Global Vertical Farming Market By Structure (Building-Based Vertical Farm and Shipping Container-Based Vertical Farm), By Growth Mechanism, By Component, By Crop Category, By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032

Report Overview

The Global Vertical Farming Market size is expected to be worth around USD 35.3 Billion by 2032 from USD 5.6 Billion in 2022, growing at a CAGR of 20.80% during the forecast period 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.

Vertical farming saves about 90% amount of water compared to traditional methods. Vertical farming is also helpful in improving biodiversity because it does not cause a land surface disturbance. 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.

Driving Factors

High Nutritional Values and Changing Climatic Conditions driving the Demand for Vertical Farming

Individuals worldwide are more aware of food’s health and nutritional values, and due to this, 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. 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.

Vertical farming uses climate control systems, irrigation systems, which help maintain greenhouse temperature, and climatic conditions, which help in better crop yield. Vertical farming is also done near places where consumer demand is high. Thus, this method also minimizes transportation costs, which is a major factor in the growth of the vertical farming market. 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, increasing groundwater depletion and continuously changing climatic conditions drive the demand for vertical farming.

Restraining Factors

High Initial Cost for Vertical Farming Infrastructure Restraining the Growth of the market

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

Growth Opportunities

Technological Advancements and High Consumer Demand is Expected to Create Significant Growth Opportunities in Market

Global 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. The population of countries is increasing continuously, and traditional farming yields are unable to fulfill the needs and demands of consumers. Due to this, farmers are worldwide shifting towards indoor farming to overcome malnutrition issues. 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.

Trending Factors

The adoption of Robotics and the Introduction of AI in Vertical Farming is a Current Trend in Market

Implementing robotics and artificial intelligence in vertical farming tracking the growth of crops using sensors. Robots in vertical farming help in moving farms from one place to another. Also, AI technologies in vertical farming help to manage light, temperature, and water supply, reducing labor costs. With continued changes in climatic conditions and less groundwater availability, farmers are more inclined towards vertical farming. Vertical farming market companies build their plants near the region with high consumer demand, saving transportation costs.  Big companies in the vertical farming market are steadily moving toward consolidation through joint ventures, collaborative partnerships, and mergers & acquisitions. Such trends are witnessed in the vertical farming market, boosting the demand for vertical farming.

Structure Analysis

Shipping container-based vertical farms are dominant in the market

Based on structure, the global vertical farming market is classified into a building-based vertical farm and a shipping container-based vertical farm. The shipping-container-based vertical farm segment dominates the market with the largest market share of 53% in 2022 and is expected to remain dominant during the forecast period. Growth of the segment is propelled by the ability of structure that helps 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. However, some drawbacks of shipping container-based vertical farming are less output and antagonism between heat, layout, and light. Increasing technological advancements in shipping container-based vertical technology and increasing penetration of precision farming are driving the growth of this segment. Shipping container-based vertical farming saves water compared to Building-based vertical farms, which is cost-effective and assures food security compared to traditional methods.

Growth Mechanism Analysis

The Hydroponics segment holds the majority of the market share

The growth mechanism segment is classified into hydroponics, aeroponics, and aquaponics. The hydroponics segment accounted for the majority of the market share of 38% in 2022 and is expected to remain dominant over the forecasted period. The segment growth is attributed to higher yield, ease of operation, and low installation costs. Hydroponics is a technique of growing plants using water-based nutrition solutions other than using any medium, such as soil. Hydroponics saves about 95% of water compared to traditional methods and increases crop production, a key factor for segment growth. Using hydroponics, plants can grow 40-50% faster and produce 30% more than plants growing in soil. Most plants, such as tomatoes, cucumbers, watercress, leaf lettuce, and herbs, can grow using hydroponics. Hydroponics systems can use inert growth mediums outdoors and indoors throughout the year. In dissolved solution forms, minerals are given to plants and fed directly to plant roots. Due to this, plants grow mostly upward and offer fast growth and higher yield. Increasing consumer awareness regarding fertilizers and pesticides is expected to propel market growth. The aquaponics systems segment is anticipated to grow at the fastest CAGR during the forecast period because it eliminates using hazardous chemicals for cultivation. Water used in aquaponics contains fish wastes with high nutrition values, which helps increase plant growth and nutrition. In aeroponics systems, plants are hung in a dark chamber and are sprayed with nutrition-rich solutions, which helps reduce cost and ground plots.

Component Analysis

The lighting System Segment is Dominant in Market

Based on components, this market is classified into irrigation & fertigation systems, lighting systems, sensors, climate control, building material, and others. The lighting segment was dominant in the market, with the largest market share of 32% in 2022, and is expected to remain dominant during the forecast period. 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. The climate control segment is expected to grow at the fastest CAGR during the forecast period due to the increasing adoption of hydroponics systems by farmers to control the use of water. In the climate control system, plants are grown in a greenhouse under a controlled environment that provides proper needs for the healthy growth of plants. The climate control system monitors plants’ water supply, humidity, temperature, carbon dioxide, and nutritional elements. Various irrigation systems are used in vertical farming, such as Flood & Drain, Nutrient Film Technique(NFT), and deep water culture, which effectively save water.

Crop Category Analysis

The fruit, Vegetables & Herbs Segment is Dominant in Market

Based on crop, the category market is classified into fruits, vegetables & herbs, flowers & ornamentals, and others. The fruit vegetable & herbs segment was dominant in the market with the largest market share in 2022 and is expected to remain dominant during the forecast period. The vertical farming technique is cost-effective and provides maximum profit to cultivation companies. Also, it improves biodiversity and does not affect the environment. Vertical farming uses hydroponics techniques, which help provide nutritional value to crops. The yield taken from vertical farming is safer and contains high nutritional values compared to traditional farming methods. Fruit vegetables & herbs such as cucumbers, bell, tomatoes, and strawberries are highly sensitive to excess heat. Vertical farming uses climate control systems for farming, which is helpful in farming fruit, vegetables & herbs. The flower and ornamental segment is anticipated to grow at the fastest CAGR during the forecast period. The growth of the segment is propelled by increasing demand for flowers & ornamentals in decoration.

Key Market Segments:

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

Regional Analysis

North America is estimated to hold a major share of the global vertical farming market, with the largest market share of 35% in 2022. In North America, there are large numbers of vertical farms across the U.S.  The advancements in R&D facilities and the technological adoption rate is greater. As such, the market for vertical farming is anticipated to grow. Moreover, 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, which is grown in vertical farming and is expected to fuel the market during the forecast period.

Due to increasing agricultural startup investments, Europe is anticipated to gain significant market growth during the forecast period. Also, the increasing adoption of nanotechnology and robotics in vertical farming drives market growth. The Asia Pacific region is anticipated to grow significantly due to the increasing population.

Key Regions and Countries Covered in this Report:

• North America
  • The US
  • Canada
  • Mexico
• 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

Market Share & Key Players Analysis:

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.

Market Key Players:

Listed below are some of the most prominent key market players in the vertical farming market

• 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

Recent Developments:

• 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.

Report Scope: