USA Vertical Farming Market Outlook to 2030

USA Vertical Farming Market Overview

• The USA vertical farming market was valued at USD 3.21 billion in 2023, driven by the increasing demand for sustainable agricultural practices and fresh, locally sourced produce. Vertical farming offers a solution to the challenges of traditional agriculture, such as limited arable land and water scarcity. The growth of urban populations and the rising awareness of food security further propel the market.

• Key players in the USA vertical farming market include AeroFarms, Plenty Unlimited Inc., Bowery Farming, Freight Farms, and Gotham Greens. These companies dominate the market due to their innovative technologies, extensive production facilities, and strong distribution networks that cater to urban populations across the country.
• New York City, San Francisco, and Chicago are dominant cities in the vertical farming market. These cities lead due to their large urban populations, high demand for locally grown produce, and the presence of innovative vertical farming companies. New York City, for example, is home to AeroFarms and Bowery Farming, which have established significant operations within the city. These urban centers also benefit from strong local government support for sustainable food systems
• In 2023, Plenty Unlimited Inc. announced a new partnership with Walmart to supply fresh produce from its vertical farms to stores across the USA. This partnership marks a significant expansion of vertical farming's reach into mainstream retail. Additionally, AeroFarms completed its merger with Spring Valley Acquisition Corp, a move that brought in USD 1.2 billion in capital to expand its operations and develop new vertical farming technologies

USA Vertical Farming Market Segmentation

The USA vertical farming market can be segmented based on several factors:

• By Crop Type: The USA vertical farming market is segmented by crop type into leafy greens, herbs, microgreens, and other crops. In 2023, leafy greens dominated the market. Leafy greens' dominance is driven by their short growth cycle, high yield, and significant consumer demand for fresh, locally sourced salad ingredients.

• By Structure Type: The USA vertical farming market is segmented by structure type into building-based, shipping container-based, and underground-based. In 2023, building-based vertical farms dominated the market, commanding a significant percentage of the market share, driven by their scalability and ability to integrate seamlessly with urban infrastructure.

• By Region: The USA vertical farming market is segmented by region into North, South, East, and West. In 2023, the North region dominated due to its concentration of major vertical farming companies and strong consumer demand for locally grown produce. The region's robust infrastructure and government support for urban agriculture further contribute to its dominance.

USA Vertical Farming Market Competitive Landscape

• Bowery Farming Expands Product Line (2023): In 2023, Bowery Farming expanded its product line to include vertically farmed strawberries, catering to the growing demand for fresh, locally sourced fruits. The strawberries, grown in Bowery's New Jersey facility, are now available in select grocery stores across the Northeast USA.
• Gotham Greens Expands into New Markets (2023): Gotham Greens expanded its operations into new markets in 2023 by opening two new facilities in the Midwest, increasing its production capacity by 30%. These facilities will serve major metropolitan areas, providing fresh produce to local grocery stores and restaurants.

USA Vertical Farming Industry Analysis

USA Vertical Farming Market Growth Drivers

• Rising Consumer Demand for Fresh Produce: The USA vertical farming market is driven by the increasing consumer demand for fresh, pesticide-free produce. Urban populations, particularly in major cities like New York and San Francisco, are prioritizing health and sustainability, leading to higher demand for locally grown vegetables. The farm-to-table movement has further amplified this trend, with consumers seeking fresh produce that is both nutritious and environmentally friendly.
• Technological Advancements in Controlled Environment Agriculture: The market is experiencing significant growth due to advancements in Controlled Environment Agriculture (CEA) technologies, which allow for precise control of environmental factors such as light, temperature, and humidity. These technologies have enabled vertical farms to produce higher yields with fewer resources, making them more competitive with traditional agriculture. The adoption of automation and AI-driven systems has also streamlined operations, reducing labor costs and increasing scalability.
• Increased Corporate Investment in Sustainable Agriculture: Major corporations are investing heavily in vertical farming as part of their sustainability initiatives. Companies like Walmart and Amazon have partnered with vertical farming companies to source fresh produce for their stores, aligning with consumer demand for sustainable and locally grown foods. These investments are driving the growth of the vertical farming market, as they provide the necessary capital for expansion and innovation.

USA Vertical Farming Market Challenges

• Energy Consumption: Vertical farms consume a considerable amount of energy due to the need for artificial lighting and climate control systems. As of 2023, energy costs accounted for up to 50% of the operational expenses for a typical vertical farm. While advances in LED technology have reduced energy consumption, the overall sustainability of vertical farming is still a concern. Balancing energy usage with sustainability goals remains a significant challenge for the industry.
• Limited Crop Variety: The vertical farming market in the USA is primarily focused on leafy greens, herbs, and microgreens, which limits the variety of crops that can be efficiently grown. Crops such as grains, root vegetables, and fruit-bearing plants are more challenging to cultivate in vertical farms due to their size, weight, and specific growing conditions. This limitation restricts the diversity of products that vertical farms can offer, making it difficult for them to compete with traditional agriculture in terms of crop variety.

USA Vertical Farming Market Government Initiatives

• USDA Urban Agriculture and Innovative Production Grants (2023): In 2023, the USDA launched a grant program under the Urban Agriculture and Innovative Production Grants, providing USD 7.5 million to support the development of urban farming projects, including vertical farming. This initiative aims to promote sustainable agriculture practices and improve food security in urban areas by offering financial assistance to urban farmers.
• Government Support for Sustainable Agriculture and Vertical Farming: Government programs focused on sustainable agriculture significantly aid the growth of vertical farming through tax incentives and subsidies that encourage adoption of these practices. These initiatives promote green agriculture, enhancing food security and fostering innovation in the sector. Government support is crucial for the expansion of vertical farming in the U.S., as it provides financial incentives for farmers to embrace this innovative approach to crop production.

USA Vertical Farming Market Future Outlook

The USA vertical farming market is expected to grow significantly by 2028, driven by technological advancements, increased consumer demand for fresh produce, and strong government support for sustainable agriculture. As urban populations continue to rise, the demand for locally sourced, pesticide-free food will increase, further propelling the growth of vertical farming.

Future Market Trends

• Diversification of Crop Offerings: Over the next five years, vertical farms in the USA are expected to diversify their crop offerings beyond leafy greens and herbs. Advances in hydroponics and aeroponics will enable the cultivation of a broader range of crops, including fruits, vegetables, and grains, making vertical farming more competitive with traditional agriculture.
• Integration of Renewable Energy: As the vertical farming industry grows, there will be an increasing focus on integrating renewable energy sources, such as solar and wind power, into vertical farm operations. This shift will help reduce the high energy costs associated with artificial lighting and climate control systems, making vertical farming more sustainable and economically viable. The use of renewable energy will also align with the industry's broader goals of reducing its environmental impact.