Analysis of Vertical Farming Business Model : Swegreen Case Study

Abstract: The world's population is projected to increase to 9 billion by 2050 according to the Food and Agriculture Organization, FAO (2020), and this growth in the earth's population is anticipated to put great pressure on the existing natural resources. It will increase food demand which would intensify agricultural production. Vertical farming (VF) is a new method to grow crops by artificially growing plants vertically on stacked layers. It provides opportunities for sustainable crop growth by minimizing water use, increasing productivity per unit area, and reducing fertilizer/pesticide use which leads to maintaining the ecosystem's health and to protect the crops from climate-related disasters. More than 80% of the fruits and vegetables consumed are imported to Sweden, which is associated with devastating climate side effects such as transportation, keeping and cooling. VF can fulfil the everyday demands of consumers in Sweden for fresh nutrients and is an aspect of flexible feeding methods - particularly in and near densely populated regions. VF currently produces a limited range of vegetables and plants that are more expensive than conventional agricultural products, and although it has many environmental and social benefits in terms of sustainability, it also needs to improve economic profitability. The purpose of this thesis is to examine how this industry can be economically viable. To achieve this goal, reviewing the literature on the Business Model Canvas (BMC), SWOT analysis of the company and its business model, and three dimensions of sustainability are used to create a theoretical framework. To gain an in-depth understanding of the business model, a case study was conducted with a vertical farming company in Sweden called Swegreen, and data on business model analysis and SWOT analysis were collected through an interview. Based on the findings, the company changed its business model from B2C to B2B based on past experiences to stay consistent in the economic sector and reduce costs. According to SWOT analysis of the BMC, the company almost has equal strengths and weaknesses in implementing the nine building blocks, but the opportunities ahead outweigh their threats, which indicates that the industry is still young and has a bright future ahead.