Hello everyone! I’m Shohei.
I’ve been in the plant factory industry for many years, and the situation on the ground has been getting tougher year after year.
Isn’t the plant factory industry facing a cliff-edge situation?
That said, plant factories, which can produce vegetables in a closed environment, still have many advantages. For example, they can provide a stable supply regardless of the weather, and they can reduce the use of pesticides.
On the other hand, there are many challenges that need to be overcome.
In this article, I will explain the various challenges facing plant factories from my perspective, having worked in the industry for many years.
I will also provide specific solutions.
If you are considering entering the plant factory business or are interested in it, please read until the end.
For information on the advantages and disadvantages of plant factories, please also read the following article:
Does the Plant Factory Have a Future?
When I entered the industry in 2011, plant factories were expected to be the future of agriculture.
In terms of market size, it is still growing globally.
By the way, I also wrote about the future of plant factories in the following article:
Growth Potential of the Plant Factory Market
Socially, there is growing awareness of food and environmental issues, as well as the spread of health consciousness.
Against this backdrop, the demand for vegetables produced in plant factories is increasing, and further market growth is expected in the future.
Potential of Plant Factories
- Stable Supply: They are less affected by climate change and can provide stable harvesting throughout the year.
- High Quality and High Value-Added: Environmentally controlled production allows for the production of high-quality vegetables. It is also possible to develop high value-added products such as vegetables with enhanced functional ingredients.
- Resource Conservation and Reduced Environmental Impact: Water usage can be significantly reduced, and pesticide use can also be minimized.
- Production in Urban Areas: Production can take place near consumption areas, reducing transportation costs and maintaining freshness.
- Creation of New Jobs: As a new industry, it can contribute to job creation.
These advantages have led to expectations that plant factories will be solutions to various social issues, such as food security, environmental problems, and regional revitalization.
Three Challenges Facing the Plant Factory Business
Plant factories are attracting high expectations for the future, but the road ahead is not paved.
In order to actually succeed as a business, there are a few hurdles to overcome.
There are three major challenges: economic, technical and human resources, and social and environmental.
1. Economic Challenges – High Initial Costs and Operating Costs –
First of all, starting a plant factory requires a lot of money for facility construction and equipment installation.
In particular, “fully artificial lighting” that does not use sunlight for cultivation results in high initial costs.
High Initial Investment
- Equipment Investment: Building a plant factory requires a large initial investment in facilities, cultivation systems, and environmental control systems. In particular, fully artificial lighting tends to be more expensive than solar-combined types that can utilize sunlight.
- Technology Introduction Cost: Introducing the latest cultivation and environmental control technologies requires considerable costs. The introduction of AI and IoT is also a factor in increasing initial costs.
Burden of Operating Costs
- Electricity Costs: In the case of fully artificial lighting, the lighting equipment consumes a lot of electricity, making electricity costs a major burden.
- Labor Costs: Environment control and crop management may require specialized knowledge, leading to a tendency for higher labor costs.
- Maintenance Costs: Costs are incurred for equipment maintenance, management, and repair.
Disadvantage for Small-scale Factories
- Economies of Scale: Large-scale plant factories can leverage economies of scale to reduce costs, but small-scale plant factories are at a disadvantage in terms of cost competition.
2. Technical & Human Resources Challenges – Lack of Expertise and Know-how –
Plant factories require precise adjustments to temperature, humidity, and light intensity to create the optimal environment for plants.
This requires advanced technology and expertise, but the reality is that there is a shortage of people with such knowledge.
Lack of Expertise in Environmental Control
- Optimizing Growth Environment: Plant factories require maintaining temperature, humidity, light, carbon dioxide concentration, and nutrient solution composition at optimal levels for plant growth. This requires advanced environmental control technologies and expertise in plant physiology.
- Necessity of Data Analysis: Analyzing growth environment data using sensors and adjusting environmental control based on the results is also important.
Shortage of Cultivation Instructors
- Lack of Experience and Know-how: Plant factory cultivation differs significantly from conventional field cultivation, and there is a shortage of experienced cultivation instructors.
- Lack of Information: There is a lack of information on plant factory operating know-how, making it necessary for producers to establish cultivation methods through trial and error.
Lag in Human Resource Development
- Shortage of Specialized Personnel: There is a shortage of personnel with the specialized knowledge and skills necessary to operate plant factories.
- Lack of Educational Institutions: There are few educational institutions specializing in plant factories, and human resource development is lagging behind.
