Vertical farming involves growing crops in stacked layers or vertical modules with control over water, light, temperature and nutrients to maximize yield. This method of farming aims to optimize production in limited spaces while reducing dependency on unpredictable weather conditions and expensive farmland. Vertical farms use various technologies such as climate and soil control, LED lighting systems and IoT-based sensors to remotely monitor crop growth across multilayered modules. The modular and controlled approach allows year-round production of multiple harvests. It also conserves energy and reduces transportation emissions by growing crops closer to their end market. The global Vertical Farming Market is driven by advances in IoT and automation technologies which are enabling more efficient crop cultivation methods and higher productivity.
The Vertical Farming Market is estimated to be valued at US$ 16.19 Mn in 2024 and is expected to exhibit a CAGR of 4.9% over the forecast period 2024 To 2031.
Key Takeaways
– Key players operating in the Vertical Farming are BASF SE, Eastman Chemical Company, Shandong Acid Technology Co. Ltd, Gujarat Narmada Valley Fertilizers & Chemicals Limited, LUXI GROUP, Perstorp Holdings ABPOLIOLI SpA, PT Pupuk Kujang, Rashtriya Chemicals and Fertilizers Limited, and Wuhan Ruisunny Chemical Co. Ltd.
– Growing demand for fresh produce is fueling adoption of vertical farming systems. Consumers are increasingly preferring locally grown pesticide-free produce which can be readily supplied through Vertical Farming Market Size.
– Major players are expanding their presence globally through acquisitions and partnerships to set up vertical farms closer to population centers worldwide. This helps improve supply chain efficiency and meet the rising demand.
Market drivers
– Advances in IoT and sensor technologies are enabling real-time monitoring of critical farming parameters such as soil nutrition, temperature, light and moisture levels. This allows for better control over the farming process and higher productivity through data-driven decision making.
The current geopolitical crisis is impacting vertical farming market growth by exacerbating supply chain issues and inflation. Many countries are facing food security challenges and looking to tap into advanced indoor farming technologies to boost local food production. However, supply of key materials needed for setting up indoor vertical farms, such as LED lights, irrigation systems and sensors, has been disrupted due to trade barriers, regional conflicts and economic sanctions imposed on some nations. This has stalled infrastructure development projects for indoor farming in many parts of the world. Further, rising energy and transportation costs caused by high fuel prices are increasing the operational expenses of indoor vertical farms. The ongoing Russia-Ukraine war and sanctions on Belarus and Russia have severely impacted fertilizer supply and inflated prices globally. This fertilizer crisis is enabling greater adoption of hydroponics and organic fertilizers in indoor farming which do not rely on conventional fertilizers. However, these solutions come at a higher initial cost. Looking ahead, for the vertical farming market to grow sustainably, companies will need to focus on diversifying their supply chains, localizing material production and improving crop varieties to leverage fewer inputs. Adopting renewable energy sources can also help reduce reliance on fossil fuels in indoor farming.
In terms of value, the vertical farming market is currently concentrated in North America and Europe due to higher customer acceptance and greater availability of funding for indoor farming startups and projects in these regions. The USA and Canada are the biggest markets owing to strong government support for innovative agriculture, presence of major indoor farming operators and abundant venture capital funding. Key European countries leading the vertical farming adoption are Netherlands, Germany, France and the UK. However, over the forecast period, the Asia Pacific region is expected to emerge as the fastest growing market for vertical farming. This is because countries like China, India, Japan, Singapore and UAE are proactively investing in indoor farming technologies to meet the growing food demand of their dense populations and overcome constraints of conventional agriculture. The APAC regional market is projected to witness a CAGR exceeding 6% till 2031, much higher than the global CAGR.
The Middle East and Africa present significant growth opportunities for vertical farmers over the coming years. The MEA region has faced several challenges with regard to traditional agriculture such as water scarcity issues and effects of climate change like droughts. Many Gulf countries are therefore implementing indoor farming programs to strengthen their national food security. For example, UAE aims to locally produce over 30% of its fresh produce requirements through vertical farms by 2051 to counter import dependence. Rising urbanization coupled with strong government support will boost the adoption of indoor farming solutions across the Middle East and African nations in the long run.
Get more insights on Vertical Farming Market