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Overview
New York, NY – August 28, 2025 – The Global Indoor Farming Market was valued at USD 33.9 billion and is projected to reach USD 93.0 billion by 2032, with an estimated CAGR of 10.9% from 2023 to 2032. Indoor farming involves cultivating crops in controlled environments, often using vertical farming techniques where plants are grown in stacked layers.
This approach typically employs soilless methods such as aeroponics, hydroponics, and aquaponics, combined with controlled-environment agriculture, to maximize plant growth efficiency. Growing consumer demand for fresh, high-quality produce is expected to drive market expansion. Additionally, the rising global population, particularly in developing nations like India and China, is increasing food demand, further boosting the indoor farming market’s growth over the forecast period.
Key Takeaways
- Market Developments: Market projections suggest that the indoor farming market will experience a compound annual growth rate (CAGR) of 10.9% from 2023-2032.
- Growing System Analysis: Hydroponics held onto its market lead with its highest market share – this trend is predicted to remain prevalent during the forecasted period.
- Facility Analysis: The indoor vertical farming market size is projected to experience the fastest compound annual growth during its projected period, due to an increasing interest in using environmentally sustainable production methods for producing vegetables and fruit, as well as shifting consumer purchasing patterns towards organic foods, which should further drive its demand.
- Component Analysis: Due to advances in farming practices and technology, software sales are expected to experience compound annual compound annual compound annual compound annual compound compound annual compound average growth exceeding 13.5% from 2023-2032.
- Crop Type Analysis: Fruits and vegetables are anticipated to lead the indoor farming market during 2022, specifically tomato, as it’s widely known for its rapid production rates.
- Regional Analysis: Europe held the leading market share and is forecasted to remain so throughout its forecast period. Europe’s indoor farming market’s continued lead may be attributable to the increasing adoption of indoor farming technology (such as Controlled Environment-Agriculture (CEA).
Report Scope
| Report Features | Description |
|---|---|
| Market Value (2022) | USD 33.9 Billion |
| Forecast Revenue (2032) | USD 93.0 Billion |
| CAGR (2023-2032) | 10.9% |
| Segments Covered | Based on Growing System – Aeroponics, Hydroponics, Aquaponics, Hybrid, and Soil-Based, Based on Facility Type – Greenhouse, Indoor Vertical Farms, Container Farms, Indoor Deep Water Culture Systems, and Other Types, Based on Component – Hardware, Software & Service, Based on Crop Type – Fruits & Vegetables, Herbs & Microgreens, Flowers & Ornamentals, and Other Crop Types |
| Competitive Landscape | Hydrodynamics International, Argus Control System Limited, Richel Group, Signify Holding, Everlight Electronics, Illumitex, LumiGrow, Signify Holding, Vertical Farm Systems, General Hydroponics, Scotts Miracle-Gro, and Other Key Players |
Key Market Segments
Facility Type Insights
The indoor vertical farming segment is poised to achieve the highest compound annual growth rate (CAGR) during the forecast period, fueled by the increasing adoption of eco-friendly fruit and vegetable production. Shifting consumer preferences toward organic food are also boosting demand for indoor farming.
Indoor vertical farming employs advanced technologies, such as controlled environment agriculture, which manages light, environmental monitoring, and fertigation to protect crops from extreme weather. Meanwhile, the greenhouse segment held the largest market share in 2022. Greenhouses, enclosed structures made of transparent materials, enable controlled climates to enhance crop quality and yield compared to traditional farming methods.
Component Analysis
The hardware segment dominated the indoor farming market in 2022 and is expected to continue leading during the forecast period. Hardware components, including sensors, irrigation systems, climate control systems, and lighting systems, are critical for maintaining optimal indoor farming conditions. Among these, climate control systems comprising heaters, chillers, air movement fans, air-conditioning units, and humidifiers are projected to be the fastest-growing segment from 2023 to 2032 due to their role in creating ideal plant growth environments.
Software solutions track crop batches, grower details, and production areas. The market is divided into cloud-based and web-based software, with cloud-based solutions expected to see significant growth. These systems collect real-time data, processed with machine learning to optimize environmental parameters affecting crop yield and quality.
Crop Type Insights
In 2022, the fruits and vegetables segment led the indoor farming market and is expected to maintain its dominance through the forecast period. Tomatoes were the top cultivated crop in 2022 due to their rapid production cycle. The large-scale cultivation of crops like lettuce, tomatoes, cucumbers, leafy greens, chili peppers, and bell peppers drives market growth, offering substantial profits to producers.
The flowers and ornamentals segment is expected to contribute significantly to market growth, projected to account for over 30% of the market share in the coming years. Increased demand for flowers and ornamentals for decorative and aesthetic purposes is a key growth driver. Within this segment, ornamental flowers held the largest market share in 2022, supported by rising sales.
