Ocado makes £17m investment in vertical farming industry

Ocado shares rallied on Monday after the online grocer said it was making a £17m investment in the vertical farming industry.

The company said it has formed a joint venture, Infinite Acres, with vertical farming participants 80 Acres Farms and Priva Holdings. Each of the parties will hold a third of the equity in the JV. Acres Farm is based in the US, while Priva is based in the Netherlands.

In addition, Ocado has bought a 58% stake in Scunthorpe-based Jones Food Company, which is the largest operating vertical farm in Europe.

Vertical farming is the practice of producing food in vertically stacked layers, vertically inclined surfaces and/or integrated in other structures. Its benefits include low wastage, the usage of less water and the need for smaller land areas.

Chief executive officer Tim Steiner said: "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 revolutionise the way customers access fresh produce.

"Our hope ultimately is to co-locate vertical farms within or next to our Customer Fulfilment Centres (CFCs) and Ocado Zoom's microfulfilment centres so that we can offer the very freshest and most sustainable produce that could be delivered to a customer's kitchen within an hour of it being picked."

Numis, which rates Ocado at 'buy', said: "These investments present an opportunity for Ocado to leverage its technologies in a related industry whilst building expertise in vertical farming with a view to co-locating facilities with CFCs."

At 1140 BST, the shares were up 3% at 1,147p.