Search Market Research Report
Vertical Farming Market Size, Share Global Analysis Report, 2024 – 2032
Vertical Farming Market Size, Share, Growth Analysis Report By Components (Sensors, Climate Control, Irrigation Systems, And Lighting Systems), By Structures (Shipping Containers, Vertical Farms, And Building-Based Vertical Farms), By Types (Aquaponics, Aeroponics, And Hydroponics), By Crop Categories (Flowers & Ornaments, Fruit, Vegetables & Herbs, And Others), And By Region - Global Industry Insights, Overview, Comprehensive Analysis, Trends, Statistical Research, Market Intelligence, Historical Data and Forecast 2024 – 2032
Industry Insights
[221+ Pages Report] According to Facts & Factors, the global vertical farming market size was valued at USD 8.82 billion in 2023 and is predicted to surpass USD 26.85 billion by the end of 2032. The vertical farming industry is expected to grow by a CAGR of 15.20% between 2024 and 2032.
Market Overview
Vertical farming is an agricultural practice that grows crops in vertically stacked layers in controlled indoor environments. Vertical farming helps in space optimization by offering more crop produce in less per square foot area, thereby making it the best option for densely populated spaces.
Moreover, it also helps conserve water through different techniques like hydroponics and aeroponics, thereby replacing traditional agricultural practices and saving more than 90% of the water. Additionally, it offers year-round production, thereby helping produce the crops demanded across all seasons. Vertical farming is emerging as a crucial part of agriculture, particularly in areas with water scarcity, limited space, long food supply chains, and many other challenges.
Key Insights
- As per the analysis shared by our research analyst, the global vertical farming market size is estimated to grow annually at a CAGR of around 15.20% over the forecast period (2024-2032).
- In terms of revenue, the global vertical farming market size was valued at around USD 8.82 billion in 2023 and is projected to reach USD 26.85 billion by 2032.
- Rising global food demand is driving the growth of the global vertical farming market.
- Based on the components, the lighting system segment is growing at a high rate and is projected to dominate the global market.
- Based on structures, the building-based vertical farms segment is anticipated to grow with the highest CAGR in the global market.
- Based on the types, the hydroponics segment is projected to swipe the largest market share.
- Based on crop categories, the fruit, vegetable, and herb segment is expected to dominate the global market.
- Based on region, North America is expected to dominate the global market during the forecast period.
Growth Drivers
- Rising global food demand is driving the growth of the global market.
Vertical farming helps end users produce higher yields in smaller spaces, thereby helping cater to the growing demand for food globally. The growing urban population is making it a crucial practice in agriculture. Vertical farming can produce crops in urban centers in less space, which is important for highly populated regions like Europe and Asia.
However, the growing demand for sustainable farming is expected to revolutionize the global vertical farming market. Vertical farming aligns well with sustainability goals as it requires fewer pesticides, herbicides, and other resources.
Climate change is a rising concern affecting traditional agriculture with unpredictable weather patterns. Heat waves, floods, droughts, and many other unexpected natural calamities can affect crop production, which is further enhancing the demand for vertical farming in the market. For instance, Amazon Fresh extended its partnership with Aero Farms in 2023. AeroFarms is a leading provider of hydroponics green to Amazon Fresh.
Restraints
- Initial investment cost is expected to hinder the growth of the global market.
Establishing vertical farms requires high upfront investments, which are expected to hinder the growth of the vertical farming industry. Moreover, high operational costs associated with maintenance, power management, water supply, and many others are further expected to slow down the growth of the industry.
Opportunities
- Technological advancements are expected to foster growth opportunities in the global market.
The ongoing innovations in the market, like LED lighting, aeroponics, hydroponics, and automation, are expected to revolutionize the global vertical farming market. These technologies help eliminate the wastage of resources by optimizing and making them more cost-effective. The introduction of smart sensors, AI systems, and data analytics helps farmers have full control over environmental factors, thereby facilitating the production of high-quality crops.
Also, the growing government support for vertical farming is further expected to fuel the growth of the industry. Governments across many regions are offering financial incentives, rebates, and subsidies to increase the adoption rate of vertical farming. For instance, Realty Income Corp partnered with Plenty Unlimited Inc. in 2023 to fully lease the latter company with an investment of 1 billion US dollars.
Challenges
- Technological complexity is a big challenge in the global market.
Vertical farming involves advanced technologies and tools which can only be operated by skilled or expert professionals. Therefore, it is a big challenge in the vertical farming industry. However, it also creates a barrier for traditional farmers who do not have ample resources or knowledge to work with these technologies.
Segmentation Analysis
The global vertical farming market can be segmented into components, structures, types, crop categories, and regions.
On the basis of components, the market can be segmented into sensors, climate control, irrigation systems, and lighting systems. The lighting system segment accounts for the largest share of the vertical farming industry during the forecast period.
Artificial lighting systems help in the process of photosynthesis by offering light to help crops grow in an environment where natural light is insufficient. Modern lighting systems are cost and energy-efficient, thereby offering full control to end users over their light intensity and spectrum to enhance the crop yield.
However, technological advancements are further expected to fuel the growth of the segment. Companies are coming up with smart lighting systems that can offer the required amount of light intensity to plants at different growth stages.
On the basis of structures, the market can be segmented into shipping containers, vertical farms, and building-based vertical farms. The building-based vertical farms segment is likely to dominate the global vertical farming market during the forecast period.
The increasing urban population is strengthening the demand for fresh produce in the market. Therefore, building-based vertical farms are gaining popularity as they have low transportation costs and carbon emissions because they are situated in nearby places in urban areas.
