USD 6.88 billion
Report ID:
SQMIG45I2097 |
Region:
Global |
Published Date: June, 2024
Pages:
197
|Tables:
60
|Figures:
75
Global Vertical Farming Market size was valued at USD 6.88 billion in 2022 and is poised to grow from USD 8.27 billion in 2023 to USD 36.04 billion by 2031, growing at a CAGR of 20.2% in the forecast period (2024-2031).
The use of IoT sensors for crop production is expected to drive market demand. The data gathered from these sensors is stored and analyzed on the cloud to optimize farm management. Automation in agriculture, coupled with big data and predictive analytics, will further boost the market. Vertical farming is an effective technique for ensuring stability in crop production, especially under unfavorable climatic conditions. It offers several advantages over traditional farming methods, such as less water usage, reduced need for agrochemicals, and lower dependence on agricultural labor. Vertical farming utilizes metal reflectors and artificial lighting to maximize natural sunlight. The government supports and initiatives also further drive the growth of the market. Based on the SkyQuest analysis, The US Department of Agriculture granted $7.5 million through its office of urban agriculture and innovation production. This will support the development of urban agriculture and innovative production projects. Furthermore, consumers' growing concerns about genetically modified organisms and the environmental and health effects of pesticides have led to an increased demand for organic foods. Organic product handlers and growers must comply with regulations under the Organic Foods Production Act of 1990. The rising urbanization, deforestation, and climate change are further propelling the market growth as these provide solutions to produce food in a limited space. Artificial lighting can extend the hours of natural daylight, leading to healthier plants and increased yields. High-pressure sodium and LED lighting are popular choices, with LED lighting systems expected to grow significantly in the future. Hydroponic systems eliminate the need for pesticides and artificial ripening agents, resulting in nutritious vegetables. However, high initial investment and limited crop variety remain potential market restraints.
Global Market Size
USD 6.88 billion
Largest Segment
Hydroponics
Fastest Growth
Aeroponics
Growth Rate
20.2% CAGR
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The global vertical farming market is segmented into Growth Mechanism, Structure, Crop Type, Offering, and Region. Based on Growth Mechanism, the market is segmented into Hydroponics, Aeroponics, and Aquaponics. Based on Structure, the market is segmented into Building-based Vertical Farms, and Shipping Container-based Vertical Farm. Based on Crop Type, the market is segmented into Vegetables, and Fruits. Based on Offering, the market is segmented into Hardware (Lighting {Lighting Fixtures, Lighting Control}, Hydroponic Components, Climate Control, Sensors), Software, and Services. Based on region, the market is segmented into North America, Europe, Asia-Pacific, Middle East and Africa, and Latin America.
Analysis by Growth Mechanism
Hydroponics is the largest segment by growth mechanism in the vertical farming market. This is due to its relatively lower setup costs, ease of operation, and wider availability of technology compared to aeroponics. Hydroponics systems also require less maintenance and are easier to scale up. Hydroponics growth mechanism provides food production throughout the year unaffected by environmental conditions. Hence, it is a popular choice for commercial vertical farming operations.
On the other hand, aeroponics is the fastest-growing growth mechanism in the vertical farming market. It has a higher yield potential than hydroponics and uses significantly less water. Aeroponics also requires less space compared to hydroponics, making it more suitable for vertical farming operations. Although the setup cost for aeroponics is higher than hydroponics, the potential return on investment is higher due to the higher yields.
Analysis by Structure
The largest segment in the global vertical farming market by structure is building based vertical farms. These building based vertical structures are versatile in nature that is can be established in any location regardless of the harsh climatic or weather conditions. Therefore, these methods can be applied or suitable for countries which face difficulties due to the factors like deserts or urban landscapes. These help in maximizing the usage of resources like water, space, and energy thus, can produce a higher yield within a smaller area.
On the other hand, the shipping container based vertical farm segment is the fastest growing segment by structure in the vertical farming market. These require lower initial investment for setting up the forms which is driving their growth. This can be installed and transported in different locations like urban areas or remote regions which provides a scalable solution for local food production therefore driving their expansion. Furthermore, the rising demand for sustainable agricultural practices is also fuelling the demand of shipping container based vertical farming.
