Vertical Farming Market Size, Share & Trends Report

Vertical Farming Market Size, Share & Trends Analysis Repot By Structure, By Offering (Lighting, Climate Control), By Growing Mechanism (Hydroponics, Aquaponics), By Fruits, Vegetables & Herbs, And Segment Forecasts, 2021 - 2028

  • Published Date: Mar, 2021
  • Base Year for Estimate: 2020
  • Report ID: GVR-1-68038-797-1
  • Format: Electronic (PDF)
  • Historical Data: 2017 - 2019
  • Number of Pages: 120

Report Overview

The global vertical farming market size was valued at USD 3.89 billion in 2020. It is anticipated to expand at a compound annual growth rate (CAGR) of 23.6% over the forecast period. This is attributed 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, policymakers, and suppliers to implement successful marketing strategies.

Canada vertical farming market size, by offering, 2017 - 2028 (USD Million)

Obesity and heart diseases are prevalent, health-related issues among consumers. Furthermore, the growing depletion of groundwater and changing climatic conditions have urged 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 controlled environment agriculture technology, where the facilities use artificial environmental control, control of light, and fertigation.

Increasing demand for high-quality food, independent agriculture technique, and growing urbanization are some of the critical factors responsible for the growth of the vertical farming market. These factors have increased the requirement for food. Demand for food is expected to witness significant growth with a growing population by 2028. The adoption of the vertical cultivation technique allows the consumers to grow crops in a warehouse or a multi-story building.

Offering Insights

The lighting segment led the market and accounted for more than 43% of the global revenue in 2020. The high share of the lighting segment can be attributed to the dependence of vertical farms on artificial lighting. Artificial lights provide sufficient light intensities required for crop growth. The climate control segment is expected to register a high CAGR of around 25% between 2021 and 2028. 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.

Climate control is a kind of agriculture where plants are grown inside a greenhouse under a controlled environment that allows a grower to maintain and monitor the proper supply of light, carbon dioxide, water, humidity, pH levels, and nutrients for crop growth. The main aim of climate control farming is to facilitate the protection and maintain optimum growth conditions throughout the development period of a crop. In many cases, climate-controlled farming is used to ensure that plants receive optimal nutrients for their growth.

Farming with the help of lighting technology ensures 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. Various sensors such as nutrient, humidity, and light sensors are used to monitor crop growth. Monitoring also enables the notification of changes and alerts.

Automation in vertical farming is aiming at minimizing time to market, reducing distribution, production, and environmental costs, and standardizing the high quality. IoT has become the mainstream technology that drives several industries such as transportation, manufacturing, and agriculture. The proliferation of IoT has revolutionized the agriculture industry.

Growing Mechanism Insights

The hydroponics segment registered a market share of more than 54% in 2020 and is expected to remain dominant between 2021 and 2028. Hydroponics is a popular growth mechanism due to low installation costs and ease of operations. It is a method of growing plants without soil, where the soil is replaced by a mineral solution inserted around the plant roots. Additionally, the hydroponics method removes the risk of soil organisms causing diseases. Growing awareness among consumers regarding the effects of pesticides is expected to boost the demand for hydroponics. Hydroponically-grown plants produce a greater yield than similar plants grown in soil because of proper control over the nutrients. Plant roots are submerged under the chemical solution and checked periodically to ensure that appropriate chemical composition is maintained for growth.

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 that becomes nutrient-rich and increases the crop production time. This creates a sustainable natural system, which eliminates the need for chemicals to produce food.

The aeroponics segment is anticipated to witness considerable growth over the forecast period. This system is similar to hydroponics as neither method uses soil to grow plants. However, in aeroponics, there is no need for a growing medium as roots of plants are hung in a dark chamber and sprayed with nutrient-rich solution periodically.

Fruits, Vegetables & Herbs Insights

The tomatoes segment led the market and accounted for more than 23% of the global revenue in 2020. This high share is attributable to the high average demand for tomatoes in all regions compared to other crops such as lettuce, leafy greens, peppers, cucumbers, herbs, and so on. Some of the most commonly grown vegetables, herbs, and fruits across different regions include strawberry, lettuce, bell and chili peppers, tomato, cucumber, and leafy greens among others. One of the important factors behind growing any crop in vertical farming is to validate the economic viability of that crop, which ensures that the company is making a large amount of money from its cultivation.

Similarly, the time taken for crops to grow fully is one of the criteria because some vegetables like lettuce and mint grow fast, whereas herbs and some fruiting crops take more time to grow but can have higher margins than many other plants. As a farmer, it is imperative to make sure that we can sell what we grow, and production costs should not be too high. To make this decision, the kind of crops also plays a very vital role in the feasibility study of vertical farming. Lettuces have shown consistent demand globally that has enhanced its cultivation.

Structure Insights

The shipping container segment dominated the industry in terms of revenue with a market share of 44.2% in 2020 and is expected to remain dominant between 2021 and 2028. This growth is attributed to the ability of the structure to help grow crops irrespective of the geographic location. One of the primary benefits of container-based farming is that container farms are easy to transport, and one doesn’t require a large piece of land or a dedicated building to start cultivating. Moreover, the price of shipping containers decreases with increased competition because the cost of acquiring used containers is relatively less, which allows other companies to enter the market space. However, low comparative output and antagonism between light, heat, and layout are some of the drawbacks of such kind of agriculture.

