Vertical Farming Market Projected to Touch USD 35.3 Billion by 2032, Driven by Rising Global Food Demand | Market.us Report

New York, April 04, 2023 (GLOBE NEWSWIRE) — According to Market.us, The global Vertical farming market size will exceed USD 35.3 billion by 2032, up from USD 5.6 billion in 2022, and it is expected to achieve a compound annual growth rate (CAGR) of 20.8% from 2023 to 2032. Crops are cultivated using the agricultural practice known as “vertical farming,” which involves stacking them vertically. It is carried out in a controlled environment utilizing soilless growing methods such as aquaponics, hydroponics, and aeroponics. With a growing population and limited available farmland, vertical farming may be employed to meet the increasing global food demand.

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Key Takeaway:

• By Structure, the shipping container-based vertical farm segment generated the largest revenue share of 53% in 2022.
• By Growth Mechanism, the hydroponics segment has dominated the market, accounting for the largest global revenue of 38% in 2022.
• By Component, the lighting system segment generated the largest revenue share of 32% in 2022.
• By Crop Category, in 2022, the fruit, vegetable & herbs segment dominated the market and accounted for the largest global revenue in 2022.
• In 2022, North America dominated the market with the highest revenue share of 35%.
• Europe region is expected to grow at a significant CAGR from 2023-2032.

Vertical farming is a highly efficient and sustainable way of producing food. In vertical farming, an artificial environment is created using technologies that help plants grow with high nutrition in a short period compared to traditional farming.

Factors affecting the growth of the vertical farming market

Several factors can affect the growth of the vertical farming market. Some of these factors include:

• Low transportation costs: Vertical farming market companies build their plants near the region with high consumer demand, saving transportation costs.
• Increasing consumer demand for organic foods: Consumers worldwide are more aware of their health and prefer fresh, organic, and nutrition-rich foods. Crops in vertical farming minimize harmful pesticides and fertilizers.
• Technological advancements: Vertical farming market companies are adopting robots for monitoring the growth of crops using sensors. Also, the introduction of Artificial Intelligence in vertical farming helps control water irrigation and operate climate control systems using remotes or smartphones.
• COVID-19: Vertical farming market was negatively hampered by COVID-19 lockdown restrictions due to a disruption in labor supply, which led to a shortage of crops in the market.

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Top Trends in Global Vertical Farming Market

Big companies in the vertical farming market are steadily moving toward consolidation through joint ventures, collaborative partnerships, mergers & acquisitions, and implementing robotics & artificial intelligence in vertical farming. Moreover, AI technologies in vertical farming help to manage light, temperature, and water supply, and reduce labor costs. With continuous changes in climatic conditions and less groundwater availability, farmers are more inclined towards vertical farming. Such trends are witnessed in the vertical farming market, boosting the demand for vertical farming.

Market Growth

Individuals worldwide are more aware of food’s health and nutritional values, so consumers are more inclined towards organic foods and healthy vegetables and fruits. Vertical farming minimizes the use of hazardous chemicals and fertilizers compared to traditional farming methods, which is a key factor for vertical farming market growth. Vertical farming uses climate control systems, and irrigation systems, which help maintain greenhouse temperature and climatic conditions, which helps in better crop yield. It is also carried out near places where consumer demand is high. Thus, this method also minimizes transportation costs, which is a significant factor in the growth of the vertical farming market.

Regional Analysis

The vertical farming market was dominated by North America, which acquired the most significant revenue share of 35% in 2022. Demand for fresh, organic, and quality food are increasing in both developed and developing countries, thus, responsible for market growth. Usage of cannabis in North American states is high, this cannabis is grown in vertical farming and is expected to fuel the market during the forecast period. In North America, there are large numbers of vertical farms across the U.S. also, the advancements in R&D facilities and the technological adoption rate is greater. As such, the market for vertical farming is anticipated to grow. Europe region is anticipated to grow at the fastest CAGR during the forecast period owing to increasing investments in agricultural start-ups.

Competitive Landscape

Prominent players in the vertical farming market are developing expansion strategies through investments, mergers, and acquisitions. Some of the major key players in vertical farming markets are AeroFarms, Sky Greens, American Hydroponics, Agrilution Systems GmbH, Brightfarms Inc., Everlight Electronics Co. Ltd., Freight Farms, GrowUp Urban Farms Ltd., Green Sense Farms, LLC, Heliospectra, Altius Farms, Inc., Crop One Holdings, Inc., Future Farms, and Other Key Players.

Recent Development of the Vertical Farming Market

• In August 2021, AeroFarms partnered with Nokia Bell Labs to combine their knowledge and expand their business to identify plant interactions at an advanced level.
• In 2021, Everlight Electronics Co. Ltd. Launched a new horticultural LED in spectrum tailored to augment the red pigment of strawberries.

