Indoor Farming Market Size, Share & Trends Analysis Report By Component (Hardware, Software, Services), By Facility Type, By Crop Category, By Growing Mechanism, By Region, And Segment Forecasts, 2025 - 2030

Indoor Farming Market Size & Trends

The global indoor farming market size was estimated at USD 42.08 billion in 2024 and is anticipated to grow at a CAGR of 13.5% from 2025 to 2030. Increasing consumer awareness regarding the advantages of consuming fresh and high-quality food is expected to drive the growth of the market. 

The rising population across the globe, especially in emerging economies such as China and India, has led to an increase in food demand, which, in turn, is expected to spur the growth of the market for indoor farming in the forthcoming years.

However, the changing climatic conditions contribute to existing environmental problems, such as soil degradation and groundwater depletion, affecting the food and agriculture production systems. Governments encourage building indoor farms along with other initiatives to overcome this problem, which, in turn, is expected to fuel the growth of the market. Organic foods are perceived as healthier, nutritious, safer, and more eco-friendly. A critical factor that influences the demand for organic food is the food purchasing behavior of consumers, which is essential for producers, policymakers, and suppliers to implement successful marketing strategies.

Indoor farms help grow the total crop yield per unit area by using the stacked layers of potted seeds, thereby driving the market. Indoor farming is the practice of growing plants or crops indoors on a small and large scale. Indoor farming implements methods such as aquaponics and hydroponics and utilizes artificial lighting for adequate light levels and nutrients.

The customization of crop production is also becoming a key growth factor driving the indoor farming industry. Indoor farming allows growers to tailor conditions to specific crops, enabling the cultivation of high-value or specialty products that are otherwise difficult to grow outdoors due to climatic or soil constraints. This includes exotic herbs, microgreens, medicinal plants, and nutrient-rich superfoods that appeal to niche markets and health-conscious consumers, offering higher profit margins to producers.

Furthermore, the proliferation of agritech startups and innovation hubs is accelerating market momentum. These companies are not only developing cutting-edge hardware and software solutions for indoor farming but are also facilitating knowledge sharing and best practices. Collaborations among tech firms, agricultural experts, and investors are creating an ecosystem that supports rapid experimentation and scalability. This innovation-driven environment is expected to foster further breakthroughs, making indoor farming increasingly viable and widespread in the coming years.

Market Concentration & Characteristics

The market growth stage is high, and the pace of growth is accelerating. In the emerging stage, indoor farming technologies and practices are still relatively novel and gaining traction within the agricultural industry. Startups and early-stage companies are pioneering innovative approaches to indoor cultivation, experimenting with different crops, growing methods, and technology applications. Investment in research and development is high, with a focus on refining techniques, optimizing crop yields, and overcoming technical challenges.

The indoor farming market is also characterized by a high level of merger and acquisition (M&A) activity by the leading players. This is due to several factors, including the desire to gain high market share and the need to consolidate in a rapidly growing market.

While indoor farming offers unique advantages such as controlled environments and year-round production, substitutes such as outdoor farming methods may attract consumer attention for growing crops. Traditional outdoor farming remains a primary method for crop cultivation, especially for large-scale production of commodity crops like grains and oilseeds. Outdoor farming relies on natural sunlight, soil, and traditional irrigation methods.

Market concentration plays a pivotal role in the indoor farming market. While there is a diverse range of indoor farming companies operating globally, a handful of major players hold substantial influence and market presence. While the market is characterized by a diverse array of players, market concentration exists among a select group of established companies that lead the industry in innovation, market share, and influence. However, the market remains dynamic, with opportunities for new entrants and disruptive technologies to challenge the dominance of incumbent players.

Component Insights

The hardware segment accounted for the largest market share of over 60.0% in 2024. The segment is further categorized into climate control systems, lighting systems, sensors, and irrigation systems, which enable the cultivation of indoor-grown crops. The climate control system is expected to be the fastest-growing segment during the forecast period, as it creates an environment conducive to plant growth. The system helps control the indoor climate with chillers, heaters, air-conditioning units, humidifiers, and air movement fans, among others.

The software segment is anticipated to grow at the fastest CAGR during the forecast period, owing to the upcoming trends in technologies and farming practices. The software traces the fruit and vegetables back to a grower, crop batch/patch, area of land/field, and supplier details. The segment has been further bifurcated into web-based and cloud-based software. The cloud-based software segment is estimated to register significant growth in the forthcoming years, as it collects millions of data points in real time, which can be examined with machine learning techniques to determine the changes in particular environmental parameters that affect the yield and taste of the final product.

