Vertical Farming Market Size, Share & Industry Analysis, By Type (Hydroponics, Aeroponics, and Aquaponics), By Structure (Building-Based Vertical Farms and Shipping-Container Vertical Farms), By Component (Lighting System, Irrigation and Fertigation System, Climate Control, Sensors, and Others), and Regional Forecast, 2024-2032

The global vertical farming market size was valued at USD 5.70 billion in 2023. The market is projected to grow from USD 6.92 billion in 2024 to USD 50.10 billion by 2032, exhibiting a CAGR of 28.1% during the forecast period.

Vertical farming system mainly refers to cultivating crops in vertically loaded layers in place of a traditional farm or single surface, such as a field or greenhouse. Usually, cultivators integrate these layers into vertical arrangements, such as skyscrapers, shipping barrel, containers, used warehouses, and abandoned mine channels. It is characterized by the cultivation of crops in vertically stacked layers, utilizing controlled environments, and advanced technologies integrated with hydroponic, aeroponics, and aquaponics farming systems. Growing urbanization and insufficiency of arable land and advancements in light-emitting diode (LED) technology are the key factors which drive the market growth during the forecast period.

Advancements in vertical farming automation, including robotic harvesting and vertical conveyor systems, streamline operations and reduce labor costs, contributing to overall operational efficiency and profitability. For instance,

• In October 2023, Colruyt Group introduced the CoolGrow VF light in collaboration with Mecha Tronix, a LED grow light producer in the Europe. The new CoolGrow VF light makes vertical farming installations up to 38% more energy efficient than traditional setups.

The COVID-19 pandemic slowed down the world’s economy and impacted various sectors, including food and agriculture sector. The agriculture sector was impacted drastically owing to supply chain disruption, shortage of food supplies, and suspended import and export across nations. Lack of labor and government-imposed lockdown across countries affected the logistics and harvesting plans across the agriculture sector. The issues of labor shortages and international supply chains were highlighted during the COVID-19, driving the demand for vertical farming.

IMPACT of AI

Implementation of AI Helps to Automate Operation Capabilities for Enhancing Farm Efficiency to Fuel Market Growth

The use of artificial intelligence in farming enables farmers to automate precarious operations such as watering, temperature control, and lighting. This offers farmers and growers free time while directing other crucial business and cultivation setup aspects. By incorporating AI-driven mechanisms into vertical farming operations, growers and farmers can improve their operations, upsurge productivity, and accomplish sustainable and proficient crop cultivation.

The blend of artificial intelligence aids in advancing a brighter future for the farming sector and the battle against climate change. The following are some advantages of implementing artificial intelligence in vertical farming - 

• AI empowers accuracy in farming, where every plant's requirements are accurately monitored and fulfilled. With real-time data gathering and analysis, AI algorithms helps to determine the amount of water, light, and nutrients essential for optimum growth.


• AI enable farmers with data-powered insights, letting them make up-to-date decisions regarding planting agendas, pest control, crop rotations, and resource distribution. AI can also recognize trends and patterns, facilitating farmers to optimize their approaches for profitability and maximum yields.

Some other benefits of adopting artificial intelligence mechanisms in vertical farming include better resource efficiency, promotion of sustainability, early detection of insects, pests, and nutrient deficiencies in crops, automation of vertical farming practices, and many more. Various market key players are enhancing their offerings with the adoption of AI through new product launches, partnerships, investments, and many more.

• In January 2023, Siemens partnered with 80 Acres to offer key mechanisms for 80 Acres' farm abilities and processes through Infinite Acres' Loop solution. Siemens Technology is using artificial intelligence and ML to build an application that enhances software to detect irregularities and escape adverse circumstances within the crops.

Thus, the emerging advancements in artificial intelligence are anticipated to create lucrative opportunities and fuel the market progress.

Vertical Farming Market Trends

Incorporating Robotics and Artificial Intelligence (AI) into Farming Operations to Fuel Market Growth

Vertical farming robots encompass a range of automated systems, including robotic arms, drones, and conveyors, designed to streamline various crop cultivation, management, and harvesting tasks. These robotic systems leverage advanced technologies such as computer vision and machine learning to perform precise actions, such as planting seeds, monitoring crop health, and harvesting produce efficiently and accurately.

