Vertical Farming Market Share, Size, Trends, Industry Analysis Report, By Growth Mechanism (Aeroponics, Hydroponics, Aquaponics), By Structure, By Components, By Crops, By Region, Segments & Forecast, 2024 – 2032
- Published Date:Jan-2024
- Pages: 116
- Format: PDF
- Report ID: PM1019
- Base Year: 2023
- Historical Data: 2019-2022
Report Outlook
The global vertical farming market was valued at USD 6746.06 million in 2023 and is expected to grow at a CAGR of 18.6% in the forecast period. The declining arable land and water scarcity are the two prime supporting factors for the growth of the market in the last few years. Other reasons, including increasing demand for fresh and locally grown produce, advancements in technology and automation, and the growing awareness of the benefits of sustainable agriculture, are boosting the market in the forecast period.
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The farming method is an ingenious method of agriculture that entails growing crops in vertically stacked layers, often indoors. This farming method uses technologies, including aquaponics, hydroponics, and aeroponics, to provide plants with the necessary nutrients, water, and light for growth. It artificially controls factors such as light, humidity, and temperature to maximize crop production in a limited space, which enables year-round crop production under controlled indoor environments.
The farming technique has various advantages over conventional farming methods. For example, it allows for the efficient use of space, as crops can be grown vertically stacked layers, requiring less land than traditional farming methods. It makes vertical farming a promising solution for urban areas where space is limited.
Additionally, it can be done year-round, regardless of weather conditions or seasonal changes. It also allows for precise control of growing conditions, such as temperature, humidity, and light, resulting in higher yields and faster growth times. The method can also be done with significantly less water usage than traditional farming methods. Water can be recirculated and reused within the system, reducing waste and optimizing water usage.
For instance, as per FAO's "The State of the World's Land and Water Resources for Food and Agriculture" report, the FAO has estimated that the agriculture sector must produce about 50% more food, biofuel, and livestock fodder in 2050 than in 2012 to meet the global demand and achieve zero hunger by 2030. The report further highlighted the depletion of more than 125 million hectares of agricultural land from 4,880 Mn ha in 2000 to 4,752 Mn ha in 2019. In addition, according to the research, the water availability per capita in sub-Saharan Africa has declined by 40 % over the past decade.
The covid 19 pandemic has moderately impacted the production rate through the farming technique. On the positive side, the period has highlighted the importance of locally sourced food and increased the demand and other forms of indoor agriculture, as they can provide fresh produce year-round, regardless of weather or other environmental factors. In addition, the pandemic has also led to increased interest from investors. Investors see the potential for indoor agriculture to provide a sustainable and efficient solution to food production, and many are willing to invest in the sector despite the current economic climate.
While on the negative side, the pandemic period has hampered the market owing to factors such as supply chain disruptions and labor shortages. The pandemic has caused disruptions in global supply chains, making it more difficult for traditional farmers to get their products to market.
One of the primary challenges that the market faces is the higher initial investment required to set up and operate a vertical farm. Some factors that contribute to the higher investment costs include equipment and technology costs, facility costs, energy costs, and labor costs. Besides higher capital costs, other factors are projected to hamper the market's growth, such as limited crop selection, higher energy consumption, and other regulatory challenges.
Industry Dynamics
Growth Drivers
The declining arable land and water crisis are two driving factors for the vertical farming market growth. Arable land is suitable for growing crops, and it is estimated that approximately one-third of the world's arable land has been lost to erosion, desertification, and urbanization. It has created a need for alternative methods of agriculture, such as vertical farming, that can produce crops in smaller spaces.
The farming method allows for the efficient use of space and resources, as crops can be grown in vertically stacked layers, requiring less land than traditional farming methods. Additionally, farming can be done in urban areas, bringing fresh produce closer to consumers and reducing transportation costs and emissions. The farming technique has the potential to significantly reduce water usage in agriculture, as it allows for precise control of water delivery to plants, reducing waste and optimizing water use.
The increasing demand for fresh and locally grown produce is a significant driving factor for the market. Consumers are increasingly interested in where their food comes from, how it is grown, and the environmental impact of food production. The method located in urban areas, closer to consumers, reduces transportation costs and carbon emissions associated with food distribution. The approach is more sustainable than traditional farming methods, with lower water usage, reduced pesticide and herbicide use, and a smaller environmental footprint.
Report Segmentation
The market is primarily segmented based on growth mechanism, structure, components, crops, and region.
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By Growth Mechanism |
By Structure |
By Components |
By Crops |
By Region |
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The Hydroponics Segment is Accounted to Dominate the Market in 2022
Hydroponic systems use less water than traditional farming methods, as the water is recirculated in a closed-loop system. It can lead to up to 90% water savings, making hydroponics a more sustainable and environmentally friendly method of growing crops.
