Ocado is getting into the vertical farming business.
The British online supermarket announced Monday that it had made two key investments in the burgeoning industry totalling 17 million pounds (CDN $28.6 million).
(With vertical farming, produce is grown indoors in stacked levels under LED lighting. It has been hailed as the new future for food production, because it offers year-round crop production with less land requirement and less water use.)
In a press release, Ocado said it had formed a three-way venture called Infinite Acres with 80 Acres and Priva. Priva is a Netherlands-based industrial systems provider with a wide range of products for climate control and process automation. U.S.-based 80 Acres is a "leading vertical farming business with a deep level of plant science knowledge and operations management."
Additionally, Ocado acquired a 58% stake in Jones Food Company, which it said is Europe's largest operating vertical farm.
Ocado CEO Tim Steiner said the hope was to co-locate vertical farms within or next to its customer fulfillment centres so it can offer the "freshest most sustainable produce that could be delivered to a customer’s kitchen within an hour of it being picked."
“We believe that our investments today in vertical farming will allow us to address fundamental consumer concerns on freshness and sustainability and build on new technologies that will revolutionize the way customers access fresh produce," he said.
READ: Ocado CEO debunks 3 myths about online grocery
Ocado is known for its fulfillment automation and delivery technology it licensees to grocery retailers. It inked a deal with Sobeys to bring its e-commerce platform to Canada and is partnering with Kroger in the U.S.