Oishii: The Tesla of Strawberries?

Vertical farming strawberries.

A few years ago, the tech world was abuzz with the news of a Japanese student securing $50 million to sell his designer strawberries to affluent New Yorkers at $50 per box. 

Fast forward two years — despite the spiraling energy prices that hit many startups, the luxury strawberries continue to thrive. This tale of triumph involves Oishii, a vertical farming startup, and its founder Hiroki Koga, dubbed the “Tesla of Strawberries.”

Embracing the Vertical Farming Revolution

For years, farming has been moving towards vertical and urban practices. First proposed in 1999 by Dr. Dickson Despommier at Columbia University, vertical farms have since blossomed into a billion-dollar industry. Between 2014 and 2020, investors globally funneled over $1.8 billion into vertical farming startups, anticipating a market worth of $20.9 billion in the next five years.

Unlike traditional farming, vertical farming, or “controlled environmental agriculture” (CEA), remains unaffected by unpredictable weather conditions and provides a year-round crop yield. Using technology such as robotics, computer vision, and artificial intelligence, vertical farmers like Koga have optimized growth factors such as light, temperature, and humidity.

The Underlying Crisis of Vertical Farming

However, vertical farming has recently hit a snag: energy. 

These farms require vast amounts of energy to operate, specifically for heating and artificial lighting. A 2021 Global CEA Census Report revealed that vertical farms use over 100 times as much energy as outdoor lettuce growers in Arizona.

Consequently, when the global COVID-19 pandemic affected supply chains and the current ongoing war in Ukraine drove up energy costs, many vertical farming companies found themselves in trouble. Companies like Agricool, AppHarvest, and Infarm are among those struggling.

Oishii: Navigating the Crisis

Amid the turbulence, Oishii is flourishing, thanks to its founder Hiroki Koga’s unique approach. 

Borrowing from the Japanese tradition of gifting expensive designer fruit, Koga has focused on quality over quantity, offering unique, flavorful strawberries. Using vertical farming technologies and innovative bee pollination strategies, Koga managed to cultivate rare Japanese strawberries in a 1,000-square-foot indoor vertical farm. In doing so, Oishii mirrored Tesla’s strategy of initially targeting the luxury market before scaling for mass production.

According to the Gartner hype cycle, emerging technologies pass through five phases, the third of which is the “trough of disillusionment” characterized by failures and bankruptcy. The recent downfall of several vertical farming businesses suggests that the industry is moving into this phase

The Future of Vertical Farming

The recent failures in the industry could be a beneficial development as vertical farming moves towards finding pragmatic solutions. Transitioning to renewable energy sources or relocating to regions with abundant cheap energy, like the Middle East, could be potential solutions.

As Oishii’s success has shown, a well-timed strategy, combined with realistic expectations, can guide vertical farming toward a successful future. If the promise of greener, cheaper, and more efficient farming becomes a reality, it will be thanks to the risk-taking entrepreneurs, technologists, and investors who made a big dream come true. The $50 million strawberry saga illustrates that even in the face of ridicule and adversity, innovation and perseverance can result in sweet success.

Adriaan Brits

As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.

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