Vertical Farming Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Vertical Farming Market is Segmented by Growth Mechanism (Aeroponics, Hydroponics, and Aquaponics), Structure (Building-based Vertical Farms and Shipping Container-based Vertical Farms), Components (Lighting, Climate Control, Sensors, and Other Hydroponic Components), Crop (Tomato, Berries, Lettuce and Leafy Vegetables, Pepper, Cucumber, Microgreens, and Other Crop Types), and Geography (North America, Europe, Asia-Pacific, South America, and Africa).

Vertical Farming Market Snapshot

 Vertical Farming Market
Study Period: 2016 - 2026
Base Year: 2021
Fastest Growing Market: Asia-Pacific
Largest Market: North America
CAGR: 10.3 %

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Market Overview

The Vertical Farming market was valued at USD 10,600.7 million in 2020, and it is projected to reach USD 18,860.9 million by 2026, registering a CAGR of 10.3% from 2021 to 2026 (2021-2026).

While many industries are contracting because of COVID-19, vertical farming is enhancing their demand. Vertical farming, which has been expanding in urban areas even before the pandemic, is now gaining huge growth as the vertical farms control everything from seed to store. Furthermore, they provide the consumers with information about where their food comes from and how it’s produced. While on the other hand, the incidences of crop rot in fields because of disruptions to farming and supply chains have triggered the growth of vertical farms such as Bowery Farming and Aero Farms due to their quality and productive outputs. The increased demand for organic products among consumers, fueled by the improved standard of living and higher disposable income, has paved the way for the development of vertical farming, wherein organic farming is practiced widely. Microgreens are among the crops cultivated by vertical farming methods and are a rich source of polyphenols, a class of antioxidants that helps to lower the risk of diseases such as heart disease, Alzheimer's disease, diabetes, and certain cancers.​ Many commercial growers are adopting high capital expenditure technologies, such as advanced hydroponic systems and electronic traceability systems. Additionally, growers are heavily investing in LEDs and other innovative lighting products in order to reduce their exposure to associated risks by carefully monitoring and investing in new technologies.Thus, due to the numerous health benefits, there is an increasing demand among health-conscious consumers in the region, which is expected to drive the market in the forecast period.

North America is projected to be the largest and fastest-growing market. Vertical farming is an environment-friendly and profitable technology. It has been promoted by various governments and non-governmental organizations for its benefits in terms of food security. The need for food supply against the explosive population is expected to increase by 2050, which has catalyzed the growth of the vertical farming market. Funds are being invested in the market to bring developments and technological advancements in this specific sector.

Scope of the Report

Vertical farming is an agricultural method through which crops are grown in vertically stacked layers. It is done in a controlled environment using techniques such as aquaponics, hydroponics, and aeroponics that do not make use of soil. The market is studied in terms of end users of vertical farming technology. The report defines the market in terms of the key players, the factors driving the market, and the factors restraining the growth, along with the competition present in the global vertical farming market.​ The market is segmented by growth mechanism (aeroponics, hydroponics, and aquaponics), structure (building-based vertical farms and shipping container-based vertical farms), components (lighting, climate control, sensors, and other hydroponic components), crop (tomato, berries, lettuce and leafy vegetables, pepper, cucumber, microgreens, and other crop types), and geography (North America, Europe, Asia-Pacific, South America, and Africa). The report offers the market sizes and forecasts in value (USD) for all the above segments.

By Growth Mechanism
Aeroponics
Hydroponics
Aquaponics
By Structure
Building-based Vertical Farms
Shipping Container-based Vertical Farms
By Components
Lighting
Climate Control
Sensors
Other Hydroponic Components
By Crops
Tomato
Berries
Lettuce and Leafy Vegetables
Pepper
Cucumber
Microgreens
Other Crop Types
Geography
North America
United States
Canada
Mexico
Rest of North America
Europe
United Kingdom
France
Sweden
Rest of Europe
Asia-Pacific
Singapore
China
Japan
Taiwan
Rest of Asia-Pacific
South America
Brazil
Rest of South America
Africa
South Africa
Rest of Africa

