Vertical Farming Market

Global Vertical Farming Market Size (2023 to 2028)

The global hay market is expected to reach USD 3.73 billion by 2028 from USD 2.93 billion in 2023, growing at a compound annual growth rate (CAGR) of 24% during the forecast period from 2023 to 2028.

The commitment of vertical farming to sustainability and addressing pressing environmental concerns are majorly driving the growth of the global vertical farming market. Vertical farming is an innovative approach to agriculture and offers an eco-friendly alternative by utilizing less land and water compared to traditional farming methods. Moreover, vertical farming significantly reduces the need for harmful pesticides and herbicides, thereby promoting healthier ecosystems. One of its most significant contributions is minimizing the carbon footprint typically associated with conventional farming, as it often employs energy-efficient LED lighting and precise climate control systems. In a world increasingly alarmed by climate change and environmental degradation, vertical farming's promise as a sustainable and resource-efficient solution has never been more appealing. It not only supports a growing global population but also aligns with the growing demand for eco-conscious practices. As the urgency of environmental sustainability continues to mount, the vertical farming market stands as a beacon of hope and progress.

Technological advances in the vertical farming market are surging on the back of remarkable technological advancements that have revolutionized the way we grow crops. Automation, state-of-the-art LED lighting systems, precision sensors, and data analytics have collectively elevated vertical farming's efficiency and cost-effectiveness. These innovations enable growers to create precisely controlled environments, tailoring factors such as temperature, humidity, and light to maximize plant growth. Automation streamlines labor-intensive tasks, reduces operational costs, and ensures the consistent care of crops. LED lighting systems offer energy-efficient and spectrum-tailored illumination, promoting photosynthesis and accelerated growth. Precision sensors monitor every aspect of the growing environment, ensuring plants receive the ideal conditions. Data analytics process vast amounts of information, allowing growers to fine-tune resource usage and boost yields. These technological breakthroughs not only enhance crop quality and yield but also make vertical farming a sustainable and economically viable solution. As technology continues to evolve, the vertical farming market is set to further flourish, offering a promising future for agriculture.

High cost is a significant restraint in the vertical farming market as the advanced technology, automation, and precision environmental control systems translate to a significant financial commitment. This financial barrier can deter potential investors and aspiring growers from entering the field. The cost of acquiring specialized equipment, constructing controlled-environment facilities, and implementing automation can be daunting. This capital-intensive nature of vertical farming necessitates careful financial planning and access to substantial resources. As the industry evolves, creative financing solutions and incentives may also play a pivotal role in mitigating this restraint.

Impact of COVID-19 on the global vertical farming market:

The COVID-19 pandemic has had both detrimental and advantageous effects on the vertical farming market. The initial phase of the pandemic disrupted supply chains, making it challenging to source essential equipment and components for vertical farming operations. Travel restrictions and labor shortages also hindered the industry's growth, causing operational delays. Additionally, the economic uncertainties triggered by the pandemic made it more difficult for potential investors to commit to the high upfront costs associated with vertical farming. However, the pandemic highlighted the vulnerabilities of conventional agriculture and the importance of localized food production. As a result, interest in sustainable and resilient food supply chains grew, boosting awareness and investment in vertical farming. Furthermore, the ability of vertical farms to operate in controlled, isolated environments made them resilient to external disruptions, underscoring their potential for ensuring a steady supply of fresh produce even during crises. The pandemic accelerated the adoption of technology and automation, making vertical farming more efficient and attractive for investors and consumers alike.

REPORT COVERAGE:

This research report on the Vertical Farming Market has been segmented & sub-segmented based on the growth mechanism, structure, and region.

Global Vertical Farming Market – By Growth Mechanism:

• Hydroponics 
• Aeroponics 
• Aquaponics 

The hydroponics segment led the market in 2022. Hydroponics is one of the most used techniques in vertical farming and holds the largest market revenue share. It involves growing plants in a nutrient-rich water solution without soil. Hydroponics is popular due to its simplicity and versatility. Nutrient solutions are carefully monitored and delivered directly to plant roots, optimizing resource utilization and crop growth. 