Similarly, AI is crucial in optimizing and enhancing the decision-making process within farming environments. AI algorithms analyze data collected from sensors, cameras, and IoT devices deployed throughout the farm to monitor environmental conditions, assess crop health, and predict optimal cultivation strategies. By processing large volumes of data in real-time, AI-driven systems can dynamically adjust variables such as lighting, temperature, humidity, and nutrient levels to maximize crop yields and quality. Additionally, AI algorithms can detect early signs of plant diseases, pests, or nutrient deficiencies, enabling proactive intervention and preventive measures to safeguard crop health and minimize losses. For instance,

• In February 2024, Masdar City in Abu Dhabi, known for sustainability and innovation, initiated an indoor vertical farm in collaboration with Alesca Technologies, an AgriTech company, aiming to tackle food security challenges. This project utilizes automated equipment and AI software to cultivate fresh leafy greens, lettuce, and herbs, ensuring they are chemical-free and ready for consumption.

Therefore, implementing robotics and AI in vertical farming represents a paradigm shift in agricultural practices, driving innovation and transformation across the industry.

Vertical Farming Market Growth Factors

High Nutritional Values and Changes in Climatic Conditions to Accelerate Market Growth

The growing demand for vertical farming is primarily fueled by two pivotal factors: the heightened nutritional content of crops cultivated in vertical systems and the evolving climatic dynamics affecting traditional agricultural practices. It is an innovative agricultural method, entailing cultivating crops in vertically stacked layers within controlled indoor environments, leveraging advanced hydroponics and aeroponics to optimize resource utilization and crop growth. For instance,

• In June 2023, Bedrock and Vertical Harvest announced plans for Vertical Harvest Detroit, a 60,000 square foot structure in Detroit's Milwaukee Junction neighborhood. It features a 205,000 square foot growing canopy using hydroponic and vertical farming, producing 2.2 million pounds of vegetables yearly, including lettuce, greens, and herbs.

It offers a distinct advantage in delivering crops with elevated nutritional profiles. Through control over environmental parameters, including light spectrum, temperature, humidity, and nutrient composition, vertical farms can fine-tune growing conditions to maximize the accumulation of essential nutrients, antioxidants, and phytochemicals in cultivated crops. This precision cultivation approach produces superior nutritional quality and enhanced key nutrient bioavailability, catering to health-conscious consumers' sensitive preferences.

Thus, the convergence towards heightened nutritional benefits and climate resilience positions vertical farming as a crucial component of the future agricultural landscape.

RESTRAINING FACTORS

High Initial Cost to Impede the Market Growth

Vertical farming necessitates sophisticated equipment and infrastructure to create controlled indoor environments that are helpful for crop cultivation. This includes investments in specialized growing systems, LED lighting fittings optimized for plant growth, climate control mechanisms to regulate temperature and humidity, precise irrigation systems, and advanced automation technology to monitor and manage the growing environment. Moreover, the cost of re-building existing structures or constructing purpose-built facilities tailored for vertical farming further contributes to the substantial capital spending.

The high initial cost of vertical farming infrastructure poses a significant financial barrier for potential investors and operators, particularly for small-scale farmers or new entrants to the market. The substantial upfront investment required to initiate a vertical farm can discourage individuals or organizations from embracing farming practices. Additionally, the return on investment (ROI) may not be immediate, as it typically takes time for vertical farms to achieve full production capacity and begin generating revenue. As a result, the financial risk associated with vertical farming projects may deter some stakeholders from pursuing such initiatives.

Vertical Farming Market Segmentation Analysis

By Type Analysis

Usage of Less Soil and Water for Growing Safe And Healthy Food to Boosts the Demand for Hydroponics

Based on type, the market is divided into hydroponics, aeroponics, and aquaponics.

Hydroponics held a major vertical farming market share in 2023 and grow with maximum CAGR during the forecast period. Hydroponics uses 90% less water than traditional soil-based farming with minimal waste. Hydroponics is expected to dominate the market owing to the growing demand for safe and healthy food, improving food sustainability by eliminating the risk of soil organisms causing disease and reducing carbon emissions.

Whereas, aeroponics segment is estimated to gain traction because the system uses air as a medium and supercharges plant growth by providing additional oxygen at the root. Thus, this process enables fresh food delivery with rich flavors and maximum growth without pesticides.

These factors are projected to increase the adoption of vertical farms across the countries to deliver safe and fresh foods to consumers.

