Cover 75% of retail demand by tackling local trends
“It’s not just one or more layers, but rather control, which should be the driving force. In Iceland the country will benefit from high density agriculture, but the most important factor, in my opinion, is control, ”says Andri Guðmundsson, co-founder and partner at VAXA.
VAXA broke new ground in Reykjavik in 2017, and with limited agricultural information at the time, they introduced vertical farming to Iceland. VAXA has operated a vertical farm on a commercial scale for three years, selling branded products across multiple channels.
Trends impacting the sector
“Technology is a tremendous enabler for all the opportunities to come. External factors such as environmental awareness and climate change put pressure on several parts of the supply chain, also supporting the case. Consumption trends also play a big role, enabling vertical agriculture today and the wider sector of environmentally controlled agriculture. There are a lot of different enabling factors – factors that the industry as a whole must follow in order to develop further, ”he notes.
Andri continues: “Local purchasing is one of the major trends that we observe in combination with respect for the environment. The greenhouse community has done a great job in Iceland, according to Andri, educating consumers on the benefits of locally grown produce.
“The local aspect is in my opinion one of the strong assets of vertical agriculture. The reduced food miles, but also the community involvement of local jobs in education efforts make vertical farming so beneficial. Improving and communicating the benefits of local food production is essential for domestic commerce, and here in Iceland consumers are ready to put local produce first. ”
He adds: “However, we have to be realistic in vertical farming. We have a great history and vision, but we need to stay humble and realistic as we build the industry in its infancy. A good balance is necessary and one should not over promise.
Strengthening the sector
According to Andri, Iceland has a strong greenhouse community, based on available geothermal energy. Therefore, there is a lot of lettuce, tomatoes and peppers. However, there is still a great need for more greens. According to Andri, VAXA is the second largest producer of leafy vegetables in Iceland.
Fortunately, the country has a lot of green energy. “We can sleep well at night knowing that although the farm uses a fair amount of energy, we only use low-emission or zero-emission renewables to power our LEDs. “
Andri says he finds the sector very promising as there are untapped opportunities ahead. It is no coincidence that the commercial farm is located in Reykjavik, given the 250,000 inhabitants of the capital; there are only 100,000 people living outside the capital. So it made perfect sense to build the farm on the outskirts of the capital.
VAXA has three different sales channels, the two main ones being the retail trade and the food service industry, such as hotels and restaurants. Restaurants use the VAXA brand as a specialty on their menus, says Andri, because the VAXA brand is very well known in the country. The company has put a lot of effort into branding over the past three to four years.
“It’s really interesting to build a strong brand in a commodities market, and we’re very proud of it,” says Andri. The company didn’t have to do a lot of marketing campaigns from the start, as their products sold out quickly – selling wasn’t VAXA’s biggest challenge.
In addition to supplying more than half of Reykjavik’s outlets with several types of lettuce and herb mixes, VAXA also sells direct to consumers through an online subscription model. “We already cover a large part of the retail market in Iceland, but we still believe that the local high-end leafy greens segment can be taken much further. “