Vertical Farming Market Size and Share Analysis by Component (Hardware, Software, Services), Structure (Building-Based Vertical Farms, Shipping Container-Based Vertical Farm), Growth mechanism (Hydroponics, Aeroponics, Aquaponics), Crop Type (Tomato, Lettuce, Bell & Chili Peppers, Strawberry, Cucumber, Leafy Greens (excluding lettuce), Herbs) - Global Industry Growth Forecast to 2030

Market Overview

The global vertical farming market size stood at $3.98 billion in 2021, and it is expected to advance at a compound annual growth rate of 25.2% during 2021–2030, to reach $30.2 billion by 2030. This is because of the benefits imparted by vertical farming, such as less water, power, and land requirements, and enables growers to reduce the washing and processing time of produced crops.

Moreover, the shortage of agricultural land and the increasing demand for organic food are other prime growth factors for the market. Also, advanced agriculture techniques help growers produce around 230 times more crop yields than traditional farming. In addition, the rising shortage of groundwater and changing climatic conditions have provoked traditional growers to adopt alternate farming techniques.

The cannabis industry is primarily adopting enhanced indoor agriculture to increase productivity. Furthermore, the unpredicted rising of the global and urban populations and the growing focus on environment-friendly production of fresh fruits and vegetables will also boost the usage of indoor agriculture.

In addition, the demand and production of tomatoes have increased in the last few years, along with lettuce. Also, the need for spinach is slightly increasing with the rising demand for green salads across the globe. Vertical farming companies are producing different types of breeds of these crops to increase their production and fulfill the demand for these vegetables.

Hydroponics Category Held the Largest Market Share

The hydroponics category accounted for the largest revenue share, of more than 45%, in 2021, and it is expected to remain the largest during the forecast period as well. This is because of its low implementation cost and ease of operation. Plants commonly grown hydroponically produce greater yields as compared to soil-growing plants. This method helps in reducing the risk of soil-causing diseases. In this method, the soil is replaced by a mineral solution, which is placed around the plant’s roots.

Aquaponics Accounts for Considerable Market Share

The aquaponics category is expected to gain a significant market share in the coming years. Aquaponics is the combination of hydroponics and fish farming or aquaculture, to create an efficient closed-loop system, which helps in the agriculture of different types of crops without using harmful chemicals or pesticides. The plants grown through the aquaponics system are lettuce, chive, pepper, and cucumber. The aquaponics system contains fish effluent that converts the nitrifying bacteria into nutrients, which increases the production time; and aquaponics fish waste that is used as a plant fertilizer.

Lighting Dominates the Market

The lighting category leads the market, owing to the rising demands of consumers for organic food. The lighting components include pink lights, LED lights, grow lights, grow light reflectors, grow light ballasts, and other types of artificial cultivation lights, which help in vertical agriculture.

Shipping Container Becomes More Popular

The shipping container category dominated the market, with a revenue share of more than 50%, in 2021, and it is expected to witness the same trend during the forecast period as well. The main benefits of container farming include it is easy to transport and does not require much area of land because the whole process of crop production is carried out in a container. This type of cultivation provides nearly eight times more growing area than single-level agricultural land, thereby ensuring food security for a city for a longer period.

Moreover, the law of diminishing marginal utility is applied here and the price of containers is decreasing due to the increasing competition in the field of container cultivation and used containers are easily available in the domain at a reasonable cost.

APAC Is Rapidly Adopting Vertical Farming

The APAC vertical farming market dominated the market, with a revenue share of more than 32%, in 2021. Within the region, the Indian industry is expected to rise rapidly in the next few years. Vertical agriculture is increasingly adopted in the region due to the shortage of fertile agricultural land and increasing population, which enables opportunities for urban cultivation. Also, global vertical cultivation companies are improving their business and operations in APAC.

China and India are the most populated countries in the world, due to which the availability of cultivation land is decreasing in these countries at a rapid pace with rising urbanization and population. Also, the increasing disposable and per capita incomes across APAC and the local or national demand for food that is not fulfilled by traditional farming are boosting the demand for indoor cultivation.

