Agrifood Innovation: Vertical Farming, Alternative Proteins & Waste-to-Value Businesses

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You’re listening to Unlocking Liquidity, powered by PrimaryMarkets. In this episode we explore Vertical Farming, Alternative Proteins and Waste-to-Value Businesses. In an era marked by mounting environmental pressures, rapidly evolving consumer preferences, and intensifying supply chain disruptions, the agrifood sector finds itself at a pivotal crossroads. Traditional food production models are under scrutiny for their ecological footprint, extraction of finite resources, and vulnerability to climate fluctuations. Against this backdrop, forward-looking businesses and researchers are pioneering transformative solutions namely vertical farming, alternative proteins, and waste-to-value models that promise to redefine the future of food, advancing sustainability while delivering robust commercial value.

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Vertical farming growing crops in vertically stacked layers under controlled environmental conditions offers compelling advantages significant water savings, year-round production, minimal land use, and proximity to urban demand centers. In Australia, its potential has begun to materialize through ambitious ventures. For example, Gold Coast-based Stacked Farm, currently Australia’s largest vertical farming operation, cultivates strawberries, tomatoes, baby lettuce, and coriander across a 4,000 sqm fully automated facility that yields 400–440 tonnes annually depending on the crop. Committed organizations such as Australian Urban Growers are also fostering grassroots expansion by providing scalable, affordable vertical farming solutions and education to regional communities.

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This burgeoning sector, however, is not without its challenges. Globally, high energy costs and complex operational demands have led to the collapse of high-profile startups. For instance, Bowery an acclaimed vertical farming unicorn closed down after raising over USD 700 million in venture capital, as the economics of raising produce in high-cost environments collided with consumer reluctance to pay premium prices. Closer to home and in adjacent markets, firms such as Infarm in Europe have downsized operations due to energy inflation and profitability concerns. These cautionary tales underscore the critical importance of operational efficiency, scalable business models, and market alignment.

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In Australia, vertical farming must navigate unique constraints elevated energy costs, volatile electricity markets, and limited scale. Nonetheless, it offers strategic opportunities. Ventures targeting high-value, perishable crops or serving municipal infrastructure like hospitals, schools, or food deserts stand a better chance of achieving economic viability. Australian success stories to date remain relatively limited, with most operations still in pilot or niche phases.

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Alternative proteins encompass plant-based meats, precision-fermented ingredients, cultivated cell-based meat, insect-derived ingredients, and ancient grains or seeds. Globally, investments in this sector surged with the alternative protein industry raising a record USD 5 billion in 2021 alone, nearly triple the amount in 2019. The growth trajectory extends to Australia, with networks and collaborative infrastructures emerging to scale domestic innovation.

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Australia and New Zealand’s alternative protein ecosystem is supported by advocacy and coordination through the Alternative Proteins Council, established in March 2021, which serves as the industry’s peak body in the region and fosters dialogue across plant-based, precision fermentation and cultivated meat technologies. Further institutional reinforcement comes via the ALT PROTEIN CRC, a collaboration between industry, research institutions and government aimed at building an alternative protein industry in Australia. Australian R&D and consumer trends increasingly favor plant-based and insect-protein ingredients, with insect-based proteins gaining momentum in processing and feed applications.

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Business models focused on alternative proteins in Australia face several critical success factors product performance taste, texture, cost-competitiveness, regulatory approval, and consumer acceptance. While some well-funded global brands struggle with profitability and scaling, Australian players have opportunities in niche, high-value applications like nutraceuticals, pet food, and functional foods, particularly where domestic provenance and sustainability resonate with consumers.

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Perhaps the most compelling frontier in agrifood innovation lies in transforming waste streams into value embracing a circular economy that turns by-products and municipal refuse into commodities. In Australia, two pioneering firms exemplify this model ARC Ento Tech and Extracta.