Also, building-based vertical farms can easily optimize the space by designing the structures accordingly. These can also be set up in unused urban spaces or rooftops, which further makes it a good option for space-constrained environments. Moreover, the integration of these farms with smart technologies like automation, climate control systems, or IoT is further expected to fuel the growth of the segment.
On the basis of types, the market can be segmented into aquaponics, aeroponics, and hydroponics. Hydroponics is the fastest-growing segment in the vertical farming industry. Hydroponic systems utilize less water than traditional practices.
Also, they have the ability to recycle water, which makes them ideal for regions with water scarcity. Hydroponic plants can easily cultivate crops in smaller spaces by producing them in stack layers, which further helps in farming in less area.
Hydroponic systems make less use of herbicides and pesticides because the exposure of crops to the external environment is limited. This makes the crops safer, cleaner, and organic produce. Innovations of smart sensors, automated nutrient delivery, and many other hydroponic systems are further making it easier to manage the crop production process.
On the basis of crop categories, the market can be segmented into flowers & ornaments, fruit, vegetables & herbs, and others. The fruit, vegetable, and herb segment is anticipated to witness significant developments in the global vertical farming market in the coming years. There is a growing demand for organic, fresh, and locally grown produce in the market, which is a major reason for the high growth rate of the segment.
Vertical farms also offer year-round production of fruits, vegetables, and herbs, which further attracts customers. It is of high advantage for crops like leafy greens, herbs, and many others, which are in continuous demand and need specific weather conditions for their growth. A variety of vegetable herbs are ideal for vertical farming because of their short harvest cycles and growth patterns. Moreover, the ongoing health and wellness trend is further strengthening the demand for fresh nutrient produce.
Report Scope
Report Attribute |
Details |
Market Size in 2023 |
USD 8.82 Billion |
Projected Market Size in 2032 |
USD 26.85 Billion |
CAGR Growth Rate |
15.20% CAGR |
Base Year |
2023 |
Forecast Years |
2024-2032 |
Key Market Players |
Vertical Farm Systems, Green Sense Farms LLC, GrowUp Urban Farms Ltd., Freight Farms, Everlight Electronics Co. Ltd., Brightfarms Inc., Agrilution GmbH, American Hydroponics (US), Illumitex Inc., AeroFarms, and Others. |
Key Segment |
By Components, By Structures, By Types, By Crop Categories, and By Region |
Major Regions Covered |
North America, Europe, Asia Pacific, Latin America, and the Middle East &, Africa |
Purchase Options |
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Regional Analysis
- North America to dominate the global market.
North America is likely to account for the largest share of the vertical farming industry during the forecast period. The growing population across the region, particularly in cities like Los Angeles, Chicago, and New York, is boosting the demand for efficient agricultural practices like vertical farming. However, many urban centers in North America are adopting building-based vertical farms to cater to the growing demand for fresh produce food.
Moreover, the rising trend of eating organic, fresh, and locally sourced products is further strengthening the regional market's growth. Vertical farms are known to produce fresh crops all year around at low transportation costs, which is further expected to support the industry's growth.
Also, the regional government is extending its support by increasing investments in agricultural technology companies and major retail chains to encourage vertical farming practices in North America, which will also positively influence the growth of the regional market.
Asia Pacific is another major region in the vertical farming industry that is likely to see significant growth in the coming years. Japan is leading the market in APAC because of its well-established infrastructure and vertical farming network. The region is investing heavily in establishing plant factories that use advanced systems like hydroponics to grow crops. Singapore is another leading country in the market because of the limited land availability.
Governments are coming up with many effective programs to encourage vertical farming in the region to improve local food production in the coming years. China, Australia, South Korea, and many other Southeast Asian countries are also showing interest in sustainable agricultural practices like vertical farming, which is further expected to fuel the growth of the regional market in the coming years. For instance, OSRAM came up with OSLON in 2022. It is an optimal series of LEDs that includes one mm2 chip for horticulture lighting.
Competitive Analysis
The key players in the global vertical farming market include:
- Vertical Farm Systems
- Green Sense Farms LLC
- GrowUp Urban Farms Ltd.
- Freight Farms
- Everlight Electronics Co. Ltd.
- Brightfarms Inc.
- Agrilution GmbH
- American Hydroponics (US)
- Illumitex Inc.
- AeroFarms
For instance, Signify collaborated with Siemens in 2023 for the provision of IT services in vertical farming. It states how technology can be utilized to control processes like planting, lighting, and watering.
The global vertical farming market is segmented as follows:
By Components Segment Analysis
- Sensors
- Climate Control
- Irrigation Systems
- Lighting Systems
By Structures Segment Analysis
- Shipping Containers
- Vertical Farms
- Building-Based Vertical Farms
By Types Segment Analysis
- Aquaponics
- Aeroponics
- Hydroponics
By Crop Categories Segment Analysis
- Flowers & Ornaments
- Fruit, Vegetables & Herbs
- Others
By Regional Segment Analysis
- North America
- The U.S.
- Canada
- Mexico
- Europe
- France
- The UK
- Spain
- Germany
- Italy
- Rest of Europe
- Asia Pacific
- China
- Japan
- India
- Australia
- Southeast Asia
- Rest of Asia Pacific
- The Middle East & Africa
- Saudi Arabia
- UAE
- Egypt
- Kuwait
- South Africa
- Rest of the Middle East & Africa
- Latin America
- Brazil
- Argentina
- Rest of Latin America
Table of Content
Industry Major Market Players
- Vertical Farm Systems
- Green Sense Farms LLC
- GrowUp Urban Farms Ltd.
- Freight Farms
- Everlight Electronics Co. Ltd.
- Brightfarms Inc.
- Agrilution GmbH
- American Hydroponics (US)
- Illumitex Inc.
- AeroFarms
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