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Scope of the Report

Market Drivers

Conventional farming requires too much water and land for crop yield, while vertical farming saves about 90% water and is cost-effective. Also, vertical farming produces crops throughout the year because it does not depend on external climatic conditions. The main benefit of vertical farming is a short time for growing, low water usage, and no loss in yield, which is responsible for market growth. Vertical farming is indoor farming which is more environmentally friendly and has no impact on soil fertility. Also, the increasing depletion of groundwater and continuously changing climatic conditions drive the demand for vertical farming.

Market Restraints

The initial setting of vertical farming requires advanced systems such as sensors, drip irrigation, climate control systems, and more expensive lighting systems, hampering the market growth. Vertical farming requires high initial investments, which is expected to restrain the market’s growth. Set up for vertical farming requires higher maintenance costs than traditional farming, negatively impacting market growth.

Market Opportunities

Worldwide demand for healthy and high-quality food is increasing, propelling market growth. Increasing urbanization, changing lifestyles, and independent agriculture techniques are some major factors that are anticipated to create new opportunities in the global vertical farming market. Technological advancements in vertical farming markets, such as sensors, climate control systems, and advanced irrigation systems, are anticipated to offer lucrative growth opportunities in the global vertical farming market.

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Report Segmentation of the Vertical Farming Market

Structure Insight

Based on Structure, the shipping container-based vertical farm segment dominates the market with the largest market share. It is expected to continue its dominance during the forecast period. Growth of the segment is propelled by Structure’s ability to help crops grow irrespective of geographic location. Shipping container-based vertical farms have been adopted widely due to developments in indoor farms. The main advantage of container-based vertical farming is that shipping containers are easy to move and do not require a large ground plot for growing. Shipping container-based vertical farming saves about 90% of water compared to traditional farming methods. Increasing penetration of precision farming is driving the growth of this segment.

Growth Mechanism insight

Based on the growth mechanism, the hydroponics segment was dominant, with the largest market revenue share in 2022. The segment growth is attributed to higher yield, ease of operation, and low installation costs. Hydroponics technique saves about 95% of water compared to traditional methods and increases crop production, which is the key factor for segment growth.

Component Insight

Based on Components, the lighting segment dominated the market with the largest market share in 2022. Lighting systems use artificial lights that provide sufficient light for plants’ healthy and fast growth. Demand for lighting systems is increasing due to reducing operational costs. Lighting systems provide consistent heat to plants and save plants from excess heat.

Crop category Insight

Based on the crop category, the fruit, vegetables & herbs segment was dominant in the market with the largest market revenue share in 2022 and is anticipated to remain dominant during the forecast period. Fruit vegetables & herbs such as cucumbers, bell, tomatoes, and strawberries are susceptible to excess heat. Vertical farming uses climate control systems for farming, which is helpful in farming fruit, vegetables & herbs.

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Market Segmentation

Based on Structure

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

Based on the Growth Mechanism

• Hydroponics
• Aeroponics
• Aquaponics

By Component

• Irrigation & Fertigation system
• Lighting System
• Sensors
• Climate Control
• Building Material
• Others

By Crop Category

• Fruits Vegetables & Herbs
• Flowers & Ornamentals
• Others

By Geography

• North America
• Western Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Portugal
  • Ireland
  • Austria
  • Switzerland
  • Benelux
  • Nordic
  • Rest of Western Europe
• Eastern Europe
  • Russia
  • Poland
  • The Czech Republic
  • Greece
  • Rest of Eastern Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia & New Zealand
  • Indonesia
  • Malaysia
  • Philippines
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Colombia
  • Chile
  • Argentina
  • Costa Rica
  • Rest of Latin America
• Middle East & Africa
  • Algeria
  • Egypt
  • Israel
  • Kuwait
  • Nigeria
  • Saudi Arabia
  • South Africa
  • Turkey
  • United Arab Emirates
  • Rest of MEA

Key Market Players

• AeroFarms
• Sky Greens
• American Hydroponics
• Agrilution Systems GmbH
• Brightfarms Inc.
• Everlight Electronics Co. Ltd.
• Freight Farms
• GrowUp Urban Farms Ltd.
• Green Sense Farms, LLC
• Heliospectra
• Altius Farms, Inc.
• Crop One Holdings, Inc.
• Future Farms
• Other Key Players

Related Reports:

• Indoor farming lighting market was valued at USD 4.23 billion in 2021 and is projected to expand at a compound annual growth rate (CAGR) of 15.0%
• HVAC in vertical farming market  is projected to grow from USD 1.9 Billion in 2022.
• Indoor farming market size is expected to be worth around USD 151.36 Billion by 2032 from USD 40.12 Billion in 2022, growing at a CAGR of 14.2 % during the forecast period 2022 to 2032.
• Precision farming market is estimated to reach USD 7,100 million by 2022. This market size will increase at a CAGR of 13.2% from 2022 to 2032.
• Artificial Intelligence (AI) in Agriculture Market is expected to grow at a CAGR of 24.5% over 10 years and will reach USD10.2 Bn in 2032.
• Seed treatment Market was valued at USD 6.1 billion in 2021 and is projected to reach USD 13.54 billion growing at a compound annual growth rate (CAGR) of 8.3%, between 2023 and 2032.

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