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ARC Ento Tech, headquartered in New South Wales, has developed a patent-pending system the ARC Process that employs the black soldier fly to biologically digest mixed solid waste. The resulting outputs are the high-grade insect meal known as ARCMeal and a nutritious fertilizer, while non-digestible materials like plastics and paper are converted into Refuse-Derived Reductant RDR a low-cost alternative fuel to coal or metallurgical coke. Recent reporting shows ARC Ento Tech has turned a previous AUD 1 million loss into a AUD 1 million profit, is operating across three landfill sites, and generates pipeline revenue projected at AUD 1.5 million per month. The company is targeting AUD 39 million in revenue by FY 2026 and AUD 101 million by FY 2028, while pursuing a AUD 4 million capital raise. Key partnerships include Qantas, Sanitarium, and Hawkesbury City Council which has commissioned a 25-tonnes-per-day facility.

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Meanwhile, Extracta, based in New South Wales, converts agricultural by-products such as grape marc, sugarcane husk and orange peel into high-value, nutrient-rich ingredients for the nutraceutical, food, cosmetic and personal-care industries. The company has secured three significant government grants, established operations with sales contracts both in Australia and the USA, and achieved product margins between 70–90% domestically 50–70% in US markets. Extracta’s factory is fully operational, and its intellectual property strategy is reinforced through partnerships with Macquarie University and Queensland University of Technology.

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These examples vividly illustrate how waste-to-value models align commercial incentives with environmental stewardship. ARC Ento Tech provides scalable industrial solutions to hard-to-process waste, repurposing it into feed, fertilizer, and energy. Extracta demonstrates how low-cost raw materials can be transformed into high-margin ingredients in wellness, food, and cosmetic markets sectors where sustainability and traceability command premium prices.

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Beyond these innovators, Australia’s broader agrifood ecosystem is embracing circularity. For example, Nutri-V leverages CSIRO-developed science to convert fresh vegetable waste into powdered ingredients for retail food applications, reinforcing circular integration across the supply chain. Similarly, large-scale investments are emerging: Queensland veggie producer Kalfresh Vegetables secured approval for a AUD 291 million bioenergy facility in South East Queensland, capable of processing 388,000 tonnes of agricultural and food waste annually to produce electricity, natural gas, and biofertilizer-supporting a closed-loop system with significant carbon offsets and job creation. These developments extend the waste-to-value narrative to industrial scale, reinforcing circular economy’s central role in future agrifood systems.

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The convergence of vertical farming, alternative proteins, and waste-to-value innovation signals that agrifood’s future will be shaped by integrated, multi-disciplinary strategies. Each domain offers unique leverage:

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Vertical farming mitigates resource use and delivers hyper-local production, but must solve energy and cost-efficiency puzzles to thrive.

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Alternative proteins promise dietary transition and resource efficiency, yet firms must overcome scaling, regulation, and consumer inertia.

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Waste-to-value models deliver environmental and economic wins by turning liabilities into assets but require technology validation, regulatory support and strong market demand.

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Australian innovators are well positioned to capitalize on these trends. The country’s strong R&D infrastructure, growing ESG environment, social, governance investor interest, and regional agricultural strengths provide fertile ground for experimentation and scale-up. However, policy frameworks, such as carbon pricing, food-waste diversion targets, and R&D incentives, will play a pivotal role in catalyzing investment and adoption.

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Businesses should prioritize cross-sector collaboration for instance, vertical farms could incorporate alternative protein production from waste inputs, or waste-to-value firms could supply circular ingredient inputs to alternative protein manufacturers. Brand partnerships linking sustainability, provenance, and innovation can bring differentiated products to consumers.

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Agrifood innovation, anchored in vertical farming, alternative proteins, and waste-to-value models is redefining how Australia can produce, process, and repurpose food. While each sector faces distinct challenges, they share a common imperative creating economic value through sustainable transformation. Australian success stories like ARC Ento Tech and Extracta showcase how smart tech and circular approaches can transform waste into profitable, scalable business models. For agribusiness leaders, investors, policymakers, and researchers, the pathway forward lies in embracing interdisciplinary strategies, aligning incentives across environmental and commercial goals, and building the collaborative ecosystems that will drive agrifood’s resilient and sustainable future.

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