Regional Analysis
In 2022, Europe held the largest market share in the indoor farming sector and is expected to maintain its dominance throughout the forecast period. The region’s growth is driven by the increasing adoption of advanced technologies, such as Controlled Environment Agriculture (CEA), which enhances farming efficiency. The use of innovations like LED lighting and active heat systems is boosting crop yields, while regional government initiatives support indoor farming to address challenges like population growth, climate change, and sustainable food production.
European farm owners are also investing heavily in technologies such as crop monitoring sensors and LED systems, which help reduce labor costs and improve productivity. The Asia Pacific region is projected to experience the highest CAGR during the forecast period. Countries like Japan and China are expected to see significant growth due to the presence of numerous indoor farming facilities.
The region’s rapidly growing population has increased demand for organic food, driving the development of vertical farms and greenhouses. Additionally, growing awareness of alternative farming methods, spurred by limited fertile agricultural land, is expected to further fuel market growth in the region.
Top Use Cases
- Urban Food Production: Indoor farming allows cities to grow fresh fruits, vegetables, and herbs locally, reducing the need for long-distance food transport. It uses vertical spaces like warehouses, saving land. Controlled environments ensure year-round harvests, meeting urban demand for fresh, pesticide-free produce, and supporting food security in densely populated areas.
- Sustainable Agriculture: Indoor farming cuts water use compared to traditional methods through systems like hydroponics. It eliminates pesticides, producing cleaner crops. Energy-efficient LED lights and climate control reduce environmental impact, appealing to eco-conscious consumers and aligning with global sustainability goals for greener farming practices.
- Year-Round Crop Supply: Indoor farms control light, temperature, and humidity, enabling consistent crop production regardless of weather or season. This ensures a steady supply of fresh produce like leafy greens and berries, reducing reliance on imports and stabilizing food prices for retailers and consumers throughout the year.
- Specialty Crop Cultivation: Indoor farming is ideal for growing high-value crops like microgreens, herbs, and medicinal plants. Precise control over growing conditions boosts quality and yield. This meets rising demand for organic and niche products, offering farmers higher profits and catering to health-conscious consumers seeking premium, fresh produce.
- Food Security in Harsh Climates: In regions with extreme weather or limited arable land, indoor farming provides a reliable food source. Controlled environments protect crops from droughts or floods, ensuring consistent production. This is vital for remote or urban areas, reducing dependence on external food supplies and enhancing local resilience.
Recent Developments
1. Hydrodynamics International
Hydrodynamics International continues to advance its AquaSpy Grow irrigation and fertigation control systems. Recent developments focus on integrating more sophisticated data analytics and machine learning to optimize water and nutrient delivery based on real-time plant needs. This enhances resource efficiency and crop yield for large-scale commercial greenhouses and indoor farms, solidifying their role in precision agriculture technology.
2. Argus Control Systems Limited
Argus has been a key automation provider for major vertical farms like Kalera and Plenty. Their recent development is the enhanced integration of their environmental control systems with other software platforms. This creates a unified “smart farm” ecosystem, allowing operators to manage climate, irrigation, and energy use seamlessly while correlating data directly with production and financial outcomes.
3. Richel Group
As a major greenhouse construction leader, Richel Group’s recent focus is on energy resilience and sustainability. They are integrating advanced energy screens, hybrid heating systems, and large-scale rainwater capture/recycling into their designs. This addresses the soaring energy costs in Europe, helping growers achieve greater independence and reduce their carbon footprint through innovative infrastructure.
4. Signify Holding
Signify continues to innovate in horticultural lighting under its Philips GreenPower LED brand. A key recent development is the introduction of the new production module, a scalable, all-in-one LED lighting solution designed specifically for vertical farming. It simplifies installation and maintenance while providing a uniform light recipe, aiming to reduce the operational complexity and initial investment barrier for new vertical farm operators.
5. Everlight Electronics
Everlight’s Agri-Lighting division has been expanding its range of full-spectrum and tunable LED horticultural lighting solutions. A recent strategic development is their focus on providing high-PAR efficiency at a competitive cost. They are targeting the mid-market segment, offering reliable and energy-efficient lighting fixtures to make controlled environment agriculture more accessible and affordable for a broader range of growers.
Conclusion
Indoor farming is transforming agriculture by addressing urbanization, sustainability, and food security challenges. It offers efficient, eco-friendly solutions for fresh produce. Technologies like hydroponics and AI-driven systems enhance yields, while urban farms reduce transport costs. Despite high setup costs, its long-term benefits make it a promising investment for sustainable food production.
