As Reuters reported earlier this week, Panasonic has started selling produce to a chain of restaurants in what it is calling the “first licensed indoor vegetable farm in the island state.”
“The facility has a small production capacity of 3.6 tonnes annually and produces 10 types of vegetables like mini red radishes and baby spinach.” With the goals of transforming just 3.6 annual production tons to 5% of local vegetable production, Panasonic has some catching up to do to compete with Sky Greens.
Even in terms of potential, Panasonic Factory Solutions is limited by available land. They are currently confined to a 813 square foot (248 meters) facility, dwarfed by Sky Greens 3.2 acres. Assuming the same profit model used to evaluate Sky Greens above, 3.6 annual tonnes is only grossing Panasonic a paltry $22,500 in that space. I know these calculations are missing a lot of important information; they are just there to illustrate how each businesses is in very different places in their development.
Of course, Panasonic isn’t just producing xiao bai cai either. In fact, in terms of retail costs of all it’s other products, Panasonic is actually beating Sky Greens. The restaurants Panasonic supplies actually pay 50% less than it would if they purchased Japanese imports.
This is only the beginning and Panasonic Factory Solutions already has a lot going for it. The weight of an industrial giant like Panasonic is not inconsequential:
“We foresee agriculture to be a potential growth portfolio, given the global shortage of arable land, climate change and increasing demand for quality food as well as stable food supply,” Hideki Baba, managing director of Panasonic Factory Solutions Asia Pacific, told reporters.
The video below not only showcases the farm in operation, but also hints at Panasonics regional aspirations as a primary food supplier.
Once a corporation embraces a new technology, a lot can get done. In general terms, the Panasonic Factory Solutions facility is another iteration of controlled environment agriculture (CEA), but uses surprisingly traditional technology. One distinct advantage is that Panasonic already has the manufacturing-infrastructure to produce the low cost LED lights that its new farm runs on.
Despite its conventional approach, Panasonic projected that the constant environmental conditions in its facility will halve the time of the traditional outdoor production cycle and be 10 times more efficient than traditional farms. That estimate is right at the high end of Sky Greens’ results.
In the Panasonic model, traditional, soil-based agriculture is fed by precise led light blends in a sealed environment to control temperature, humidity, and pathogens. However, Panasonic intensifies production in the available space by multilevel stacking of the crops and seems to be ready to go vertical if it plans to achieve its supply goals. As always, one obstacle to this plan could be the increased weight of the crops due to the soil-based methods. This would require more expensive architectural support.
Regardless of its glossy feel, Panasonic’s marketing has less an emphasis on technology than Sky Greens, but it still relies on the tried and true appeal of feeding the world. According to Alfred Tham, Manager of the Agricultural Business, “The solution will involve a mixture of technology and traditional farming techniques.” That’s good news, especially if that sincerity is applied throughout the region.