Facility Type Insights

The greenhouses segment dominated the market and accounted for a revenue share of over 71.0% in 2024. Increasing demand for sustainable and controlled agricultural practices is driving greenhouse market growth. As the global population rises and arable land becomes increasingly limited due to urbanization, climate change, and soil degradation, greenhouse farming offers an efficient alternative to traditional open-field agriculture. Greenhouses enable year-round cultivation, protect crops from extreme weather conditions, and allow for better control over factors such as temperature, humidity, and light. This controlled environment leads to higher crop yields, reduced water usage, and more predictable harvests, making greenhouse solutions particularly appealing to commercial growers and governments investing in food security.

The vertical farms segment is expected to register the fastest CAGR from 2025 to 2030, owing to the growing adoption of eco-friendly production of fruits and vegetables. Besides, the changing food purchasing behavior of consumers, resulting in an increasing demand for organic food, is expected to drive the demand. Indoor farming protects crops from intense weather conditions using advanced techniques, such as controlled environment agriculture technology, where the facilities use control of light, artificial environmental monitoring, and fertigation.

Crop Category Insights

The fruits, vegetables, & herbs segment dominated the indoor farming industry and accounted for a revenue share of over 57.0% in 2024. The increasing production of commonly grown fruits, vegetables, and herbs such as tomatoes, lettuce, leafy greens, cucumbers, bell peppers, and chili peppers is driving the segment growth. These crops are grown on a large scale and deliver maximum profit from their cultivation to the companies involved in their production. The tomato segment held the largest market share in 2024, as it is the major cultivated crop, owing to its rapid production rate.

The flowers & ornamentals segment is expected to register a CAGR of 13.0% from 2025 to 2030. The increasing use of flowers and ornamentals for decorative and aesthetic purposes is expected to drive market growth. The segment has been further segregated into perennials, annuals, and ornamentals. Ornamental flowers held the largest market share in 2024, owing to increasing sales.

Growing Mechanism Insights

The hydroponics segment accounted for the largest market share of over 55.0% in 2024. Hydroponics is a popular farming method due to low installation costs and ease of operation. In this process, the soil is replaced by a mineral solution inserted around the plant roots for the growing plant. Hydroponics is promoted as a method to prevent climate change, to lessen environmental harm, and species extinction brought on by overexploitation and intensive farming. Compared to the traditional soil-grown production, hydroponics offers benefits in efficient usage of water, facilitates a micro-climate, requires less labor, needs no soil, and produces higher quality food. Additionally, the hydroponics method eliminates the risk of soil organisms causing diseases. Growing awareness among consumers regarding the effects of pesticides is expected to boost the demand for hydroponics.

The aquaponics segment is anticipated to register a CAGR of 12.5% during the forecast period. Aquaponics is the combination of both hydroponics and aquaculture, which reduces the use of harmful chemicals for cultivation. The minimal water wasted compared to traditional farming is one of the major advantages of aquaponic agriculture. Aquaponics utilizes about 90% less water than conventional farming, despite the name's implication. Further, plants such as cucumbers, tomatoes, peppers, flowers, strawberries, melons, and herbs (mint, basil, wheatgrass, oregano, chives, sage, and parsley) are grown through aquaponics.

Regional Insights 

Europe held the major share of over 31.0% of the indoor farming industry in 2024. The rising adoption of technologies for indoor farms, such as Controlled Environment-Agriculture (CEA), which controls the environmental factors, is responsible for regional growth. Increasing focus on adopting technologies, such as active heat systems and LEDs, to improve the yield is driving the market. The regional government undertakes several initiatives for building indoor farms to overcome challenges, such as a growing population, climate change, and food production in an environmentally unfriendly way. Farm owners are at the forefront of investing in technologies, such as LED lighting and crop monitoring sensors, which are expected to lower labor costs.

The indoor farming industry in the UK is expected to grow during the forecast period.  The UK faces challenges related to limited arable land and changing climate conditions, making traditional outdoor farming less reliable. Indoor farming allows for year-round cultivation in controlled environments, overcoming seasonal limitations and maximizing land use efficiency.

Asia Pacific Indoor Farming Market Trends

The indoor farming industry in Asia Pacific is expected to grow at the highest CAGR of 14.9% from 2025 to 2030. Countries such as China and Japan are estimated to witness considerable growth in the forthcoming years, owing to the presence of many indoor farms. In addition, the continuously rising population in the region has resulted in an increasing demand for organic food, which has led to the building of greenhouses and vertical farms to produce crops. The rising awareness about the significance of alternative farming methods due to the availability of less fertile agricultural land is expected to fuel regional demand further.

The indoor farming industry in India is projected to grow during the forecast period. Concerns about food safety and security have prompted Indian consumers to seek out locally-grown, pesticide-free produce. Indoor farming provides a controlled environment where crops can be grown without the use of harmful chemicals, reducing the risk of contamination and ensuring food safety.

