Vertical Farm Basics and Overview

The Benefits and Drawbacks of Vertical Farms: Both Sides from 10 Years on the Frontline

People often say vertical farms are “tough” and “always in the red.” News about large facilities pulling out also gets reported in a big way, so that impression is understandable.

But as someone who has worked inside the industry for more than 10 years, that impression is half right and half off the mark. The reality you see as a worker and the structure you see as a business are two different things.

In this article, I will organize the benefits and drawbacks from both viewpoints.

The Reality of Vertical Farms from the Worker’s View

Vertical farms attract attention both as a way to enter agriculture and as a career-change destination. But the reality is quite different from the image shown in the media.

For more details on the actual work, please also see the article below.

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Benefits for Workers

Because vertical farms are indoor facilities, the working environment is far more comfortable than open-field farming. There is no work under the blazing sun or in the rain, and you can work in an environment where temperature and humidity are controlled. Harvests are also scheduled in advance, so sudden long working hours caused by bad weather are less likely, and the physical burden is lighter.

Stable harvests that are not affected by weather also translate directly into stable income for workers. The fact that situations like “sales are zero this month because of a typhoon” are less likely than in open-field farming is a major benefit for workers as well.

There is also the appeal of an environment where you can work with advanced technology, but in reality, automation has not advanced as much as the media image suggests. Even as of 2026, many sites still rely heavily on human labor, and the introduction of IoT and AI is still at the stage of “moving forward little by little.” There is still a gap between the image of “the high-tech front line of agriculture” and the reality on site.

Drawbacks for Workers

To be honest, the issue is that wage levels are not high relative to the breadth of expertise required.

Staff at vertical farm sites need a wide range of skills, not only cultivation techniques but also equipment management, environmental control, and hygiene management. The scope they have to cover is broad even compared with other forms of agriculture or manufacturing, and despite that, wages are not especially high. That is the current situation.

Also, because frontline capability connects directly to yield, quality, and cost, staff are always expected to keep learning. It is hard to call this a drawback, but it is also true that some people experience it as a burden. At companies entering from other industries, staff often do not have basic agricultural knowledge, so the range they must learn from scratch becomes wider.

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Vertical Farms as a Business

Next, let us look at vertical farms as a business. First, I will organize the basic differences from other forms of agriculture.

The ability to fully control the environment is the biggest strength, and it is also the reason costs become heavy.

Business Benefits

The biggest business strength is stable supply capability.

Because vertical farms are almost cut off from the outside environment, harvest volumes can be planned on a weekly basis. In open-field farming, harvests can drop sharply because of typhoons or lack of sunlight, but in vertical farms, shipments can continue year-round under controlled, consistent growing conditions. In contract growing and B2B transactions, this stable supply becomes direct negotiating power.

The ability to greatly reduce pesticide use is also a sales strength. Brand appeals built around “no pesticides used” or “high quality and stable quality” are possible, and this can be used for high-value-added transactions with supermarkets and restaurants.

However, stable supply comes with the condition that “farm operations management is appropriate.” There are real cases where production volume drops because of management mistakes or insufficient staff skills on site. It is important to understand the other side: “strong against weather, weak against human factors.”

Business Drawbacks

The biggest drawback is cost. Both the initial investment and running costs weigh heavily.

Initial costs include facility construction and equipment investment, and a Plant Factory with Artificial Lighting (PFAL) is especially expensive. Among running costs, electricity is the biggest issue. For PFAL, power costs have a major impact on the cost structure. The rise in electricity prices in recent years has been putting pressure on the finances of many vertical farms.

The fact that the crops that can be grown lean toward leafy greens is also a constraint. Lettuce, spinach, and herbs are well suited to vertical farms, but in many cases fruit vegetables such as tomatoes and cucumbers, and root vegetables with deep roots, are difficult to grow in current multi-tier systems. When the range of crops is limited, differentiation in the market also becomes difficult.

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Key Points for Producing Results in Vertical Farms

With the benefits and drawbacks in mind, I will organize the points that matter for producing results as a vertical farm business.

Selecting crops by working backward from the market. If you start from “what you want to grow,” failure becomes more likely. The strength of vertical farms is stable supply, so it is important to first think about sales channels that can use that strength—contract growing, foodservice and B2B, and direct-to-consumer e-commerce—and then design the facility around the crops and volume those channels require. With the mindset of “sell what we grow,” the risk of holding unmarketable produce or excess inventory becomes high. In Japan, low-priced, high-quality vegetables are already distributed, so products without differentiation get pulled into price competition.

Conservative funding plans. You need to make plans on the premise that the initial investment is large and that it will take several years to become profitable. It is important to secure operating funds with enough margin after factoring in higher electricity and materials costs. Subsidies should be treated as something to use “if they can be used,” and if you build them into the premise, the plan is likely to collapse. A business plan that seeks short-term profit does not fit the structure of vertical farms in the first place.

Do not postpone investment in operations. What determines profitability is not equipment, but the skills and know-how of the staff on site. Even if you introduce the latest equipment, yield and quality will not rise if the site cannot use it properly. If you postpone investment in hiring, training, and retention, it becomes harder to get value from equipment investment. In vertical farms, investment in people is as important as investment in equipment.

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Summary

Vertical farms are neither “high-tech agriculture that lets you earn easily” nor “something that is all red ink once you try it.” They are a business that works if managed properly, but the conditions required for that are strict.

From the worker’s side, there are benefits such as a comfortable working environment and stable income, while the imbalance between the breadth of required skills and wage levels remains an issue. As a business, there is a clear strength in stable supply, while the heavy cost structure and crop constraints put pressure on management.

What both viewpoints have in common is that “the quality of people and management on site determines the result.” The source of competitiveness in vertical farms is not equipment or location, but frontline capability.