Key Takeaways

The Industry’s Biggest Crop Pivot

Something notable is happening in vertical farming strawberries and hydroponic berry production: the industry’s most well-capitalized operators are making the same bet simultaneously. Plenty shifted its entire Richmond, Virginia facility to strawberry production. Oishii raised $150 million to scale premium berry farming. Driscoll’s—the world’s largest berry brand, controlling roughly a third of the North American market—is investing in hydroponic strawberry R&D. Bloomberg reported in mid-2025 that the industry is converging on berries and microgreens as the crop categories most likely to sustain profitable indoor operations after the bankruptcy wave.

This is not a coincidence, and it is not hype. It is the result of a painful multi-year process of elimination. The operators who survived the 2022–2024 shakeout learned hard lessons about which crops can actually support the cost structure of indoor production. Leafy greens—the default crop for most early vertical farms—turned out to be a brutal commodity play. Margins were thin, competition from field-grown and greenhouse producers was fierce, and differentiation was difficult when the product looked identical on the shelf. Why Vertical Farms Keep Failing — And What the Survivors Are Doing Differently

Strawberries offer something fundamentally different: a crop where controlled-environment production creates a genuinely distinct product that consumers will pay meaningfully more for.

Why Strawberries Work Indoors

The economics of indoor strawberry production rest on a few structural advantages that don’t apply to most other crops.

Premium pricing is the most obvious. Consumers already pay significantly more for strawberries marketed as local, pesticide-free, and vine-ripened. Indoor-grown berries check all three boxes and add a fourth: year-round availability. During winter months, when field-grown strawberries are either unavailable or imported from Mexico and South America at higher cost and lower quality, indoor production commands peak pricing with minimal competition. The off-season window is where the real margin lives.

Year-round consistency eliminates the volatility that makes fresh produce such a difficult business. Field strawberry production is seasonal, weather-dependent, and increasingly disrupted by climate events. A controlled indoor environment produces the same berry in January that it produces in July—same flavor profile, same appearance, same shelf life. For retail buyers trying to maintain consistent produce sections, that reliability has real value.

Yield density is compelling. Multi-tier hydroponic setups are achieving up to 12.5 kilograms per square meter, roughly double what traditional field operations produce per unit area. When you can stack growing levels vertically, the effective yield per square foot of facility footprint becomes a significant multiplier. 5 High-Value Crops That Actually Make Money in Vertical Farming

The Challenges Nobody Should Ignore

The excitement around indoor strawberries is warranted, but the challenges are real and substantially greater than leafy green production. Anyone entering this space should understand what they’re signing up for.

Pollination is the first major hurdle. There are no natural pollinators indoors. Every commercial indoor strawberry operation needs a pollination strategy—typically managed bumblebee colonies, mechanical pollination systems, or manual hand-pollination. Each approach has trade-offs in cost, reliability, and scalability. Bumblebee colonies require careful environmental management (temperature, humidity, airflow) to keep colonies healthy and active. Mechanical systems add equipment cost and maintenance. Manual pollination is labor-intensive and doesn’t scale well. Getting pollination wrong doesn’t just reduce yields—it produces misshapen, unmarketable fruit.

Energy consumption runs significantly higher than leafy greens. Strawberries need more light (higher DLI targets), more precise temperature cycling between day and night, and longer production cycles. Industry estimates suggest energy inputs run two to three times higher per kilogram of harvested fruit compared to lettuce or herbs. In markets where electricity costs exceed $0.10 per kilowatt-hour, energy alone can determine whether the operation is viable.

Climate control complexity is a step up from leafy greens. Strawberry plants are more sensitive to temperature differentials, humidity swings, and airflow patterns. Fruiting crops require a more sophisticated environmental management approach—dialing in specific temperature drops at night to trigger flowering, managing humidity to prevent botrytis (gray mold), and ensuring airflow that strengthens stems without desiccating blossoms. Precision environmental control systems designed for fruiting crops, not just leafy greens, become a prerequisite rather than a luxury.

Research from the University of Georgia has added useful nuance to the growing system question. Their studies found that substrate-culture systems outperformed water-culture methods (NFT and DWC) for strawberry production in both yield and resource efficiency. However, vertical tower configurations showed promising results, suggesting that optimized tower systems may close the gap as the technology matures. Hydroponics, Aeroponics, or Aquaponics? Choosing the Right Growing System for Your Farm

The Operators Making the Bet

The companies leading the strawberry pivot are taking distinctly different approaches, and those differences are instructive.

Oishii positioned itself at the ultra-premium end from the beginning, selling Japanese-inspired Omakase strawberries at price points that would make most produce buyers flinch. Their $150 million fundraise is a bet that the luxury market for indoor-grown berries is deep enough to support large-scale production. The strategy only works if the premium holds as supply increases—a question that hasn’t been fully answered yet.

Plenty made perhaps the most decisive strategic shift, pivoting its entire Richmond facility away from leafy greens and toward strawberries. This is a company that raised over $900 million and built one of the largest vertical farms in the world. The decision to move entirely to berries signals a conclusion that leafy greens alone couldn’t deliver the unit economics Plenty needed—and that strawberries could.

Driscoll’s involvement changes the equation for the entire category. When the dominant berry brand invests in hydroponic R&D, it signals that indoor strawberry production is moving from niche experiment to mainstream supply chain consideration. Driscoll’s brings distribution infrastructure, retail relationships, and brand recognition that no startup can replicate. If they validate the model, the scaling path becomes clearer for the rest of the industry.

The Market Opportunity in Numbers

The US hydroponic farming market is expected to grow at roughly 20 percent CAGR through 2028, and strawberry-specific production is among the fastest-growing segments within that trajectory. Production is expanding not just in North America but across Europe, Asia, and the Middle East, where water scarcity and food security concerns create additional demand drivers.

Some vertically integrated operations are reporting 50 to 60 percent profit margins on indoor strawberries, with capital payback periods of approximately three years. Those numbers come with important caveats: they typically reflect operations selling direct to retailers (bypassing distributors), leveraging heavy automation to control labor costs, and operating in markets where they can command the full premium. Not every operator will achieve those margins, and the operators publishing those numbers have an incentive to present their best-case scenarios.

The more realistic picture for most new entrants is probably thinner margins during the first two to three years as teams develop pollination protocols, optimize climate recipes, build retail relationships, and work through the learning curve that comes with any new crop. The operators who succeed will be the ones who plan for that ramp period rather than modeling for day-one profitability.

What This Means for Growers

The strawberry pivot is the clearest sign yet that the indoor farming industry is maturing past its first-generation assumptions. The survivors of the bankruptcy wave are not doubling down on the same crops that led to commodity traps—they are moving toward higher-value products where indoor production creates genuine differentiation.

For operators considering strawberries, the path forward requires more capital, more technical sophistication, and more patience than leafy green production. Pollination management, precise environmental control, and higher energy inputs are non-negotiable. But the reward is a product with real pricing power in a market where consumers have already demonstrated willingness to pay for quality.

The next twelve months will be telling. Plenty’s Richmond facility will provide data on whether a large-scale vertical farm can produce strawberries at competitive unit economics. Oishii’s expansion will test whether the ultra-premium segment can absorb more volume. Driscoll’s R&D will signal whether the conventional berry industry sees indoor production as a complement or a threat.

The industry bet on leafy greens first. The results were mixed at best. The bet on berries is better-informed, better-capitalized, and aimed at a market segment where indoor farming’s structural advantages—consistency, quality, locality—actually command a premium. Whether that’s enough to make the economics work at scale is the question that 2025 and 2026 will answer.