Vertical Farming Market Analysis and Global Forecast 2023-2033

Vertical Farming Market Overview

The Vertical Farming Market Size is expected to reach USD 40.46 Billion by 2033. The Vertical Farming Market industry size accounted for USD 5.05 Billion in 2023 and is expected to expand at a compound annual growth rate (CAGR) of 24.61% from 2023 to 2033. The vertical farming market refers to the sector of agriculture that involves the cultivation of crops in vertically stacked layers or structures, typically indoors or within controlled environments. This innovative farming method utilizes techniques such as hydroponics, aeroponics, and aquaponics to grow a wide range of produce without the need for traditional soil-based farming.

Vertical farming is often implemented in urban areas where land availability is limited, allowing for efficient use of space and proximity to consumers. The vertical farming market encompasses various stakeholders, including technology providers, equipment manufacturers, urban planners, agricultural entrepreneurs, investors, and consumers. It is driven by factors such as increasing urbanization, population growth, demand for locally grown and sustainably produced food, advancements in agricultural technology, and concerns about food security and environmental sustainability.

Global Vertical Farming Market Synopsis

COVID-19 Impact Analysis

The COVID-19 pandemic had significant impacts on the vertical farming market. The disruption of global supply chains during the pandemic led to heightened interest in local food production. Vertical farms, being closer to urban centers, gained attention as a way to ensure a more resilient and reliable food supply. This increased demand for locally grown produce benefited the vertical farming market. Concerns about food safety grew during the pandemic, prompting consumers and businesses to prioritize food security and hygiene. Vertical farming, with its controlled indoor environments, gained credibility for offering a safer and more secure food production system, driving further investment and adoption. The pandemic highlighted the vulnerabilities of traditional agriculture systems, accelerating investment and innovation in alternative farming methods like vertical farming. Venture capital funding and government support increased for vertical farming startups and research initiatives aimed at improving efficiency, scalability, and sustainability.

Vertical Farming Market Dynamics

The major factors that have impacted the growth of Vertical Farming Market are as follows:

Drivers:

Ø  Rapid Urbanization

The world is experiencing significant urbanization, with more people living in cities than ever before. Urban areas often lack the space for traditional horizontal farming methods. Vertical farming offers a solution by utilizing vertical space in urban environments, allowing for efficient food production closer to consumers. Climate change is leading to more frequent and severe weather events, posing challenges to traditional agriculture. Vertical farming offers climate-resilient solutions by providing controlled environments that are not dependent on outdoor weather conditions, ensuring consistent crop yields year-round. Water scarcity is a significant concern for agriculture, particularly in regions facing droughts and water shortages. Vertical farming utilizes hydroponic and aeroponic systems that require significantly less water compared to traditional soil-based farming, making it a more sustainable option in water-stressed areas.

Restraint:

• Perception of High Initial Investment Costs

Setting up a vertical farm requires significant upfront investment in infrastructure, technology, lighting systems, climate control, and automation equipment. The initial capital expenditure can be a barrier to entry for smaller farmers or startups, limiting the widespread adoption of vertical farming. Vertical farming operations often require substantial energy inputs to power lighting, heating, ventilation, and other systems necessary for plant growth. The high energy consumption contributes to operational costs and environmental impact, particularly if the energy source is not renewable. Vertical farming is most suitable for leafy greens, herbs, and certain vegetables, but it may not be feasible for all types of crops. Scaling up production beyond certain crop types can be challenging due to technological limitations, space constraints, and economic feasibility.

Opportunity:

⮚      Growing Urban Agriculture and local food production

With the increasing urbanization of the global population, there is a growing need for sustainable food production solutions within cities. Vertical farming offers the opportunity to utilize underutilized urban spaces such as rooftops, abandoned buildings, and indoor environments to grow fresh produce closer to consumers, reducing transportation costs and food miles. Consumers are increasingly interested in locally grown, fresh produce due to concerns about food safety, quality, and sustainability. Vertical farming allows for year-round production of high-quality fruits, vegetables, and herbs in controlled indoor environments, meeting the demand for locally sourced food and reducing dependence on long-distance food supply chains. The integration of advanced technologies such as artificial intelligence, machine learning, robotics, and IoT sensors presents opportunities to optimize vertical farming operations, improve efficiency, and reduce labor costs. Automation of tasks such as planting, harvesting, and monitoring crop health can increase productivity and scalability, making vertical farming more economically viable.

Vertical Farming Market Segment Overview

By Growth Mechanism

Based on Growth Mechanism, the market is segmented based on Hydroponics, Aeroponics and Aquaponics. The hydroponics segment is dominant the market. Because of its inexpensive installation costs and ease of use, hydroponics is a popular growth method. It is a method of growing plants without soil in which a mineral solution is put around the plant roots in place of soil. Furthermore, the hydroponics technology eliminates the risk of soil organisms causing disease. Consumers’ growing knowledge of the dangers of pesticides is projected to drive up demand for hydroponics.

By Component Type

Based on Component Type, the market segment has been divided into the Lighting, Sensor, Climate Control, Building Material, Irrigation Component and Others. The climate control segment dominated the market. Farmers’ increased adoption of hydroponic components to reduce the weight load and infrastructure required to sustain the equipment is expected to drive demand for hydroponic components. Climate control agriculture involves growing plants inside a glasshouse in a controlled climate that allows a producer to maintain and monitor the right supply of light, carbon dioxide, water, humidity, pH levels, and nutrients for crop growth.

