings.
Despite high-profile backing from online retailer Ocado, the company has been sucking up cash since it raised £25 million in 2021 to fund JFC2, with additional investment every year and a prediction for more in the future. With the appointment of Administrators Damian Webb and Stephanie Sutton at RSM UK, JFC joins the long and ignoble list of failed vertical farming companies including Eider VF in the UK and most recently Plenty Unlimited in the US.
The administrators have said they hope to sell the company as an ongoing concern, but with the basic economics of indoor farming looking so unattractive compared to other forms of controlled environment agriculture (CEA) such as glasshouses, and open field growing, it would be a brave investor who took it on.
There is no doubt that there are some benefits to indoor growing compared to other growing systems, but so far, they appear to come at far too high a cost to be viable.