The systems can accelerate plant growth due to the controlled growing environment, resulting in quicker harvest times and a higher volume of crops produced per year. It provides optimal growing conditions, leading to higher crop yields than traditional farming methods. It is because plants grown hydroponically receive the exact amount of nutrients, light, and water they need to grow, resulting in healthier and more productive plants.
Building-Based Vertical Farms Segment was Leading the Market in 2022
Building-based vertical farms in the market have grown in recent years. Building-based vertical farms are an innovative way to produce fresh, nutritious, and sustainable food in urban areas with limited space. Factors responsible for the segment's growth include space optimization, reduced transportation costs, a controlled environment, and higher crop yields.
Building-based vertical farms use underutilized space in buildings such as rooftops, abandoned buildings, and industrial spaces. It allows for the efficient use of space in densely populated urban areas. It also reduces transportation costs since they are located within or near urban areas where the food is consumed. It reduces the carbon footprint of transporting food from rural to urban areas.
The Climate Control Segment is Projected to Witness the Quickest Growth Rate in the Forecast Period
Climate control is a crucial component in the market, as it allows growers to create an ideal environment for their crops. The climate control components in the market include HVAC systems, CO2 generators, sensors and controllers, insulations, and water systems.
Growth factors of the segment can be attributed to the benefits of climate control components in vertical farming, including consistent and optimized growing conditions, reduced risk of crop failure, increased energy efficiency, flexibility in crop selection, and year-round crop production.
North America Region is Projected to Account for a Major Market Share in the Forecast Period
The market in North America is experiencing significant growth and is expected to expand in the coming years. The major driving factors in the region are increasing adoption by commercial growers and growing demand for locally grown, fresh produce.
Consumers in North America are increasingly concerned about traditional agriculture's environmental impact and seek locally grown, fresh produce free from pesticides and herbicides. Farming provides a solution to these concerns by allowing crops to be developed in a controlled environment that can be located near urban centers, reducing the need for transportation and associated emissions.
Commercial growers in North America are increasingly adopting the farming method to increase efficiency and profitability. For example, this farming allows growers to produce more crops per square foot of space, reducing the need for land and lowering costs.
Competitive Insight
Some of the prominent key players operating in the Marketspace includes Aerofarms, Infarms, SweGreen, skyGreens Pte Ltd., Jones Food Company, Signify, Sky Greens, Freight Farms, Valoya, Osram, Heliospectra AB, Osram, Urban Crop Solutions, Plenty Unlimited Inc.
Recent Developments
- February 2023: Aerofarms has agreed with PIF to build and operate the largest indoor vertical farm in Saudi Arabia and the MENA region.
- October 2022: Urban Crop Solutions (UCS) and Rudi Pauwels have agreed to establish a research center for indoor farming applications in Southern Spain, which is likely to work for optimizing the nutrient content.
Vertical Farming Market Report Scope
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Report Attributes |
Details |
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Market size value in 2024 |
USD 7905.7 million |
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Revenue forecast in 2032 |
USD 30,911.23 million |
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CAGR |
18.6% from 2024 - 2032 |
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Base year |
2023 |
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Historical data |
2018 - 2022 |
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Forecast period |
2024 - 2032 |
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Quantitative units |
Revenue in USD million and CAGR from 2024 to 2032 |
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Segments covered |
By Growth Mechanism, By Structure, By Components, By Crops, By Region |
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Regional scope |
North America, Europe, Asia Pacific, Latin America, Middle East & Africa |
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Key companies |
Aerofarms, Infarms, SweGreen, skyGreens Pte Ltd., Jones Food Company, Signify, Sky Greens, Freight Farms, Valoya, Osram, Heliospectra AB, Osram, Urban Crop Solutions, Plenty Unlimited Inc. |
Gain profound insights into the 2024 Vertical Farming Market with meticulously compiled statistics on market share, size, and revenue growth rate by Polaris Market Research Industry Reports. This thorough analysis not only provides a glimpse into historical trends but also unfolds a roadmap with a market forecast extending to 2032. Immerse yourself in the comprehensive nature of this industry analysis through a complimentary PDF download of the sample report.
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FAQ's
The vertical farming market report covering key segments are growth mechanism, structure, components, crops, and region.
Vertical Farming Market Size Worth $30,911.23 Million By 2032.
The global vertical farming market expected to grow at a CAGR of 18.43 % in the forecast period.
North America is leading the global market.
Key driving factors in vertical farming market are increase in popularity of organic foods and optimum use of vertical space and balanced energy utilization.
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