By Crop Type

Based on Crop Type, the market segment has been divided into the Tomatoes, Broccoli, Lettuce, Strawberries, Spinach and Others. The tomato segment dominated the market,. Culturing a lot of tomatoes in a small area is possible with vertical tomato farming in greenhouses. Vertical gardening is an effective and sustainable way to raise tomatoes in cities. It can yield more, create fresher, healthier produce, and require less shipping and chemicals.

By Structure Type

Based on Structure Type, the market segment has been divided into the Building Type Vertical Farms and Container Type Vertical Farms. The container-based vertical farms segment dominated the market. This expansion is ascribed to the structure’s ability to assist in crop production regardless of geographic location. One of the key advantages of container farming is that it is easy to transport, and it does not require a large plot of ground or a dedicated facility to begin cultivating. Furthermore, as competition increases, the price of shipping containers falls since the cost of acquiring old containers is relatively low, allowing other enterprises to enter the market.

Global Vertical Farming Market Regional Analysis

Based on region, the global Vertical Farming Market has been divided into North America, Europe, Asia-Pacific, the Middle East & Africa, and Latin America. North America is projected to dominate the use of the Vertical Farming Market followed by the Asia-Pacific and Europe regions.

Vertical Farming North America Market

North America holds a dominant position in the Vertical Farming Market. North America, particularly the United States and Canada, is a leading market for vertical farming. The region has a strong focus on sustainability, innovation, and technology adoption, driving the growth of vertical farming startups and companies. Urban centers like New York City, Chicago, and Toronto have seen significant investment in vertical farming projects to meet the demand for locally grown produce.

Vertical Farming Asia-Pacific Market

The Asia-Pacific region has indeed emerged as the fastest-growing market for the Vertical Farming Market industry. Asia-Pacific is a rapidly expanding market for vertical farming, driven by population growth, urbanization, and increasing demand for fresh produce. Countries like Japan, Singapore, China, and Australia are investing in vertical farming to address food security challenges, limited arable land, and water scarcity. Singapore, with its limited land area, has emerged as a hub for vertical farming innovation and technology.

Competitive Landscape

The global Vertical Farming Market is highly competitive, with numerous players offering a wide range of software solutions. The competitive landscape is characterized by the presence of established companies, as well as emerging startups and niche players. To increase their market position and attract a wide consumer base, the businesses are employing various strategies, such as product launches, and strategic alliances.

Prominent Players:

• AeroFarms LLC
• Sky Greens
• Agrilution
• American Hydroponics
• Urban Crops
• Vertical Farm Systems
• Everlight Electronics Co. Ltd.
• Hort Americas
• 4D Bios Inc.
• Signify

Key Development

In May 2023, AeroFarms announced that it would be nationally expanding Amazon Fresh online and Amazon Fresh Grocery stores. This partnership will help AeroFarms build on a national success of industry-first Whole Food Market Global Planogram.

Scope of the Report

Global Vertical Farming Market, by Growth Mechanism

• Hydroponics
• Aeroponics
• Aquaponics

Global Vertical Farming Market, by Component Type

• Lighting
• Sensor
• Climate Control
• Building Material
• Irrigation Component
• Others

Global Vertical Farming Market, by Crop Type

• Tomatoes
• Broccoli
• Lettuce
• Strawberries
• Spinach
• Others

Global Vertical Farming Market, by Structure Type

• Building Type Vertical Farms
• Container Type Vertical Farms

Global Vertical Farming Market, by Region

• North America
  • US
  • Canada
  • Mexico
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Benelux
  • Nordic
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • South Korea
  • Indonesia
  • Austalia
  • Malaysia
  • India
  • Rest of Asia Pacific
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Middle East & Africa
  • Saudi Arabia
  • UAE
  • Egypt
  • South Africa
  • Rest of Middle East & Africa

 

Parameters	Indicators
Market Size	2033: $40.46 Billion/strong>
CAGR	24.61% CAGR (2023-2033)
Base year	2022
Forecast Period	2023-2033
Historical Data	2021
Report Coverage	Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
Key Segmentations	Growth Mechanism, Component Type, Crop Type, Structure Type
Geographies Covered	North America, Europe, Asia-Pacific, Latin America, Middle East, Africa
Key Vendors	AeroFarms LLC, Sky Greens, Agrilution, American Hydroponics, Urban Crops, Vertical Farm Systems, Everlight Electronics Co. Ltd., Hort Americas, 4D Bios Inc. and Signify.
Key Market Opportunities	• Growing Urban Agriculture and local food production • Tech Integration and Automation
Key Market Drivers	• Rapid Urbanization • Climate Change and Extreme Weather Events

 

REPORT CONTENT BRIEF:

• High-level analysis of the current and future Vertical Farming Market trends and opportunities
• Detailed analysis of current market drivers, restraining factors, and opportunities in the future
• Vertical Farming Market historical market size for the year 2021, and forecast from 2023 to 2033
• Vertical Farming Market share analysis at each product level
• Competitor analysis with detailed insight into its product segment, Government & Defense strength, and strategies adopted.
• Identifies key strategies adopted including product launches and developments, mergers and acquisitions, joint ventures, collaborations, and partnerships as well as funding taken and investment done, among others.
• To identify and understand the various factors involved in the global Vertical Farming Market affected by the pandemic
• To provide a detailed insight into the major companies operating in the market. The profiling will include the Government & Defense health of the company’s past 2-3 years with segmental and regional revenue breakup, product offering, recent developments, SWOT analysis, and key strategies.