Vertical Farming Struggles to Compete With Traditional Agriculture

Most vertical farming startups have shuttered as the industry faces high costs and tough competition

Mar. 21, 2026 at 9:53am

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Vertical farming businesses that blossomed a decade ago with promises of an abundant, cleaner source of fruits and vegetables have mostly withered, as the industry struggled with high infrastructure costs, competition from traditional farms, and rising energy prices. While some vertical farms have found success by targeting niche markets, the industry as a whole has faced significant challenges in trying to compete with the efficiency and low costs of open-field farming.

Why it matters

Vertical farming was touted as a climate-friendly solution to issues like pesticide use, water overconsumption, and long-distance transportation in traditional agriculture. The struggles of the vertical farming industry raise questions about the viability of these high-tech farming methods and whether they can truly disrupt the entrenched conventional farming model.

The details

Vertical farms are constructed in warehouses and other indoor facilities, with crops grown in stacked trays and fed by hydroponic or aeroponic systems. The industry attracted billions in venture capital funding in the late 2010s, but many prominent companies like Bowery Farming and AppHarvest have since gone out of business. The high costs of building and operating vertical farms, combined with the industry's inability to match the efficiency and low margins of traditional open-field farming, have proven to be major obstacles.

  • In the late 2010s, vertical farming companies raised billions in venture capital funding.
  • In 2025, Plenty, a major vertical farming company, filed for Chapter 11 bankruptcy protection with over $100 million in liabilities.
  • In December 2026, AeroFarms said its largest investor had withdrawn funding and it could shut down that month.

The players

Bowery Farming

A vertical farming startup that raised $938 million but is now out of business.

AppHarvest

A vertical farming company that raised $792 million but is also no longer in business.

Plenty

A vertical farming company that filed for bankruptcy in 2025 but emerged with a new business model focused on higher-value crops like strawberries.

AeroFarms

A vertical farming company that said in December 2026 its largest investor had withdrawn funding and it could shut down that month.

80 Acre Farms

One of the biggest remaining vertical farm companies, which the article says is profitable at the farm level but not when accounting for administrative and other centralized costs.

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What they’re saying

“Part of what you saw with the industry evolution was a little bit of a shakeout in whose technology could actually produce a crop that the market needed and wanted.”

— Dan Malech, Chief Executive of Plenty

“Whether there will be any current survivors, or the industry will be built on the boneyard of the pioneers, there is value there.”

— Mike Zelkind, Co-founder of 80 Acre Farms

What’s next

The future of the vertical farming industry remains uncertain, as companies continue to struggle with high costs and competition from traditional agriculture. Some experts believe the technology still has value, but the industry may need to find new business models and target higher-value crops to survive.

The takeaway

The vertical farming industry's struggles highlight the challenges of disrupting an entrenched agricultural system dominated by efficient open-field farming. While vertical farming promised environmental and logistical benefits, the high costs and inability to match traditional farming's low margins have proven to be major obstacles that most companies have not been able to overcome.