| Status : Published | Published On : Jan, 2024 | Report Code : VRSME9052 | Industry : Semiconductor & Electronics | Available Format :
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Page : 144 |
Global Vertical Farming Market – Analysis and Forecast (2025-2030)
Industry Insights by Offering (Hardware (Climate Control (Air Purification, Ventilation Fans, and Others) Lighting (Grow Light Reflectors, Grow Light Ballasts, Grow Lights), Sensors (PH Sensors, Nutrient Sensors, Crop Sensors, CO2 Sensors, Temperature Sensors, and Others), and Hydroponic Component (Meters and Solutions, Pumps and Irrigation, Water Filters, and Others), and Software) by Growth Mechanism (Aeroponics, Hydroponics, and Aquaponics), by Structure (Building-Based, and Shipping Container),by Crop Type (Broccoli, Pepper, Tomato, Spinach, Cucumber, Lettuce, and Others) and By Geography (North America, Europe, Asia-Pacific, Middle East, and the Rest of the World)
Industry Overview
The Global Vertical Farming Market is expected to reach USD 10.8 billion by 2030, expanding at a 20.4% CAGR over the forecast period from USD 3.4 billion in 2023.
Ideally, vertical farming refers to growing crops in a constrained space. This space is climate-controlled and this specific type of environment increases crop production. In simpler terms, vertical farming refers to the technique of producing food in stacks or vertical layers. It resembles a skyscraper, warehouse, or shipping container.
This type of farming is much different from traditional farming techniques. Mainly an indoor farming process, this technique can produce crops all year round. This results in higher productivity.
Moreover, this type of farming technique can reduce damage to crops since they are protected from extreme weather or climatic conditions. Everything is done in a controlled environment comprising artificial control of the environment, fertigation, and light.
Since vertical farming is the process of growing crops indoors, it is also known as indoor farming. In this process, instead of rain and sunlight, controlled growing, nutrition systems and LED lighting are used.
The growth of the global vertical farming market is attributed to the increasing consumer awareness of the benefits of consuming high-quality food. This has increased the consumer demand for food made without pesticides and herbicides.
Moreover, the shortage of agricultural land is also a significant factor in the growth of the global vertical farming market. This leads to the widespread adoption of independent farming methods especially for fruits and vegetables, which contributes to the expansion of the global vertical farming market.
Market Segmentation
Insight by Product Offering
The global vertical farming market is divided into hardware and software according to the product offering. The hardware segment is further divided into hydroponic systems, sensing devices, lighting, and climate control categories.
Out of the two categories, the hardware segment is expected to grow at a higher CAGR during the forecast period and hold a larger share.
The lighting devices segment will contribute to the highest market share during the forecast period and grow at a higher CAGR. This is mainly because vertical or indoor farming operations rely heavily on light-emitting diodes (LEDs) due to their higher efficiency and ability to create productive controlled environment agriculture (CEA) farms. These lights are also very cost-effective, facilitating its growing adoption and growth in the forecast period.
On the other hand, the sensing devices segment produces relevant data around the clock and helps in environment control. The soil moisture sensors, predictive software, and dashboards scan the farm to ensure high-quality remote sensing using smartphones and relevant applications. Moisture, pH, and temperature sensors offer unnumerable data points that help vertical farms determine the ideal growing conditions such as nutrient composition, temperature and light level, climate, plant morphology, light spectrum, and irrigation and maintain them to improve crop quality and grow yields by using the available resources most efficiently.
The climate control segment is also expected to grow at a significant rate during the forecast period due to useful features such as programmable logic controllers, automated building management systems, and manual control systems.
Insight by Growth Mechanism
Considering the growth mechanisms, the global vertical farming market is divided into aeroponics, aquaponics, and hydroponics segments. Among these segments, the hydroponics segment accounts for the largest share of the market. This is because it helps in growing a variety of crops all year round as well as flowering plants irrespective of the environmental conditions
However, the aquaponics-based vertical farming market is expected to grow at a higher CAGR during the forecast period. This is because there will be rapid urbanization and significant population growth.
Insight by Crop Type
The global vertical farming market is divided into broccoli, tomato, pepper, spinach, lettuce, cucumber, and others as per the crop types.
Out of these types, lettuce is grown extensively on vertical farms and during the analysis period, it is expected to grow at a significant rate. This is due to its higher adaptability to grow in small spaces in quick time and needs little care making it a more economically viable crop for vertical farming.