These problems require collaboration between government and industry to strengthen research systems and improve technical guidance and support systems for producers.
Incidentally, I am providing operational know-how content through this website and providing on-site guidance.
3. Social & Environmental Challenges – Lack of Awareness and Environmental Burden –
Vegetables grown in plant factories are not widely known yet, so there is some consumer resistance.
They can be more expensive than conventional vegetables, and some people question the “artificial environment.”
Lack of Consumer Awareness
- Price Resistance: Vegetables produced in plant factories can be more expensive than conventional vegetables, leading to consumer resistance.
- Questions about Safety: Some consumers may have doubts about the safety of vegetables grown in artificial environments.
Concerns About Environmental Impact
- Energy Consumption: In the case of fully artificial lighting, the lighting equipment consumes a lot of electricity, which could lead to a large environmental impact.
- Food Waste: If planned production is difficult, an imbalance between supply and demand may lead to food waste.
The following article also discusses the position of plant factories in society.
The Path to Overcoming Challenges – Strategies to Lead Plant Factories to Success –
To overcome the challenges we have discussed and lead the plant factory business to success, a multifaceted strategy is required.
Let’s look at specific solutions for each challenge.
Suppressing Initial Investment
- Utilizing Subsidy and Grant Systems: National and local governments have established various subsidy and grant systems for plant factory construction and equipment installation. By actively utilizing these systems, the burden of initial investment can be reduced.
- Cost Reduction: Introducing cultivation systems that utilize sunlight and utilizing used equipment can reduce initial investment.
Reducing Operating Costs
- Introducing Energy-Saving Equipment: Introducing equipment with low power consumption, such as LED lighting, can reduce electricity costs.
- Utilizing Renewable Energy: Utilizing renewable energy such as solar power generation and wind power generation can simultaneously reduce electricity costs and environmental impact.
- Automation and Labor Savings: Introducing systems that automate tasks such as sowing, harvesting, and packaging can reduce labor costs.
Strategies for Increasing Revenue
- Developing High Value-Added Products: Developing high value-added products such as vegetables with enhanced functional ingredients, rare varieties of vegetables, and baby leaf vegetables, which can be sold at higher prices, can increase revenue.
- Branding: Establishing a brand that emphasizes safety, security, and high quality can avoid price competition and stabilize revenue.
- Direct Sales: Direct sales to supermarkets and restaurants can reduce intermediate margins and increase revenue.
- Tourist Farms: Adding a tourist farm where visitors can see the plant factory can create new revenue streams.
Sharing Cultivation Know-how and Building a Guidance System
- Guidance by Experts: It is necessary to develop experienced cultivation instructors and build a system for providing technical guidance and consulting to producers.
- Online Training: Providing opportunities to learn without limitations on location or time, such as online training, can promote human resource development.
Conclusion: Overcoming Challenges Requires Steady Effort
To promote the spread of plant factories, it is necessary to overcome challenges such as high initial investment and operating costs, lack of research systems and cultivation instructors, and the need for advanced environmental control technology and human resource acquisition.
Overcoming these challenges requires steady efforts to improve the level of the field.
At the same time, education for this improvement is also important.
Please take advantage of the various contents on this site.
- What are the Challenges of Plant Factories?
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Plant factories face three main challenges:
High Initial Investment and Operating Costs
There is a tendency for costs such as equipment investment, electricity costs, and labor costs to be high, making it difficult to stabilize management unless it is above a certain scale.
Lack of Research Systems and Cultivation Instructors
Research at local research institutions is decreasing, and the number of young researchers is also decreasing. There is also a lack of public institutions that provide cultivation guidance and support to producers.
Need for Advanced Environmental Control Technology and Human Resource Acquisition
Advanced environmental control is required for temperature, humidity, light, carbon dioxide concentration, and nutrient solution composition, making it difficult to secure personnel with such skills.
- Why are Plant Factories in the Red?
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The main reasons for plant factories being in the red are the high initial investment and operating costs.
Significant costs are incurred for building construction, lighting, air conditioning, nutrient solution cultivation systems, and other equipment investments. In addition, operating costs such as electricity, labor, and equipment maintenance tend to be high.
To cover these costs with sales, a certain production scale is required, but small-scale plant factories cannot leverage economies of scale and become expensive in terms of cost.
Furthermore, the lack of personnel with advanced environmental control skills can lead to reduced yield and quality, which are factors that worsen profitability.
In addition, the harsh market environment, such as competition from inexpensive foreign vegetables, is putting pressure on plant factory management.
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