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Key Market Trends

Shrinking Agricultural Land Area

Increasing population trends, urbanization, decreasing water supply, and continuing climate change have contributed to the declining arable land stocks per person. Additionally, the introduction of the Conservation Reserve Program (CRP), the emergence of the biofuel industry, and other economic factors have contributed to significant changes in land-use patterns. Due to such constraints, more production is required from a lesser land area. This is where vertical farming helps in achieving a higher yield of different crops. Due to the continuous decline in per capita farmland availability, a possible way out is the practice of increasing productivity. Thus, there is a need to increase yield from the available land, which can be achieved through vertical farming. Vertical farming, which involves greater use of technology and automation for land-use optimization, exemplifies solutions for improving future food production. Vertical farming aims to significantly increase productivity and reduce environmental footprint within a framework of high-rise urban, indoor, and climate-controlled buildings. According to the United States Department of Agriculture (USDA), farmers in the United States voluntarily removed land from crop production because of poor growing conditions or constrained irrigation water supplies. Gradual declines have occurred in cropland, while grazed forestland has decreased more rapidly. Increases in land used for nonagricultural special uses, which include national parks and other protected areas, have contributed to the relative increase in nonagricultural land use over time while agricultural lands have kept decreasing.

vertical farming market1

North America Dominates the Market

The US market dominated the North American region. Growing concerns toward food security and nutrition are expected to open a number of novel opportunities for the industry to prosper. The United States is anticipated to invest a significant share in facilitating the ecosystem for future foods. As more consumer insights develop toward “fresh-from-farm-to-table”, the availability of freshly harvested vegetables across retail outlets is expected to increase in the country (which is also the pioneer in adopting this concept). The onset of urban population dwellings across cities, such as New York, Chicago, and Milwaukee, has propelled the environment for vertical farming with activities, such as revamping derailed vacant warehouses, derelict buildings, and high rises, which has, in turn, led to an increase in the production of fresh grown foods altogether. In certain potential parts of the country, new aeroponic systems are under construction. For instance, Aerofarms is building a 69,000-square-foot farm in Newark and 2.0 million pounds of leafy greens are expected to be annually produced from this farm. ​Over the past few years, the vertical farming concept has laid its hands across the booming cannabis market, where companies are including alternative options to garner more revenues. According to the March 2020 report by Ontario’s Greenbelt Foundation, there are at least four vertical farms operating in B.C, at least two in Alberta, six in Ontario, and one in Nova Scotia. Major players in the Canadian vertical farm industry are Canada’s Modular Farms, based in Toronto, and Nova Scotia’s TruLeaf, leading the trail followed by startups, such as Ecobain Gardens, which grew from 1300 sq. ft. in 2013 to 6000 sq. ft. in 2018, by engaging the fresh herb mix concept. The main hydroponic systems used in Mexico are the drip irrigation and Nutrient Film Technique system. The maximum number of per acreage hydroponic installations were recorded at Distrito Federal province of Mexico.​ Thus, the expansion of companies to the vertical farming market through increased investment are anticipated to drive the growth of the market studied during the forecast period.

Vertical Farming Market

Competitive Landscape

The market is highly fragmented, with major revenue generating companies which are Aerofarms, InFarm, Jones Food Company, Swegreen, among others, cornering just some part of the market share, while the rest of the market is shared among numerous players such as Sky Greens Pte Ltd, Agricool, Future Crops, V-Farm etc. In the fast-growing vertical farming market, companies are not only competing on the basis of product quality or product promotion but are also focused on other strategic moves to acquire a larger share and expand their acquired market size. Partnerships and collaborations will enable growers to provide year-round supplies, thereby strengthening their positions in the market. The new players entering the indoor vertical farming market can fetch profits by choosing the most profitable crops and using the correct facility systems.

Recent Developments

In April 2021, Swegreen launched the ‘NextGen’ of super-efficient in-store vertical farms in Ica Maxi megastore in Linköping, Sweden. The new vertical farm will be the Scandinavia’s largest in-store cultivation.

