Vertical Farming Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2032)

Vertical Farming Market Trends and Growth Drivers

Adoption of IoT Sensors Is Key Trend

• 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 Population Is Boosting the Cultivation Techniques Demand

• The growing global population is boosting the demand for food.
• As per the 2024 World Population Prospects report of the United Nations, the earth will be home to 10.3 billion people in the 2080s, compared to 8.2 billion in 2024.
• 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.
• With the rising urban population, the migration from rural to urban is also increasing.
• As per the UN, the share of people living in cities is expected to rise to 68% of the global population by 2050 from 55% in 2018.
• 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.

High Initial Investments Can Hamper Market Growth

• The high price associated with farmscraper is adversely impacting the growth of global vertical farming market.
• Most of the hardware that supports vertical farming are costly, due to their advanced features such as enabled lights and controlling ambient temperatures.
• The cost of organic pesticides is also increasing, which is driving the total cost of investment in vertical farming.
• The high cost of vertical farming hardware and growth mechanism makes it difficult for the small and mid-sized enterprises to implement them, which is hindering the growth of the global market.
• Rising water cost along with increasing electricity price is also hindering the growth of vertical farming market across the globe.
• As per studies, it can cost between INR 5 lakh to INR 50 lakh to implement a vertical farming system in India, depending upon the farm size and exact application.
• Moreover, per-month operating expenses can be as high as USD 32,600 in the U.S.
• The cost of cultivation bed space in a vertical farm as be up to USD 2,600 per square meter.

Vertical Farming Market Analysis

Growth Mechanism Insights

The hydroponics category accounted for the largest revenue share, of 55%, in 2024, 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.

The aquaponics category is expected to witness the highest CAGR 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.

We have analyzed these growth mechanisms:

• Hydroponics (Largest Category)
• Aeroponics
• Aquaponics (Fastest-Growing Category)

Component Analysis

The hardware category holds the larger share, and it will also have the higher CAGR, of 45%, in the forecast period. This is because s an array of sensors, pumps, pipes, lights, sprinklers, containers, shelves, and ventilation systems are required for such indoor farms. Hardware accounts for the majority of the initial investment and operational expenses of running a vertical farm. Moreover, the associated software is already installed on the hardware and requires only periodic updates.

Within hardware, 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.

These components have been studied in the report:

• Hardware (Largest and Fastest-Growing Category)
• Software
• Services

Structure Analysis

The shipping container category dominated the market with a revenue share of 60% in 2024, and it is expected to witness the higher CAGR during the forecast period. 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.

These structures have been covered:

• Building
• Shipping Container (Larger and Faster-Growing Category)

Vertical Farming Market Geographical Outlook

North America is the largest market for vertical farming, having generated 40% of the global revenue in 2024. 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.

The APAC vertical farming market has the highest CAGR, of 22%. 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.

The report offers analysis on the below-mentioned regions and countries:

• North America (Largest Regional Market)
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe
  • U.K.
  • Netherlands (Fastest-Growing Country Market)
  • Germany (Largest Country Market)
  • Sweden
  • France
  • Rest of Europe
• Asia-Pacific (APAC) (Fastest-Growing Regional Market)
  • Japan
  • China (Largest Country Market)
  • India (Fastest-Growing Country Market)
  • Singapore
  • Taiwan
  • Rest of APAC
• Latin America (Rest of LATAM)
  • Brazil (Largest and Fastest-Growing Country Market)
  • Mexico
  • Rest of LATAM
• Middle East and Africa (MEA)
  • South Africa
  • Saudi Arabia (Largest and Fastest-Growing Country Market)
  • U.A.E.
  • Rest of MEA

Vertical Farming Market Share

• The market is fragmented as a wide range of products are required to set up and run a vertical farm.
• This opens opportunities for a large number of companies that develop irrigation systems, ventilation fans, sensors, climate control systems, and grow lights.
• Further, the advent of automated systems integrated with IoT and AI allows many new startups to flourish in the market.
• Additionally, small- and mid-scale farmers with budget constraints generally buy from local or regional companies, while the major players are majorly approached by large F&B entities that have their own vertical farms.
• Further, the systems and components used in vertical farms are not subject to any particular regulations, which enables small, local firms to compete.

Vertical Farming Market News

• In December 2024, Heliospectra AB introduced Dynamic MITRA X LEDs in three- and four-channel configurations for indoor farming. The lights also feature the Spectrum Design Tool, HelioCORE software, and Dynamic Zoning.
• In May 2024, ams-OSRAM AG launched the OSCONIQ P 3737 high-power horticulture LED lights. Their advanced semiconductor chips enable over 83% energy conversion to Hyper Red spectrum for plant growth.
• In October 2023, Agrinam Acquisition Corporation announced an agreement to acquire Freight Farms Inc.