Aeroponics is another efficient and water-saving technique used in vertical farming. It involves suspending plant roots in a mist or air environment and periodically spraying them with nutrient-rich solutions. Aeroponics allows for excellent aeration and nutrient absorption, promoting rapid plant growth. It is particularly effective for growing delicate and high-value crops, such as strawberries and certain herbs. While aeroponics offers advantages in terms of reduced water usage and precise nutrient delivery, it can be more complex to set up and maintain compared to hydroponics.

The aquaponics segment is expected to account for a substantial share of the worldwide market during the forecast period. Aquaponics combines plant cultivation with fish farming. However, aquaponics is less common in vertical farming compared to hydroponics and aeroponics due to the need for additional components and expertise in managing both aquatic and plant life. It is particularly well-suited for those looking to produce both crops and fish sustainably.

Global Vertical Farming Market – By Structure:

• Buildings
• Shipping containers

The building segment is ruling with the highest market share. Traditional buildings, such as warehouses or dedicated vertical farming facilities, provide ample space and flexibility for vertical farming operations. They offer more room for customizing environmental conditions, utilizing various vertical farming systems (e.g., hydroponics, aeroponics), and growing a wide range of crops. Buildings are typically well-equipped for utilities like water and electricity, making them a suitable choice for larger-scale commercial vertical farming operations. They allow for greater automation and can be adapted to accommodate the specific needs of different crops.

Shipping Containers have gained popularity in recent years for smaller-scale, modular, and mobile vertical farming operations. These compact and self-contained units are highly customizable and enable growers to establish farms in limited spaces or urban settings. Shipping container farms are known for their rapid deployment and reduced setup costs compared to dedicated buildings. They are suitable for growing a variety of crops, especially herbs and leafy greens. However, their size constraints may limit scalability and the types of crops that can be efficiently cultivated.

Global Vertical Farming Market - By Region:

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa

North America is dominating the market as it has witnessed substantial growth in the vertical farming market. North America can be attributed to factors such as a focus on local food production and a high level of technological advancement. The region has a mature market with numerous established vertical farming companies and significant investments. It benefits from a supportive regulatory environment and a growing demand for locally sourced, fresh produce.

Europe is another prominent region for the vertical farming market. Countries like the Netherlands and the United Kingdom have been at the forefront of vertical farming technology and innovation. Europe's dominance is influenced by its commitment to sustainable agriculture, reducing food miles, and ensuring food security. The region also receives government support and investments in vertical farming research and development.

Asia Pacific is rapidly emerging as a dominant force in the vertical farming market. This region is driven by a dense urban population, limited arable land, and a strong demand for high-quality produce. Governments and private investors in these countries are increasingly investing in vertical farming technologies and infrastructure.

Latin America is showing a potential growth rate for the vertical farming market, particularly in countries like Brazil and Mexico. The region is growing due to the need to counteract climate challenges, reduce food waste, and produce fresh food year-round. 

The Middle East has been exploring vertical farming to address water scarcity and extreme climate conditions. The region's dominance in the market is growing due to a strong interest in sustainable food production and food security. Vertical farming can help mitigate challenges related to extreme temperatures and limited water resources.

KEY MARKET PLAYERS:

AeroFarms, Bowery Farming, Plenty, Freight Farms, Illumitex, AEssenseGrows, Everlight Electronics, Green Sense Farms, Signify (formerly Philips Lighting), BrightFarms, Gotham Greens, Urban Crop Solutions, Sky Greens, Vertical Harvest, Agricool, Crop One Holdings, Jones Food Company, InFarm, ZipGrow, they are playing a dominant role in this market.

RECENT HAPPENINGS IN THIS MARKET:

• In 2023, AeroFarms expanded its vertical farming operations by opening new facilities equipped with advanced aeroponic technology for optimal crop growth.
• In 2023, BrightFarms focused on increasing its production capacity by opening additional vertical farms to meet the growing demand for locally-grown produce.
• In 2023, Freight Farms introduced smart vertical farming solutions incorporating IoT (Internet of Things) technology for remote monitoring and control of farm parameters.
• In 2022, Bowery Farming implemented data-driven farming practices using AI (Artificial Intelligence) and machine learning to optimize growing conditions and crop quality.