By Structure Analysis

Building-Based Vertical Farms Leads the Market Due To Demand for New Construction Projects

By structure, the market is split into building-based vertical farms and shipping-container vertical farms.

The building-based vertical farms holds largest market share due to growing demand among new buildings and new construction projects. As the new construction projects in cities aims to promote the deployment of farms. The building-based structure supports the growth of crops and also allows optimal air circulation and efficient automation. Thus, it is expected to grow with moderate CAGR during the forecast period.

As, companies have converted shipping containers into vertical farming facilities by integrating LED lights and drip irrigation systems with vertically stacked shelves to cultivate various plants. The shipping containers are connected to a growth management system, which allows for remote monitoring and control of all systems via a computer or mobile device. Hence, the demand for shipping-container is high as compared to building-based. Due to these reasons, the segment of shipping-container vertical farms is set to grow with the maximum CAGR during the forecast period.

By Component Analysis

Usage of LED Lighting System to Enhance the Growth of Indoor Plants to Create Opportunities for Market Growth

By component, the market is segregated into lighting system, irrigation and fertigation system, climate control, sensors, and others.

The lighting system is estimated to grow with highest CAGR and is expected to hold the maximum market share during the forecast period, as it helps to minimize power consumption and reduces operational costs. The increased demand for LED lights to grow indoor plants using containers by major market players fuels growth of the market across the globe.

The sensors is projected to grow with second highest growth rate owing to the increased adoption of advanced technologies such as artificial intelligence, the internet of things, and big data analytics across the vertical farms.

REGIONAL INSIGHTS

The market is studied across North America, South America, Europe, the Middle East & Africa, and Asia Pacific and each region is further studied across countries.

North America is expected to be a prominent contributor to the vertical farming market growth and held the maximum market share in year 2023. This is due to presence of major vertical farms in countries such as U.S. and Canada. Similarly, growing adoption of cutting-edge and automation technologies across the farms helps grow pesticide-free and year-round production of different crops in the region. Increased urbanization in countries such as the U.S. and Canada boosts the need for growing high-quality organic food by using substantial agriculture practices. For instance,

• In December 2023, Oishii introduced its newest offering, the Rubi Tomato, at select Whole Foods outlets in the US. These tomatoes, derived from a Japanese varietal called a "fruit tomato," are cultivated at Oishii's indoor vertical farms near New York City. This marks Oishii's third product entry into the consumer market and its first non-tomato product. Additionally, Oishii is extending the availability of its products to the Northeastern US region for the first time.

Asia Pacific is projected to grow with highest CAGR during the forecast period. As the growth of market in Asia Pacific implies a significant shift towards sustainable and resilient food production systems. The water scarcity and increased food demand due to the vast population of India, China, and Japan are expected to generate new market opportunities with remarkable growth across the region. The increasing effect of global warming in the region led to less rain, crop failure, climate change, and other environmental a social issues. Hence, to overcome these challenges the demand for innovative farming techniques is increasing in Asia Pacific. For instance,

• In October 2023, Aerospring Hydroponics, a Singapore-based company, entered the commercial farming sector with its patented aeroponic vertical systems. This system produces up to 30% greater yields using 90% less water than traditional farming.

Middle East & Africa is projected to grow with the second largest CAGR due to growing investment by agri-tech start-ups to expand the product portfolio and business presence in countries such as the United Arab Emirates (UAE), South Africa, Saudi Arabia, Israel, and others drive the market growth across the region. Rising developments in a controlled environment and indoor vertical agriculture farming boost the adoption of innovative and advanced farming solutions across the region.

Europe is anticipated to showcase moderate growth during the forecast period. This is due to increasing adoption of automation and digital technologies will likely fuel market growth during the forecast period. Similarly, increasing investments by large companies in the start-ups to deploy farming technology across the region drive the growth of the market.

• In February 2023, Futura Gaia, a French startup, secured C11 million in its second funding round to scale indoor vertical agriculture. Previous and new investors, including Banque des Territoires and private individuals through Sowefund, contributed to the raise. This follows a C2.5 million raise in 2020.

The lack of labor across the U.K. increases the demand for harvesting and farming automation techniques in Europe.

Similarly, the South America is in a developing phase due to the increasing adoption of seed technology, double cropping, crop rotation, precision agriculture, and cutting-edge machinery among Brazil and Argentina. Despite the COVID-19 pandemic, Brazil was the major exporter of agricultural products.

