The global vertical farming market size was valued at USD 1.15 billion in 2015, owing to the growing adoption of environment-friendly production of fruits and vegetables. The unprecedented growth of the global population has increased the demand for urban agriculture. Vertical farming is the practice of producing food in a vertically stacked layer such as a used warehouse, skyscraper, or shipping container.
Organic foods are perceived as healthier, nutritious, safer, and more environmentally friendly. A critical factor that influences the demand for organic food is the food purchasing behavior of consumers, which is essential for producers, policy makers, and suppliers to implement successful marketing strategies.
Canada vertical farming market, by offering, 2014 - 2025 (USD Million)
Obesity and heart diseases are the prevalent, health-related issues among consumers. Furthermore, the growing depletion of ground water and changing climatic conditions have urged the traditional growers to adopt alternate farming methods. Increasing consumer concerns toward health and the abovementioned factors are likely to elevate the industry demand.
Unlike traditional farming, indoor farming can produce crops throughout the year, which results in increased productivity. Furthermore, indoor farming can protect crops from extreme weather conditions through the usage of techniques such as the controlled environment agriculture technology, where the facilities use artificial environmental control, control of light, and fertigation.
Based on structures, the industry has been classified into building-based and shipping container. The shipping container segment dominated the industry in terms of revenue in 2015 and is expected remain dominant over the forecast period. This growth is attributed to the ability of the structure to help grow crops irrespective of the geographic location.
Factors such as growing technological advancements and increasing penetration of precision farming are anticipated to drive the shipping container segment over the forecast period. The building-based segment is widely accepted in Japan, China, and other Asian countries.
The shipping container based farming uses 95% less water than the traditional farming with drip irrigation. Shipping containers are easy to modify, stackable, durable, and can be recycled and refurbished at a lower cost. Additionally, surplus availability of unused shipping containers across the globe also likely to influence the segment growth over the forecast period.
Based on offerings, the market has been segmented into lighting, hydroponic components, climate control, and sensors. The climate control segment is expected to witness a high growth rate over the projected period. The increasing adoption of hydroponic components by farmers to minimize the weight load and infrastructure needed to support the equipment is anticipated to drive the demand for hydroponic components.
Farming with the help of lighting technology ensures a consistent plant growth by reducing the heat stress on the root zone and providing uniform lighting. The use of LED lighting technology acts as a supplementary light source to the sun and ensures increased productivity with minimum power usage.
Sensors enable the comprehensive monitoring of the external environment and crop condition. A various sensor such as nutrient sensor, humidity sensor, and light sensor are used to monitor the crop growth of the crops. Monitoring also enables notifications of changes and alerts.
Automation in vertical farming is aiming at minimizing time to market, reducing distribution, production, & environment costs, and standardizing the high quality. IoT has become the mainstream technology that drive the several industries such as transportation, manufacturing, agriculture, and others. The proliferation of IoT has revolutionized the agriculture industry.
Growing Mechanism Insights
Based on growing mechanisms, the market has been segmented into hydroponics, aeroponics, and aquaponics. The hydroponics growing mechanism dominated the segment in 2015 and is expected to remain dominant over the forecast period. Hydroponic farming is a method of growing plants without soil, where the soil is replaced by a mineral solution inserted around the plant roots.
Global Vertical farming market, by structure, 2015 (%)
Additionally, the hydroponics method removes the risk of soil organisms causing diseases. The growing awareness among consumers regarding the effects of pesticides is expected to boost the demand for hydroponics segment. The aquaponics segment is anticipated to gain a significant market share over the forecast period.
Aquaponics is the integration of hydroponics and aquaculture, which eliminates the need for harmful chemicals for cultivation. Plants such as lettuce, chives, peppers, kale, mint, cucumbers, and peas are grown through aquaponics. The water used in the aquaponics systems contains fish waste which becomes nutrient-rich and increases the crop production time. This creates a sustainable natural system which eliminates the need for chemicals to produce food.
Aeroponics segment is anticipated to witness considerable growth over the forecast period. This system is similar to the hydroponics as neither method uses soil to grow plants. However, in aeroponics, there is no need for growing medium as roots of plants are hung in a dark chamber and sprayed with nutrient-rich solution periodically.
In terms of revenue, the Asia Pacific region dominated the industry in 2015 and is expected to remain dominant over the forecast period. Growing awareness regarding the importance of alternative farming, owing to the less availability of fertile agricultural land and increasing population, are the key factors anticipated to spur the industry demand.
Europe regional market is anticipated have significant growth over the projected period owing to the growing expansion of genetically-modified crop technology. Furthermore, increasing adoption of nanotechnology and robotics for farming further enhances the regional market demand. The use of nanotechnology helps in improving food packaging and enhancing disease and pest control.
The European environmental agency has carried out several initiatives to build vertical farms for the purpose of overcoming challenges of continuous population growth and climate change as well as producing food in an environment-unfriendly way. This has resulted in the rising demand for market in the region.
Growing urban population and commercialization of indoor farming is anticipated to drive the African regional demand. However, lack of financial resources to build modern vertical farms and limited access to water and land is expected to restrain the Africa regional growth. To overcome such challenges various models followed in the region include vertically stacked wooden crates and sack gardens.
A few of the major industry players include AeroFarms (U.S.), Illumitex, Inc. (U.S.), and American Hydroponics (U.S.). These players are involved in strategies such as partnerships, business expansions, new product developments, and contracts to expand their market share.
Base year for estimation
Actual estimates/Historical data
2014 - 2016
2017 - 2025
Revenue in USD Million & CAGR from 2017 to 2025
North America, Europe, Asia Pacific, South America, and MEA
U.S., Canada, Mexico, UK, Germany, France, Japan, China, India, and Brazil
Revenue forecast, company share, competitive landscape, growth factors, and trends
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Segments Covered in the Report
This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest trends and opportunities in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global vertical farming market based on structure, offering, growing mechanism, and region:
Structure Outlook (Revenue, USD Million; 2014 - 2025)
Offering Outlook (Revenue, USD Million; 2014 - 2025)
Growing Mechanism Outlook (Revenue, USD Million; 2014 - 2025)
Regional Outlook (Revenue, USD Million; 2014 - 2025)
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