Tomato is also expected to dominate the global vertical farming market during the forecast period due to its popularity and widespread use. The berries segment is also expected to witness a significant growth rate in the analysis period due to its rise in demand as a superfood all over the world.
Insights by Structure
The global vertical farming market is typically divided into two segments based on the structure namely, building-based and shipping container segments.
Out of these two segments, during the forecast period, the shipping container structure is supposed to dominate the market. This is mainly attributed to its ability to help grow crops in practically any geographic location. It uses less water and the containers are modifiable, stackable, durable, and recyclable. These can be refurbished at a lower cost.
The availability of unused shipping containers is extensive across the globe and the rapid technological advancements and increasing penetration of precision farming are likely to influence this segment to grow at a higher rate over the forecast period. Other significant factors, such as the ability to transport these containers, smaller space requirements, and low cost allow new companies to enter and facilitate the growth of the market.
On the other hand, the building-based segment of the global vertical farming market is predominantly practiced in APAC countries such as Japan, China, and others. This specific segment is expected to contribute more to the market in terms of revenue. This is mainly due to the growing adoption of this type of vertical farming in these regions mainly due to lower cultivation costs and larger farming area requirements, and its ability to ensure food security better.
Global Vertical Farming Market Report Coverage
|
Report Metric |
Details |
|
Historical Period |
2018 - 2023 |
|
Base Year Considered |
2024 |
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Forecast Period |
2025 - 2030 |
|
Market Size in 2023 |
U.S.D. 3.4 Billion |
|
Revenue Forecast in 2030 |
U.S.D. 10.8 Billion |
|
Growth Rate |
20.4% |
|
Segments Covered in the Report |
By Offering, By Growth Mechanism, By Structure, By Crop Type. |
|
Report Scope |
Market Trends, Drivers, and Restraints; Revenue Estimation and Forecast; Segmentation Analysis; Impact of COVID-19; Companies’ Strategic Developments; Market Share Analysis of Key Players; Company Profiling |
|
Regions Covered in the Report |
North America, Europe, Asia-Pacific, Middle East, and the Rest of the World |
Industry Dynamics
Industry Trends
The major players in the global vertical farming market are now focusing more on innovative techniques of creating controlled environments for farming in buildings. These artificially created environments simulate nature as much as possible and support natural circumstances.
The market is also witnessing a substantial degree of innovation. It is adopting innovative technologies such as cameras and sensors in order to improve efficiency, resource allocation, and yields, and alleviate challenges such as environmental constraints and limited space.
Vertical farms are also becoming more technologically advanced with the use of LED lights. There is also an increased use of automated control systems that help customize the growing conditions, requirements, and environment.
Also, major layers are entering into joint ventures and collaboration with others in the market to ensure better utilization of resources and produce more crops.
There are also several product launches made recently that are more technically advanced to ensure higher yield, better quality, and cost-effectiveness. This increases profitability.
The growing trend of nano-farming is also influencing the market and the industry. The most significant benefit of these small-scale farms apart from the basic advantages of stacked farming is that they need a much lower surface area for farming and therefore help in controlling the level of fertilizers and moisture in a much better manner.
Moreover, the industry is expected to benefit from the development of the nutraceutical, cosmetic, and medicinal industries. It will also benefit from the escalating production of biopharmaceutical products.
Growth Drivers
The most significant growth driver of the global vertical farming market is the growing demand of consumers for herbicide and pesticide-free food. In addition, the rise in awareness of the benefits of having pure food among people is also driving the growth of the market.
A limited amount of agricultural land space is also driving the growth of the global vertical farming market.
The rapid technological development in the lighting industry has also contributed to the growth of the global vertical farming market. Specific artificial lighting, such as grow lights can increase the yield of fruits and vegetables significantly.
In addition, rapid urbanization and increased creation of smart cities have also facilitated the production of fruits and vegetables in controlled environments of vertical farms.
The rising population of the world has strained the agriculture sector which is felt greatly in developing countries. As a result, there is a higher demand for food security in these countries, which has resulted in the growth of agriculture on vertical farming thereby facilitating the growth of the global vertical farming market.
Development in other industries such as cosmetic, nutraceutical, and medicinal is also contributing to the growing production of biopharmaceutical products, which helps in corp yield and reduces damages. Technological advancement is also helping in the growth of the global vertical farming market allowing newer entrants to it.
