Global Vertical Farming Market Outlook to 2030

Global Vertical Farming Market Overview

• Global Vertical Farming market reached USD 7 billion in 2023. The growth is primarily driven by increasing demand for fresh, locally produced, and pesticide-free food, coupled with advancements in technology such as LED lighting and hydroponic systems.

• Major players in market include Signify, Heliospectra, Pipp Horticulture among others. These companies are leading the market with innovative farming techniques and substantial investments in R&D.
• In 2023, Heliospectra has introduced an updated version of their lighting control software, helioCORE 2.0. It aims to optimize energy savings and plant growth, potentially reducing energy consumption by up to 35% beyond the existing savings from using LED technology.

Global Vertical Farming Current Market Analysis

• North America as the most dominant region: North America leads the global vertical farming market due to advanced technology, significant investments, and a push for sustainable food solutions. Notably, Plenty Unlimited Inc. is investing $400 million in a San Francisco indoor farm, using AI robots to manage environmental conditions. With CEA systems optimizing temperature, humidity, and lighting, vertical farms ensure year-round production.The USDA's $7.4 million investment in 2023 for urban agriculture grants further supports this growth, highlighting the region's commitment to innovation and sustainability in agriculture.
• Europe as the emerging region: Europe, with a population of 741 million and 73% urbanization, is also advancing in vertical farming. The UKs $6.4 million funding competition, part of the Farming Innovation Investor Partnership Competition, blends grant with private investment to boost agricultural research. Additionally, the European Union's Horizon Europe program allocates substantial funds for sustainable agriculture technologies, fostering innovation in vertical farming across the continent. These initiatives are pivotal in enhancing Europe's capabilities in sustainable food production.
• USA as the Fastest Growing Region: The U.S. is a global leader in agricultural technology with over 2,000 vertical farms as of 2024. Walmart's $400 million investment in Plenty, aimed at supplying its stores with leafy greens, underscores the sector's growth. In 2022, the USDAs $14.2 million in 52 grants advanced urban agriculture, promoting access to nutritious foods and community engagement. Additionally, state-level initiatives and private sector innovations further drive the expansion of vertical farming, solidifying the U.S. position in the market.

Global Vertical Farming Market Segmentation

The Global Vertical Farming Market can be segmented based on several factors:

By Mechanism: Global Vertical Farming Market is segmented by mechanism into Hydroponics, Aquaponics and Aeroponic. In 2023, market is dominated by hydroponics sub-segment, which holds the largest share by value. Hydroponics allows for precise control over the growing environment, including temperature, humidity, light, and nutrients. This leads to higher quality and more consistent crops.

By Structure Type: Global Vertical Farming Market is segmented by structure type into shipping containers & building based. In 2023, the market segmentation by raw materials shows shipping containers as the dominant sub-segment in terms of value. Shipping containers are widely available and relatively inexpensive, making them a cost-effective option for setting up vertical farms. The modular nature of containers allows for scalable operations, enabling farms to start small and expand as needed.

By Type of Green Produce: Global Vertical Farming is segmented by green produce is into Leafy Green, Herbs and Fruits & Vegetables. In 2023, leafy green produce dominated by value. Leafy greens dominate due to their fast growth cycle, high demand, and suitability for vertical farming environments, offering efficient space utilization and quick turnover for urban markets.

Global Vertical Farming Market Competitive Landscape

• Bright Farms Partnership: In 2023, BrightFarms has entered an exclusive licensing agreement with Element Farms to distribute indoor-grown spinach under the BrightFarms brand throughout the Northeast. This partnership aims to meet the increasing consumer demand for high-quality, locally grown produce.
• Kalera & Growy Holdings: In 2023, Kalera's international operations were sold to Growy Holdings, allowing the company to focus solely on its US market. This strategic shift is expected to enhance its financial position and operational focus, particularly in the lucrative US fresh produce market.
• Bowery Farmings New Smart Farm: In 2022, Bowery Farming, the nation's largest vertical farming company, has recently opened its largest and most technologically advanced smart farm in Bethlehem, Pennsylvania. The farm has a comprehensive water transpiration system to recapture water from plants, with the goal of reclaiming nearly all of the water used in the growing process.

Global Vertical Farming Industry Analysis

Global Vertical Farming Market Growth Drivers:

• Decreasing Availability of Agricultural Land: The U.S. is experiencing a decline in agricultural land. From 2015 to 2022, the U.S. lost about 1.9 million acres of farmland in 2022 alone, contributing to a total decrease of approximately 12.39 million acres since 2015. Vertical farming, which can produce 10 times more yield per acre than traditional farming, offers a viable solution by maximizing space usage and enhancing food production efficiency.
• Urbanization and Population Growth: In 2023, United States population was at 339 million and 80% of the population lives in urban areas. Vertical farming can help meet this demand, reducing food transportation costs and lowering carbon emissions.
• Evolving Cannabis Legalization Landscape: With 38 U.S. states legalizing medical cannabis, the demand for controlled cultivation methods has surged. Vertical farming offers precise environmental control, essential for producing cannabis with specific pharmacological traits. This method can reduce water usage and increase yield per square foot, making it a preferred choice for medical cannabis cultivation.

Global Vertical Farming Market Challenges:

• High Initial Investments: The cost of setting up vertical farming is between $60,000 to $120,000 depending on the technology used. This includes the cost of building the vertical farm infrastructure, installing the necessary technology for climate control, lighting, and irrigation, and the operational costs associated with energy consumption.
• Energy and Resources Management: Managing energy usage while maintaining optimal growing conditions can be difficult, especially in regions with high energy prices. Managing these systems to maintain the right balance between energy usage and crop productivity can be challenging, especially in regions where energy costs are high.

Global Vertical Farming Future Market Outlook

By 2029, the vertical farming market is projected to reach USD 24 billion. future growth is expected to be driven by advancements in automation, AI, and IoT technologies, which will enhance efficiency and yield. Additionally, increasing investments in vertical farming by both private and public sectors, particularly in urban areas, will further propel market growth.

Future Market Trends

• Expansion into Staple Crops: In the next five years, vertical farming is expected to expand beyond leafy greens and herbs to include staple crops such as potatoes and tomatoes. Advances in technology and farming techniques will make it economically feasible to grow these crops indoors.
• Integration with Smart City Infrastructure: Vertical farming will increasingly be integrated into smart city infrastructures, providing fresh produce directly to urban residents. This integration will include the use of IoT devices and data analytics to optimize growing conditions and distribution networks.