Vertical Farming Faces a Reality Check as Economics Bite

Urban appetite for local greens endures, but closures and bankruptcies show vertical farming still grappling with the basics of profit

5 Feb 2026

The vertical farming industry is entering a period of retrenchment after years of rapid expansion, as operators confront the difficulty of turning indoor agriculture into a consistently profitable business.

Once promoted as a near-term solution to food security and urban supply risks, vertical farming is now marked by bankruptcies, facility closures and restructurings among some of its best-known companies. While the technology behind growing crops indoors has continued to improve, the economics have proved far more challenging than early backers anticipated.

Demand has not disappeared. Consumers in large cities continue to favour locally grown leafy greens and herbs, valuing freshness and reliable supply. That preference has helped keep some operators viable and sustained selective investor interest. But it has not been sufficient to overcome high energy costs, expensive infrastructure and a more cautious funding environment.

Gotham Greens has emerged as one of the sector’s more resilient groups. The company operates facilities close to major metropolitan areas and focuses on supplying retailers with consistent volumes. Its strategy reflects a broader belief within the industry that proximity to consumers still offers an advantage, even as margins remain thin and expansion plans are restrained.

Elsewhere, consolidation has become more common. AeroFarms exited Chapter 11 bankruptcy with a narrower focus on microgreens after closing several sites. Plenty followed a similar path, filing for bankruptcy in 2025 and shifting towards more specialised production. Analysts increasingly describe these moves as necessary corrections after years of aggressive growth and optimistic assumptions about scale.

The broader picture is less dramatic than earlier narratives suggested. Urban demand for fresh produce remains strong, and the underlying technology is proven. What remains unresolved is whether large-scale indoor farming can reliably generate returns that justify its capital and energy requirements.

Vertical farming is not disappearing, but it is recalibrating. Survival now depends on tighter cost control, narrower crop selection and a clearer sense of where indoor agriculture offers a genuine economic advantage, rather than a universal solution to food production.