Challenges
The initial cost of the setup of vertical farms is very high. Moreover, these farms usually cannot produce crops on a large scale. These are the two most significant issues faced by the participants. Furthermore, this type of farming is useful for growing only a limited type of crops. All these factors limit the growth of the global vertical farming market.
Opportunities
The alignment of vertical farming with the trend of urban agriculture has helped address the challenge of the lack of arable land in urban areas. This practice allows growing crops within the proximity of densely populated cities. This ability creates new opportunities for the global vertical farming market to grow within the forecast period.
Though governments follow regulatory scrutiny on the vertical farming market worldwide to ensure it achieves sustainable agriculture goals, a lot of financial grants and incentives are also offered to promote the adoption of this specific agriculture technology. These incentives usually come in the form of subsidies, tax breaks, or grants aimed at reducing the initial capital investment for vertical farming facilities, thereby creating higher growth opportunities.
Geographic Overview
North America is the largest contributor to the global vertical farming market and is expected to grow significantly during the forecast period. This is attributed to the rapid technical developments in the region along with higher investment in research and development of better and more efficient techniques. Additionally, the rising demand for food among people with little to no herbicide and pesticide use, the growing knowledge of the farmer, and a significant rise in the number of independent farmers growing crops in small spaces are contributing to the growth of the vertical farming market in this region.
Similarly, the vertical farming market has grown significantly in Europe. This is ideally the second largest contributor to the global vertical farming market among all regions. This is mainly due to the lack of agricultural space and high investment in vertical farming process.
On the other hand, the vertical farming market in the APAC region is also expected to grow at a high CAGR during the forecast period. This is because this region usually has a high population base. Also, there is a rapid urbanization drive in this region and a notable expansion in smart city development. All these factors drive the growth of the global vertical farming market.
With respect to developing countries like India and China, rapid, urbanization and growing population have strained the agriculture sector significantly, failing to meet the rising demand for food by the people. In order to improve the situation, there is a rise in vertical farming in these countries to ensure food security. Farming in buildings are well-accepted in these regions and is expected to grow at a high CAGR during the corecast period.
Competitive Insight
Market participants in the vertical farming sector are concentrating on innovations for creating controlled environments in buildings to support circumstances as similar to nature as possible. Some of the major companies providing solutions in the vertical farming sector include AeroFarms, Sky Greens, Urban Crop Solutions, Vertical Farm Systems, Agrilution GmbH, Green Sense Farms LLC, Koninklijke Philips N.V., Illumitex Inc., Everlight Electronics Co. Ltd., and American Hydroponics.
Recent Development by Key Players
Singapore-Based AlfaTech collaborated with Urban Crop Solutions in South East Asia. AlfaTech shall be the integration and service partner for the products of Urban Crop Solutions in the South East Asian region for indoor vertical farming projects.
PRIMARY RESEARCH INTERVIEWS - BREAKDOWN
Source: VynZ Research
The Vertical Farming Market report offers a comprehensive market segmentation analysis along with an estimation for the forecast period 2025–2030.
Segments Covered in the Report
- By Offering
- Hardware
- Climate Control
- Air Purification
- Ventilation Fans
- Others
- Lighting
- Grow Light Reflectors
- Grow Light Ballasts
- Grow Lights
- Sensors
- PH Sensors
- Nutrient Sensors
- Crop Sensors
- CO2 Sensors
- Temperature Sensors
- Others
- Hydroponic Component
- Meters and Solutions
- Pumps and Irrigation
- Water Filters
- Others
- Climate Control
- Software
- Hardware
- By Growth Mechanism
- Aeroponics
- Hydroponics
- Aquaponics
- By Structure
- Building-Based
- Shipping Container
- By Crop Type
- Broccoli
- Pepper
- Tomato
- Spinach
- Cucumber
- Lettuce
- Others
Region Covered in the Report
- North America
- U.S.
- Canada
- Rest of North America
- Europe
- U.K.
- France
- Netherlands
- Sweden
- Rest of Europe
- Asia-Pacific
- China
- Japan
- Singapore
- Taiwan
- Rest of Asia-Pacific
- Latin America
- Brazil
- Rest of Latin America
- Middle East & Africa
- South Africa
- Rest of Middle East & Africa
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Vertical Farming Market