Vertical farming market size was valued at USD 6.92 billion in 2023 and is expected to grow at a CAGR of 20.1% from 2023 to 2030.

Vertical Farming Market Size & Trends

The global vertical farming market size was valued at USD 6.92 billion in 2023 and is expected to grow at a CAGR of 20.1% from 2023 to 2030.

Vertical farming refers to growing food in vertically stacked layers, like within an old warehouse, skyscraper, or shipping container. Organic foods are also seen as healthier, more nutritious, safer, and more environmentally friendly. An important consideration that impacts the demand for organic food is the food buying behavior of consumers, which is necessary for manufacturers, policymakers, and suppliers to design effective marketing strategies.

Heart diseases and obesity are widespread health-oriented issues among the customers. Also, increasing groundwater depletions and climatic alterations have forced the conventional growers to switch over to alternative ways of farming. Escalating worries regarding customers’ health along with the factors discussed above would make industry demand likely to surge higher.

In contrast to conventional farming, indoor farming has the ability to grow crops all year round, which translates to higher productivity. In addition, indoor farming has the ability to shield crops from harsh weather conditions using methods such as controlled environment agriculture technology, where facilities employ artificial environmental control, light control, and fertigation.

Growing demand for quality food, autonomous agriculture methods, and urbanization are some of the key drivers that are accountable for market growth. These have raised the need for food. Food demand is predicted to see considerable growth with an escalating population up to 2030. Using vertical cultivation methods enables customers to cultivate crops within a warehouse or a building of multiple stories.

Market Concentration & Characteristics
The growth stage of the vertical farming market is high. The vertical farming market is experiencing a high level of innovation, as characterized by the use of sophisticated technology such as sensors and cameras for the improvement of resource efficiency, maximum yields, and treatment of issues such as space limitations and environmental factors. Technologies like hydroponics, aeroponics, LED grow lights, and automation systems are also widely utilized to improve efficiency and product quality.

Market Dynamics
The vertical farming market growth is driven by factors like constant population growth, government subsidies, restricted cultivable land availability, and the rising demand for high-quality and fresh produce. In addition, the rising consumer demand for organic food is having a positive influence on the growth of the vertical farming market, which is generating lucrative business opportunities. As consumers give more importance to organic products, vertical farming is a feasible solution to address this demand.

Vertical farms are becoming technology-driven, where LED lights and automated control systems are used to customize to the growing environment. Some vertical farm service providers are placing their operations close to city centers to leverage the growing need for local produce. Thus, becoming more and more capital-hungry, along with leveraging venture funding and other sources in order to establish the infrastructure, is required to compete in the market today. Different sectors, especially food & beverage, suffered as a result of labor shortage and supply chain disruption. Nonetheless, the COVID-19 pandemic presented various opportunities for the vertical farming industry. Urban agriculture gained more popularity due to the pandemic. For example, East Japan Railway Company and Infarm partnered in February 2020 to provide fresh food grown and harvested in retail spaces. These new developments will be expected to offer future growth prospects in these nations.

Component Insights
Based on components, vertical farming market is divided into hardware, software, and services. Hardware segment held the largest market share in 2022. Hardware plays an important part in sustaining an environment in vertical farming. The segment is divided further into lighting, hydroponic components, climate control, and sensors. The lighting segment dominated the market and held over 44.46% of the world’s hardware revenue in 2022. Most of the lighting segment can be due to the reliance of vertical farms on artificial lighting. Artificial lights supply adequate light intensities needed for plant growth. The climate control segment is likely to hold the highest CAGR of 20.6% during the forecast period. Growing demand for hydroponic components by farmers to reduce weight load and infrastructure required to support machinery is expected to fuel demand for hydroponic components.

Climate control is a type of farming in which plants are cultivated within a greenhouse in a controlled environment where growers can maintain and regulate adequate supply of light, carbon dioxide, water, humidity, pH levels, and nutrients for crop development. The overall goal of climate-controlled farming is to allow protection and ensure maximum growth conditions throughout the crop’s development period. Climate-controlled farming is typically employed in most cases for the purpose of ensuring optimal nutrients for plant growth.

Regional Insights
On the revenue front, Europe led the vertical farming market in 2022 with a market share of about 31.7% and is likely to continue leading between 2023 and 2030. Rising awareness about the need for alternative farming due to lesser availability of fertile land for agriculture and growing population in the region is the primary factor that is likely to drive the demand.

Vertical Farming Market Trends, by Region, 2024 – 2030
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Europe is expected to experience considerable growth within a forecasted timeframe due to the increasing development of genetically modified crop technology. In addition, the rising use of nanotechnology and robotics in agriculture increases regional market demand. Utilization of nanotechnology assists in enhancing food packaging and disease and pest control.

The European Environment Agency has conducted various projects to construct vertical farms with the aim of overcoming issues of sustained population increase and climate change, as well as harvesting food in an environment-unfriendly manner. This has led to an increased market demand in the region.

The expanding urban population and indoor farming commercialization are projected to fuel demand in Africa. Lack of funds to construct sophisticated vertical farms and reduced access to water and land will, however, hold back regional market development. To mitigate such limitations, models adopted in the region include sack gardens and vertically stacked wood crates.

Key Companies & Market Share Insights
Some of the prominent players in the market are Agrilution GmbH; Aerofarm; Brightfarms Inc.; Everlight Electronics Co., Ltd; Freight Farms; GrowUp Urban Farms Ltd.; Green Sense Farms, LLC; Vertical Farm Systems.

Vertical Farm Systems is involved in the creation of fully automated growing systems with reusable medium and energy efficient climate cells. The company uses artificial intelligence (AI) and automation for optimal growing conditions.
Brightfarms Inc., is a company that deals in indoor farming and offers fresh packaged salad. The firm retails their product locally that are cultivated in controlled environment. The firm is leaning towards innovation of effective vertical farming system with emphasis on resource efficiency and sustainable operations.
Bowery Farming and Aerofarm are some of the new market entrants in the target market.

Bowery Farming is involved in solutions concerning vertical farming and digital farming. Bowery Farming is a New York headquartered firm with farms in New Jersey, Maryland, and Pennsylvania.
Aerofarm, is an American-based indoor vertical farming solutions provider. The firm utilizes artificial intelligence and plant biology to repair the broken food system and enhance the growth of fresh produce