Japanese LED plant factory under the epidemic

"Plant factories" that produce vegetables by controlling the growing environment have attracted widespread attention due to the novel coronavirus outbreak. Vegetables produced in plant factories are generally sold in bags and are favored by consumers for their cleanliness and hygiene. Due to the improvement of production efficiency, the original high price has been reduced, which has also blown a shareholder wind into the plant factory. The presence of plant factories has increased as a stable food supply channel in response to the shortage of successors in agriculture and climate change.

7 years ago, Japan's Kidaya Store (Urayasu City, Chiba Prefecture), which entered the field of plant factories from a supermarket, set up three factories in Fukui and Shizuoka. With lettuce as the center, the daily production capacity reaches 34,000 pieces. Although orders from restaurants have decreased, the company conducts online sales through the fresh ingredients sales company "Oisix Ra Dadi". From April to May, online sales doubled from last year, and sales to supermarkets increased by 20%.

The lettuce produced by the factory does not use pesticides, and each bag is only about 80 grams, which can be eaten by a single person at one time, which is very popular among consumers. After the outbreak of the new crown epidemic, the Kitianya store said that "the characteristics of individual packaging and cleanliness have also begun to be favored."

Storefront prices for lettuce at the Kidaya store start at 128 yen for 80 grams. Among the factory vegetables, the price is the cheapest. The price of lettuce grown in the open air in the farmland is 20 to 110 yen (converted to 80 grams) in the supermarket, so the price of lettuce at the Kidaya store is still high, but because of the stable quality and production, more and more people are negotiating business.

There are 386 plant factories in Japan

From a global perspective, Japan is a country with a large number of plant factories. As of February, there were 386 plant factories in Japan, according to the Japan Association for Facility Horticulture (Chuo-ku, Tokyo). Due to excess equipment, 40% of the small-scale experimental facilities suffered losses. Because the development of sales is too simple, many companies have withdrawn from the business one after another.

But Yasushi Miwa of the Japan Institute of Research said recently "the light is beginning to be seen in terms of earnings". The reason for this is the accumulation of technologies and cultivation knowledge that can reduce water, electricity, heating and labor costs, and the growing scale of plant factories. The Kidaya shop has found out the light intensity that can also grow vegetables by layering the cultivation board containing the solution, thereby improving the production efficiency. Profits are also achieved by lowering logistics costs with mixed-load vehicles. The more power-efficient light-emitting diode (LED) lights are also getting cheaper.

Spread (Kyoto City), which supplies products to Ito-Yokado and others, opened a second lettuce factory in Kizugawa City, Kyoto Prefecture in 2018. The daily output reaches 30,000 pieces, which is the largest in the world, and 70% of the processes such as moving lettuce to a 10-meter-high rack have been automated. The suggested retail price of leaf lettuce (80-100g) is 158 yen (excluding tax), which is 40% lower than in 2008. The company is also partnering with NTT Group for data collection. Use artificial intelligence (AI) technology to increase efficiency and challenge lower prices.

This trend has attracted more companies to set foot in the field of plant factories. Spread began to promote franchising to provide operational technology experience. Aid is currently being provided to Japan's oil distributor ENEOS Group for its plant factory to be completed by the end of 2020.

There is room for growth in the commercial sector

Japan's PLANTS LABORATORY (Minato-ku, Tokyo) expands its business scope with simple facilities. In collaboration with the University of Tokyo, the company has developed a plant factory system using low-cost agricultural plastics. The introduction cost is only about one-third of the original. The company has not only set up small factories in some Seiyu stores, but also cooperated with JR East Japan Group to cultivate under the viaduct.

Businesses have ventured into plant factories out of concerns about sourcing food.

In Japan, where the food self-sufficiency rate is less than 40%, the agricultural employment population in 2019 decreased by 35% compared with five years ago, and the average age has reached 67 years old. Affected by the new crown epidemic, foreign technical interns cannot come to Japan, and the harvesting work of many farmers has been affected. Plant factories are not affected by an increasingly unstable climate, and they can maintain stable harvests and prices with limited manpower and space, so they have attracted much attention.

In addition to supermarkets, the demand for factory vegetables has a lot of room for growth in the commercial field. For example: salads in convenience stores and restaurants, and clean dishes for home-cooked dishes, which have grown in demand with the increase in dual-earner families. Less bacteria, easy to store, can save the trouble of washing vegetables, and the size is consistent, and the appearance is good.

According to Fuji Economic statistics, in the face of Japan's annual demand for lettuce of 550,000 tons, the supply of plant factories is about 17,000 tons in 2019, accounting for about 3% of the market. It is expected that by around 2030, the supply will reach 62,000 tons, and the market share will exceed 10%.