In December 2019, AeroFarms started to build a state-of-the-art indoor vertical farm to meet increasing consumer demands for more flavorful produce. It is expected to be one of the largest farms of its kind in the world in Danville, Virginia.​

In December 2018, Agricool raised EUR 25 million to scale its urban farming tech in Paris and Dubai. The company would be able to vertically grow strawberries without pesticides or GMOs and use 90% less water than crops grown in the ground.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 Porter's Five Forces Analysis

      1. 4.4.1 Bargaining Power of Suppliers

      2. 4.4.2 Bargaining Power of Buyers

      3. 4.4.3 Threat of New Entrants

      4. 4.4.4 Threat of Substitutes

      5. 4.4.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Growth Mechanism

      1. 5.1.1 Aeroponics

      2. 5.1.2 Hydroponics

      3. 5.1.3 Aquaponics

    2. 5.2 By Structure

      1. 5.2.1 Building-based Vertical Farms

      2. 5.2.2 Shipping Container-based Vertical Farms

    3. 5.3 By Components

      1. 5.3.1 Lighting

      2. 5.3.2 Climate Control

      3. 5.3.3 Sensors

      4. 5.3.4 Other Hydroponic Components

    4. 5.4 By Crops

      1. 5.4.1 Tomato

      2. 5.4.2 Berries

      3. 5.4.3 Lettuce and Leafy Vegetables

      4. 5.4.4 Pepper

      5. 5.4.5 Cucumber

      6. 5.4.6 Microgreens

      7. 5.4.7 Other Crop Types

    5. 5.5 Geography

      1. 5.5.1 North America

        1. 5.5.1.1 United States

        2. 5.5.1.2 Canada

        3. 5.5.1.3 Mexico

        4. 5.5.1.4 Rest of North America

      2. 5.5.2 Europe

        1. 5.5.2.1 United Kingdom

        2. 5.5.2.2 France

        3. 5.5.2.3 Sweden

        4. 5.5.2.4 Rest of Europe

      3. 5.5.3 Asia-Pacific

        1. 5.5.3.1 Singapore

        2. 5.5.3.2 China

        3. 5.5.3.3 Japan

        4. 5.5.3.4 Taiwan

        5. 5.5.3.5 Rest of Asia-Pacific

      4. 5.5.4 South America

        1. 5.5.4.1 Brazil

        2. 5.5.4.2 Rest of South America

      5. 5.5.5 Africa

        1. 5.5.5.1 South Africa

        2. 5.5.5.2 Rest of Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Most Adopted Strategies

    2. 6.2 Market Share Analysis

    3. 6.3 Company Profiles

      1. 6.3.1 Aerofarms LLC

      2. 6.3.2 Sky Greens

      3. 6.3.3 IGS Limited

      4. 6.3.4 Everlight Electronics Co. Ltd

      5. 6.3.5 Freight Farms

      6. 6.3.6 Agrilution GmbH

      7. 6.3.7 American Hydroponics

      8. 6.3.8 Urban Crops Solutions

      9. 6.3.9 Vertical Farm System

      10. 6.3.10 Gronska Stadsodling ab ​

      11. 6.3.11 V-Farm

      12. 6.3.12 Growup Farms Ltd

      13. 6.3.13 Vertical Future Ltd

      14. 6.3.14 SweGreen

      15. 6.3.15 Jones Food Compnay

      16. 6.3.16 InFarm

      17. 6.3.17 Agricool

      18. 6.3.18 Future Crops

      19. 6.3.19 GrowY

      20. 6.3.20 Intelligent Growth Solutions Limited

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. AN ASSESSMENT OF COVID-19 IMPACT ON THE MARKET

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Frequently Asked Questions

The Vertical Farming Market market is studied from 2016 - 2026.

The Vertical Farming Market is growing at a CAGR of 10.3% over the next 5 years.

Asia-Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2020.

Aerofarms, Infarms, SweGreen, SkyGreens Pte Ltd, Agricool are the major companies operating in Vertical Farming Market.

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