North America is the largest market for vertical farming, and it is expected to hold the same position in the coming years. This is ascribed to the presence of key industry players, the large urban population, the increased demand for organic products, the rise in the adoption of federal agricultural policies, the increase in levels of food consumption, and the surge in the deployment of automation technologies in the agriculture sector. Moreover, many pharmaceutical companies are developing their own patented products from raw seed to finished products, and further provide proprietary products to the medicinal, nutraceutical, and cosmetic industries, which helps them in expanding their customer base.

The European market is expected to grow at a significant CAGR during the forecast period. Companies using nanotechnology and robotics for agriculture leading to a rapid increase in the need for indoor cultivation in the region. Nanotechnology is used for food packaging, storage, and increasing product life. Moreover, the surging demand for organic food is leading to the continuous expansion of urban farming in European nations.

Increasing Adoption of Vertical Farming over Traditional Farming

Indoor farming is changing the way of crop farming or traditional farming. Urban agriculture enables growers to produce organic food, which is grown without the use of harmful chemicals and pesticides. Indoor cultivation uses pink lights, LED lights, sensors, and climate control systems, which automatically adjust the temperature and humidity of the room. It is found that indoor cultivation produces crops rapidly and uses less water and less power than traditional farming with zero chemicals.

Growing Population Is Boosting the Cultivation Techniques Demand

The growing global population is boosting the demand for food. Nowadays, consumers are more aware of organic food, as it is more nutritional than non-organic food, and vertical farming is concise and effective in producing natural organic micro-greens. The system also aids in a considerable collection of organic crops and confirms that crops are available in demand-specific areas.

Moreover, changing climate conditions are driving the focus of farmers toward artificial agriculture. Also, governments around the world are endorsing the cultivation of organic food with the use of organic pesticides. These factors are projected to enhance the need for modern agriculture and will accordingly drive the indoor agriculture industry.

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IoT Sensors Becoming the Most Useful Technology in Vertical Farming

The increasing use of IoT sensors in producing crops and the surging production of biopharmaceutical products open a plethora of opportunities for players in the indoor cultivation industry. IoT enables growers in storing information detected by sensors in cloud storage or any other storage systems.

Furthermore, pharmaceutical businesses are implementing indoor agriculture techniques for the production of different crops that are extensively used in making biopharmaceutical products. In addition, for pharmaceutical companies, product quality is also a major reason for adopting indoor agriculture techniques.

Growing Urban Population

With the rising urban population, the migration from rural to urban is also increasing. The rapidly increasing city population has made farmland inadequate for cultivation, so there is a high need for alternate farming techniques, which drives the demand for vertical farming across the world. Moreover, the increasing government emphasis on ‘smart cities’ is also causing an exodus of people from rural to urban areas.

Top Players in the Vertical Farming Market Are:

• Signify
• Osram
• Freight Farms
• AeroFarms
• Sky Greens Pte. Ltd.
• Spread
• Plenty
• Valoya
• Everlight Electronics
• Heliospectra AB

Market Size Breakdown by Segment

The study offers a comprehensive market segmentation analysis along with market estimation for the period 2017-2030.

Based on Component

• Hardware
• Software
• Services

Based on Structure

• Building-Based Vertical Farms
• Shipping Container-Based Vertical Farm

Based on Growth mechanism   

• Hydroponics
• Aeroponics
• Aquaponics

Based on Crop Type

• Tomato
• Lettuce
• Bell & Chili Peppers
• Strawberry
• Cucumber
• Leafy Greens (excluding lettuce)
• Herbs

Geographical Analysis

• North America
  • U.S
  • Canada
• Europe
  • U.K.
  • Netherland
  • Sweden
  • France
• Asia-Pacific
  • Japan
  • China
  • Singapore
  • Taiwan
• Latin America
  • Brazil
• Middle East and Africa
  • South Africa