North America Indoor Farming Market Trends

The indoor farming industry in North America is expected to grow at a CAGR of 13.8% from 2025 to 2030. Urbanization and local food movement trends are further accelerating the growth of indoor farming in North America. As more consumers seek fresh, pesticide-free, and locally grown produce, indoor farms located near urban centers provide a sustainable and efficient solution. Cities such as New York, Chicago, and Vancouver have seen a rise in urban farming initiatives that utilize unused buildings and rooftops for food production. This proximity reduces food miles, lowers transportation costs, and enhances product freshness, which are increasingly important to environmentally and health-conscious consumers.

The U.S. indoor farming market is projected to grow during the forecast period. Policy support and government initiatives are also playing a role in boosting the market growth. Various grants, subsidies, and research programs offered by government bodies and agricultural departments in the U.S. are encouraging farmers to adopt controlled environment agriculture. Additionally, indoor farming aligns well with broader sustainability goals, including reducing water usage, minimizing land use, and lowering carbon footprints, making it an optimal area for public investment and regulation-friendly development.

Key Indoor Farming Company Insights

Some prominent players in the market include Argus Control Systems Ltd., Certhon, Richel Group, Netafim, General Hydroponics, Hydrodynamics International, Illumitex, Lumigrow, Signify Holding, and Bowery Inc.

• The Richel Group is a global leader in providing turnkey solutions for greenhouse and agricultural projects. The company specializes in designing, manufacturing, and installing customized greenhouse structures, climate control systems, and irrigation solutions tailored to the specific needs of growers worldwide.

• Netafim is a global company specializing in precision irrigation solutions, pioneering drip irrigation technology to help farmers achieve higher crop yields while conserving water and resources. The company has expanded its operations worldwide, providing innovative irrigation systems and services to farmers in over 110 countries.

Plenty Unlimited Inc. and Bowery Farming Inc. are some of the emerging participants in the indoor farming market.

• Bowery Farming Inc. is an upcoming indoor farming company that specializes in vertical farming. The company utilizes proprietary technology and data-driven insights to grow a wide variety of leafy greens and herbs in controlled indoor environments.

• Plenty Unlimited Inc. is an upcoming indoor farming company that leverages vertical farming techniques to grow fresh produce sustainably and efficiently. Plenty aims to address the challenges of traditional agriculture by producing high-quality fruits and vegetables in controlled indoor environments..

Recent Developments

• In October 2024, Netafim partnered with Phytech LTD to enhance smart irrigation solutions. This collaboration will utilize Netafim’s robust distribution and service network to deliver real-time insights into field irrigation performance and offer data-driven recommendations to shared customers. By integrating the advanced control and automation features of GrowSphere, the partnership enables more precise and responsive irrigation tailored to the unique needs of each crop. This includes the early detection of issues such as water and fertilizer waste or low pressure, which can lead to system inefficiencies and increased operational costs.

• In June 2023, Certhon partnered with Living Greens Farm to enhance and expand the company’s innovative aeroponic growing technology on a global scale. As the only Controlled Environment Agriculture grower utilizing this method at scale, Living Greens Farm is setting a new benchmark in sustainable food production. Through this collaboration, Certhon will bring the advanced growing system to markets beyond North America.

• In January 2023, Priva announced a strategic partnership with Aranet. The partnership aimed to serve the growing demand for more and new greenhouse sensors to generate data. This partnership will bridge the gap between wireless sensor platforms and other data sources in greenhouses.

• In May 2022, Signify Holding announced the acquisition of Fluence. The acquisition will aid Signify in offering indoor farming lighting solutions that help Signify's position in the North American horticulture lighting market.

Indoor Farming Market Report Scope

Global Indoor Farming Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the indoor farming market report based on component, facility type, crop category, growing mechanism, and region:

• Component Outlook (Revenue, USD Million, 2018 - 2030)

  • Hardware

    • Climate Control Systems

    • Lighting Systems

    • Sensors

    • Irrigation Systems

  • Software

    • Web-Based

    • Cloud-Based

  • Services

    • System Integration & Consulting

    • Managed Services

    • Assisted Professional Services

• Facility Type Outlook (Revenue, USD Million, 2018 - 2030)

  • Greenhouses

  • Vertical Farms

    • Shipping Container

    • Building-based

  • Others

• Crop Category Outlook (Revenue, USD Million, 2018 - 2030)

  • Fruits, Vegetables, & Herbs

    • Tomato

    • Lettuce

    • Bell & Chili Peppers

    • Strawberry

    • Cucumber

    • Leafy Greens

    • Herbs

    • Others

  • Flowers & Ornamentals

    • Perennials

    • Annuals

    • Ornamentals

  • Others

• Growing Mechanism Outlook (Revenue, USD Million, 2018 - 2030)

  • Aeroponics

  • Hydroponics

  • Aquaponics

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • UK

    • France

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

    • Australia

  • Latin America

    • Brazil

  • Middle East & Africa

    • UAE

    • Saudi Arabia

    • South Africa