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North America is the largest region in the vertical farming market and held the maximum share in 2023. The presence of major vertical forms in US and Canada contributes towards its dominance. Additionally, the continuous adoption of advanced and automated technologies across the farms helps in growing of the pesticide free and year-round production of different crops in the region. Furthermore, the region has a well-established distribution network which makes it easier to transport crops. The major players such as John Deere, AGCO, and others in this region are contributing towards the growth of the market.
On the other hand, the Asia-Pacific region is the fastest growing region in the vertical farming market. Due to the large population in this region, there is a rising demand for food which is contributing towards the market growth. The continuously growing urbanization is leading to words the production of high value crops such as fruits, vegetables and others. The middle-class sector is also continuously growing which is also driving the region's growth. China and India for the major players in this region driving the market during the forecasted period.
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Vertical Farming Market Drivers
Increasing Demand for Food Driving the Market Growth
The increasing global population is driving the demand for food therefore contributing towards the growth of the global vertical farming market. It helps in crop production in limited space which leads to its expansion in the urban space. The rising awareness regarding sustainable practices is also contributing to the growth. It uses less water usage, efficient use of space, and less dependence on labour.
Advancements in Technology Drives the Growth of the Market
The advanced IoT sensors and artificial lighting are the key advancements making vertical farming more accessible therefore driving market growth. It helps in the growth of the plants indoors leading towards its widespread adoption. LED lighting helps in the vertical farms by applying controlled growing and nutrition systems without the use of sunlight and rain.
Restraints
High Initial Investment Hindering the Market Growth
Due to the rise of vertical farming, there is a significant opportunity for sustainable agriculture. This leads to a significant barrier for in advanced investments in the farming practices. For the establishment of the vertical farming systems, it requires upfront expenses related to infrastructure, and technology and equipment. The construction of vertical farming structures requires climate control systems, and efficient LED lighting management, therefore negotiate financial commitment.
Substantial Energy consumption for maintaining Indoor Environments
The vertical farming methods depend on the artificial lighting and climate control systems for maintaining natural conditions for the plant growth. This contributes towards the high usage of electricity through LED lights and HVAC systems which results in the increased operational costs. This dependence on the continuous energy supply limits the market growth.
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The market is competitive and includes large and small players in the industry. The entry of new players contributes to intensifying the competition. The government initiatives are contributing towards research and development which improves efficiency and sustainability of vertical farming processes.
Vertical Farming Market Top Player’s Company Profiles
Vertical Farming Market Recent Developments
In June 2024, Saudi Arabia ministry of environment launches urban vertical farms with food markets and stores. Their aim is to provide the customers with fresh food products.
In December 2023, Conad, Italian supermarket chain partnered with Zero and launched a new line of salads by using vertical forming technology.
In September 2023, Veganz Group and VeGreat LLC formed a joint venture and announced the launch of OrbiFarm and will apply vertical farming platform technologies, OrbitPlan and OrbiLoop in Dubai.
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Co-relates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
According to the SkyQuest’s analysis, the rise in the demand for food and sustainable farming practices are driving the global vertical farming market. The advancements in technology including robotic harvesting and vertical conveyor systems are further supporting the growth. Hydroponics segment is having the highest share whereas the aeroponic segment is growing quickly. North America is having the highest market share whereas Asia-Pacific is growing at a quick pace. One major trend is the rising adoption of the sustainable farming practices people are shifting towards ecofriendly options. Due to high initial investment costs, and less crop variety, the market is facing different challenges. Despite this, the market will grow in the coming years due to increasing demand for fresh and locally grown food products and the rising adoption of technology.
Report Metric | Details |
---|---|
Market size value in 2022 | USD 6.88 billion |
Market size value in 2031 | USD 36.04 billion |
Growth Rate | 20.2% |
Base year | 2023 |
Forecast period | 2024-2031 |
Forecast Unit (Value) | USD Billion |
Segments covered |
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Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
Companies covered |
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Executive Summary
Market overview
Parent Market Analysis
Market overview
Market size
KEY MARKET INSIGHTS
COVID IMPACT
MARKET DYNAMICS & OUTLOOK
Market Size by Region
KEY COMPANY PROFILES
For the Vertical Farming Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Vertical Farming Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Vertical Farming Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Vertical Farming Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
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Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
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Report ID: SQMIG45I2097