[Edaily Reporter Han Jeon-jin ] As extreme weather events—such as heat waves exceeding 40 degrees, torrential rains, and typhoons—become the norm, smart farms are rapidly making inroads into the fresh food supply chains of the retail industry. Although their share of the overall agricultural market is still small, this trend is gaining momentum as large hypermarkets and supermarkets increasingly partner with smart farm operators and expand the range of products they carry. Once viewed as a “testing ground” for the agriculture of the future, smart farms are now establishing themselves as an essential procurement option for reducing weather-related fluctuations in supply, demand, and quality.

◇Shining Brighter as Uncertainty in Production Areas Grows… Expansion of Smart Farm Sourcing
According to industry sources on the 9th, the number of smart farm operators doing business with retailers has been on the rise recently. The number of farms supplying smart farm produce to Lotte Mart has increased approximately ninefold, from about 10 in 2022 to 93 this year. The number of items handled has also more than doubled, from 11 in 2024 to 23 this year. The number of smart farm suppliers to GS Retail(007070)has also increased sixfold, from 2 in 2020 to 12 this year. By increasing transactions at the farm level, companies are broadening their procurement base.

Distribution volumes are also growing. Lotte Mart’s volume of smart farm vegetables more than doubled from approximately 160 metric tons in 2024 to 330 metric tons last year, and is projected to expand to about 400 metric tons this year. The volume of smart farm produce handled by GS Retail—including salads, fruit vegetables, leafy greens, and tomatoes—has also increased by 943.1% compared to 2020. Their share of total sales is also on the rise. For example, at Lotte Mart, smart farm vegetables accounted for 10% of total vegetable sales from January to July of this year.

In particular, as extreme weather events recur year after year, public perception of smart farms is changing annually. Their utility is expanding beyond simply being a method of producing agricultural products regardless of the season to serving as a complementary supply source capable of responding to fluctuations in crop yields at origin. Leafy greens, such as lettuce and romaine, are sensitive to high temperatures and humidity, which can reduce not only their yield but also their marketability during the summer. In contrast, smart farms allow for control over growing conditions—such as temperature and humidity—making them an alternative source for securing the necessary supply when crop yields in traditional growing regions are unstable.

In fact, this year saw another instance where the price and supply competitiveness of smart farms came to the fore during a period when the supply, demand, and market quality of conventional agricultural products were disrupted by abnormal weather. In late June, when demand for cucumbers peaked, Lotte Mart introduced approximately 7 metric tons of smart-farm cucumbers to compensate for a shortage in supply from conventional farms. During the summer, when the market quality of conventional lettuce declines, the retailer sourced European lettuce and sold it without raising prices. GS Holdings also sold romaine and Batavia lettuce grown in smart farms from June to July at prices approximately 10–20% lower than the prevailing market rates.

On the producer side, smart farm output is also increasing. Farm8, which supplies pesticide-free lettuce and other produce to large supermarkets, harvests 45–50 metric tons of lettuce per month from its indoor cultivation facilities. It can maintain this volume even during the summer when the quality of field-grown lettuce tends to decline. A Farm8 official explained, “Since pesticide-free, eco-friendly lettuce can only be grown in open fields for about four months a year, many farmers have given up on it,” adding, “We’ve solved this problem through indoor cultivation.”

◇The Key Advantage Is “Consistent Quality”… “Both Product Variety and Demand Will Grow”

Above all, companies are most focused on consistent quality. While the marketability of fresh produce can vary depending on crop conditions even for the same variety, smart farms—which control growing environments—are well-suited for ensuring relatively uniform quality. E-MART Co., Ltd.(139480)currently operates around 10 varieties of smart farm vegetables, including European greens such as Batavia, romaine, and butterhead, as well as basil, cilantro, and arugula. The volume of smart farm produce purchased by E-MART Co., Ltd.’s eco-friendly and value-conscious brand “Naturalism” from January to August this year increased by approximately 20% compared to the same period last year.

As customer demand grows, the product range is expanding from leafy greens to include fruits and vegetables. GS Retail plans to expand its smart farm product lineup to include fruits such as strawberries in the second half of the year, while Lotte Mart is currently offering products year-round, including European lettuce from Buyeo and smart farm lettuce from Gimje. E-MART Co., Ltd. is also considering expanding its use of various types of smart farms to secure stable supply and quality. Companies are moving beyond the trial phase and are now factoring smart farm supplies into their procurement plans from the very beginning. This is why this year is seen as a turning point for widespread adoption.

Of course, the smart farm market is still in its early stages, and its limitations are clear. Compared to open-field cultivation, the initial facility investment costs and energy expenses for heating, cooling, and lighting are several times higher, and the range of crops that can be grown is limited. In particular, while the advantage of stable production becomes more pronounced during severe heat waves or cold snaps, the costs of maintaining the growing environment also rise accordingly. Only operations with sufficient economies of scale to cover these costs can remain viable. Consequently, lowering barriers to entry by improving production efficiency through technological development and enhancing economic viability are considered key to future expansion.

Moon Jeong-hoon, a professor in the Department of Agricultural Economics and Rural Sociology at Seoul National University, stated, “The handling of smart farm produce is increasing as the strengths of smart farms—which enable production even outside of the natural growing season—align with the demand from distributors seeking consistent quality year-round.” He added, “Since production volumes are also rising, smart farm produce will appear on our tables more frequently in the future.” However, he added, “Since the crops that can currently be cultivated are limited to leafy greens, tomatoes, bell peppers, and strawberries, research and development (R&D) on related cultivation technologies must continue.”