Global vertical farming market share, by structure, 2020 (%)

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 and it is the fastest-growing segment in terms of revenue owing to its growing acceptance in the region. Building-based farming helps in minimizing the cultivation cost and requires larger farming areas than single farming land, hence ensures food security.

Shipping container-based farming uses 95% less water than the traditional cultivation with drip irrigation. Shipping containers are easy to modify, stackable, durable, and can be recycled and refurbished at a lower cost. Additionally, the surplus availability of unused shipping containers across the globe also likely to influence the segment growth over the forecast period.

Regional Insights

In terms of revenue, Asia Pacific dominated the market for vertical farming in 2020 with a share of approximately 39% and is expected to remain dominant between 2021 and 2028. Growing awareness regarding the importance of alternative farming, owing to less availability of fertile agricultural land and increasing population in the region, is the key factor anticipated to spur the demand.

Europe is anticipated to witness significant growth over the projected period owing to the growing expansion of genetically-modified crop technology. Furthermore, the increasing adoption of nanotechnology and robotics for farming enhances the regional market demand. The use of nanotechnology helps in improving food packaging and enhancing disease and pest control.

The European environment agency has carried out several initiatives to build vertical farms to overcome challenges of continuous population growth and climate change as well as produce food in an environmentally unfriendly way. This has resulted in growth opportunities for the market in the region.

The growing urban population and commercialization of indoor farming are anticipated to drive the demand in Africa. However, a lack of financial resources to build modern vertical farms and limited access to water and land are expected to restrain regional growth. To overcome such challenges, various models followed in the region include vertically stacked wooden crates and sack gardens.

Key Companies & Market Share Insights

These players are involved in strategies such as partnerships, business expansions, new product developments, and contracts to expand their market share. The industry players are investing in R&D for product innovation and enhancement. They are also utilizing the improved database of the customers, products, and processes to achieve the requisite transformation necessary for sustaining in this highly competitive market. The global market is primarily dominated by lighting providers accounting for a majority of the overall market share in 2020. Some of the prominent players in the global vertical farming market are:

  • AeroFarms

  • Freight Farms

  • Green Sense Farms, LLC

  • BrightFarms Inc.

  • Everlight Electronics Co., Ltd.

  • Agrilution Systems GmbH

Vertical Farming Market Report Scope

Report Attribute

Details

Market size value in 2021

USD 4.81 billion

Revenue forecast in 2028

USD 21.15 billion

Growth Rate

CAGR of 23.6% from 2021 to 2028

Base year for estimation

2020

Actual estimates/Historic data

2017 - 2019

Forecast period

2021 - 2028

Quantitative units

Revenue in USD Billion/Million & CAGR from 2020 to 2028

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Structure; offering; growing mechanism; fruits, vegetables, & herbs; region

Regional scope

North America; Europe; Asia Pacific; South America; MEA

Country scope

U.S.; Canada; Mexico; U.K.; Germany; France; Italy; Spain; Japan; China; India; Singapore; South Korea; Brazil

Key companies profiled

AeroFarms; Freight Farm; Green Sense Farms, LLC; BrightFarms Inc.; Everlight Electronics Co., Ltd.; Agrilution Systems GmbH

Customization scope

Free report customization (equivalent to up to 8 analyst’s working days) with purchase. Addition or alteration to country, regional & segment scope.

Pricing and purchase options

Avail customized purchase options to meet your exact research needs. Explore purchase options


Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2028. For this study, Grand View Research has segmented the global vertical farming market report based on structure; offering; growing mechanism; fruits, vegetables, & herbs; and region:

  • Structure Outlook (Revenue, USD Million, 2017 - 2028)

    • Shipping container

    • Building-based

  • Offering Outlook (Revenue, USD Million, 2017 - 2028)

    • Lighting

    • Hydroponic components

    • Climate control

    • Sensors

  • Growing Mechanism Outlook (Revenue, USD Million, 2017 - 2028)

    • Hydroponics

    • Aeroponics

    • Aquaponics

  • Fruits, Vegetables, & Herbs Outlook (Revenue, USD Million, 2017 - 2028)

    • Tomato

    • Lettuce

    • Bell & Chili Peppers

    • Strawberry

    • Cucumber

    • Leafy Greens (excluding Lettuce)

    • Herbs

    • Others

  • Regional Outlook (Revenue, USD Million, 2017 - 2028)

    • North America

      • U.S.

      • Canada

      • Mexico

    • Europe

      • Germany

      • U.K.

      • France

      • Italy

      • Spain

    • Asia Pacific

      • China

      • India

      • Japan

      • Singapore

      • South Korea

    • South America

      • Brazil

    • Middle East and Africa (MEA)

Frequently Asked Questions About This Report

Pricing & Purchase Options

Service Guarantee

  • Insured Buying

    This report has a service guarantee. We stand by our report quality.

  • Confidentiality

    We are in compliance with GDPR & CCPR norms. All interactions are confidential.

  • GDPR.EU
  • Custom research service

    Design an exclusive study to serve your research needs.

  • 24/5 Research support

    Get your queries resolved from an industry expert.

Buy Chapters or Sections

Avail customized purchase options to meet your exact research needs:

  • Buy sections of this report
  • Buy country level reports
  • Request for historical data
  • Request discounts available for Start-Ups & Universities