List of Key Companies in Vertical Farming Market

Technological Developments by Leading Companies to Aid Market Proliferation

Companies delivering different types of vertical farming methods mainly include Urban Crop Solutions, AeroFarms, Freight Farms, Inc., Plenty Unlimited Inc., VertiVegies, and Sky Greens are focusing on bringing development in operative and environmentally sustainable agricultural solutions. To expand their operations throughout the world, the market participants use various methods, such as acquisitions, partnerships, mergers, and collaborations. Besides, the report offers insights into the market trends and highlights key industry developments.

List of Key Companies Profiled:

• ams-OSRAM AG (Austria)


• Signify Holding (Netherlands)


• Heliospectra (Sweden)


• EVERLIGHT ELECTRONICS CO., LTD. (Taiwan)


• Urban Crop Solutions (Belgium)


• AeroFarms (U.S.)


• Freight Farms, Inc. (U.S.)


• Plenty Unlimited Inc. (U.S.)


• VertiVegies (Singapore)


• Sky Greens (Singapore)


• iFarm (Finland)

KEY INDUSTRY DEVELOPMENTS:

• March 2024: Vertical Future (VF) partnered with the World Green Economy Organisation (WGEO) to advance shared sustainability objectives. VF's role as a technology-driven advocate for resource-efficient crop production aligns with WGEO's mission to promote a green economy as the optimal path to global prosperity and safety.


• November 2023: Urban Crop Solutions introduced modernized vertical farming technology, Research Indoor Farm Solutions, at the Limburgerhof facility of BASF in Germany. This facility would play a crucial role in fast-tracking several sustainable agricultural plans. The partnership aims to design more operative and environmentally sustainable agricultural solutions.


• June 2023: Freight Farms announced a partnership with Local Line to provide farming businesses with the resources they require to achieve successful businesses. With the collaboration, farmers can make use of Local Line and Freight Farms in tandem to begin a profitable farm business.


• January 2023: ams OSRAM and Energous collaborated to design and develop a wirelessly driven multi-spectral light sensor solution for CEA (controlled-environment agriculture). The combined solution is powered by the multi-channel AS7343 sensor spectral of ams OSRAM and Energous's WattUp PowerBridge.


• August 2022: Urban Crop Solutions announced the launch of a financing program with Siemens Financial Services. Customers with a sound financial track record would benefit from the new program, combined with SFS (Siemens Financial Services). The financing solutions are presently limited to the countries where SFS is active.

REPORT COVERAGE

The study on the market includes prominent areas globally to gain enhanced knowledge of the industry verticals. Moreover, the research offers insights into the most recent endeavors and industry developments and an analysis of high-tech solutions being adopted promptly worldwide. It also highlights some of the growth-stimulating limitations and elements, allowing the reader to obtain a comprehensive understanding of the market.

REPORT SCOPE & SEGMENTATION

ATTRIBUTE	DETAILS
Study Period	2019-2032
Base Year	2023
Estimated Year	2024
Forecast Period	2024-2032
Historical Period	2019-2022
Growth Rate	CAGR of 28.1% from 2024 to 2032
Unit	Value (USD billion)
Segmentation	By Type Hydroponics Aeroponics Aquaponics By Structure Building-Based Vertical Farms Shipping-Container Vertical Farms By Component Lighting System Irrigation and Fertigation System Climate Control Sensors Others (HVAC systems, Shelves and Racks, etc.) By Region North America (By Type, By Structure, By Component, and By Country) U.S. (By Structure) Canada (By Structure) Mexico (By Structure) South America (By Type, By Structure, By Component, and By Country) Brazil (By Structure) Argentina (By Structure) Rest of South America Europe (By Type, By Structure, By Component, and By Country) U.K. (By Structure) Germany (By Structure) France (By Structure) Italy (By Structure) Spain (By Structure) Russia (By Structure) Benelux (By Structure) Nordics (By Structure) Rest of Europe Middle East & Africa (By Type, By Structure, By Component, and By Country) Turkey (By Structure) Israel (By Structure) GCC (By Structure) South Africa (By Structure) North Africa (By Structure) Rest of the Middle East & Africa Asia Pacific (By Type, By Structure, By Component, and By Country) China (By Structure) India (By Structure) Japan (By Structure) South Korea (By Structure) ASEAN (By Structure) Oceania (By Structure) Rest of Asia Pacific