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The Vertical Farming Technologies Market size is estimated to grow at a CAGR of 25.14% between 2022 and 2027 and the size of the market is forecast to increase by USD 10,272.26 million. The growth of the market depends on several factors, including the growing focus on reducing labor costs for farming, the growth in investments and funding, and the growing need to meet the rising demand for food products.
This report extensively covers market segmentation by application (hydroponics, aeroponics, and aquaponics), type (shipping container and building-based), and geography (Europe, APAC, North America, South America, and the Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market. Although there has been a disruption in the growth of the market during the COVID-19 pandemic, a holistic analysis of drivers, trends, and challenges will help companies refine marketing strategies to gain a competitive advantage.
The growing need to meet the rising demand for food products is driving growth in a vertical farming technologies market. Innovative horizontal farming technologies provide for the production of a large number of food products that do not rely on favorable meteorological conditions. These smart technologies can be integrated into various systems to provide maximum crop yield and more crop rotations when compared to open-field agriculture and other farming practices. In view of the growth in population, demand for food products is increasing.
Moreover, vertical farming technologies can be used with various farming systems in multi-level designs and provide more area than single-level systems. In return, it helps to increase crop yields and provides an economic activity for end consumers that is very profitable. Hence, the maximum crop yield and minimum overhead offered by vertical farming technologies help meet the growing demand for food products and can influence the growth of the market during the forecast period.
The growing inclination toward technologies that offer water-saving and energy-saving benefits is a primary trend in the vertical farming technologies market. End-users prefer farming technologies, as they're offering different benefits when it comes to the use of water and energy. The use of high-efficiency LED lighting technology in vertical farming ensures minimum power usage for maximum plant growth. In each stage of crop development, the photosynthesis wavelength must be controlled. In order to use low volumes of air, it is also necessary to use high thermal efficiency buildings instead of poly greenhouses.
In addition, vertical farming technologies provide a closed growing system with controlled transpiration losses. The integrated technology is used with agricultural management systems in order to ensure low water consumption. Hence, this trend is expected to drive the growth of the market in focus during the forecast period.
The high initial cost is a major challenge in a vertical farming technologies market. Vertical farming technologies demand that a shelter that is capable of adapting to the climate in the region, as well as artificial light and heating due to climatic changes, be installed on an entire agricultural area. The end-users need to have proper awareness regarding the efficient use of vertical farming technologies.
However, these technologies are highly dependent on external inputs such as electricity, heat, and fuel. Consequently, market growth will be limited in the forecast period as there are no skills requirements and lower maintenance costs related to conventional farming. In some areas where temperature and humidity are high, the operating cost is also high. Hence, the high investment cost associated with vertical farming technologies can affect the growth of the market during the forecast period.
The hydroponics segment will account for a major share of the market's growth during the forecast period. Hydroponics vertical farming is a type of precision farming wherein the plants are grown in mineral nutrient solutions instead of soil. In hydroponic vertical farming, water is the source of production medium. Vertical hydroponic farming technology offers a controlled environment. This technology helps carry out farming operations in lands with poor soil and farms that are affected by recurrent drought and floods.
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The hydroponics segment was valued at USD 1,166.99 million in 2017 and continued to grow until 2021. In areas with poor soils and which are suffering from frequent droughts and floods, technology is helping farmers to operate their farms. The global hydroponics vertical farming technologies market is expected to experience accelerating growth during the forecast period due to the growing end-user inclination toward patented hydroponics systems and the availability of hydroponics with advanced robotics controls.
Aeroponics vertical farming technology is used to grow plants without the use of a growing medium and with only air or mist in the environment. The roots of the plant are hung in a dark chamber, which is constantly misted with nutrients. Aeroponics uses the use of mists, sprayers, foggers, and other devices to create a fine mist that disperses nutrient solution for plant roots. Aeroponics technology is a closed-looped system and provides macro and micro-environments suitable to sustain a reliable, constant air culture. Patented aeroponics vertical farming technology is offered by some of the leading suppliers. The low-water consumption and cost-saving benefits of aeroponics will ensure the growth of the market segment during the forecast period.
Based on the type, the market has been segmented into shipping container and building-based. The shipping container segment will account for the largest share of this segment. The shipping container has emerged as a leading type in the global vertical farming technologies market in 2022. A container is considered the most appropriate choice for vertical farming operations around the world because of its flexibility and modular architecture, as well as improvements in agricultural technology. The shipping container's small size and portability make setup and deployment simple in populated locations, maximizing the use of available space. Due to developments in automated, data analysis and energy efficiency solutions, vertical farming based on containers offers a strong position as an important part of addressing food security challenges and shaping the future of agriculture. Such factors will increase the demand for shipping containers and hence, drive the growth of the market in focus during the forecast period.
The demand for building-based vertical farming technologies is expanding significantly globally. Vertical farming presents a potential remedy to the growing need for efficient and sustainable agriculture methods. Vertical gardens which are placed in buildings, such as warehouses, skyscrapers, or shipping docks, use advanced methods of growing plants including hydroponics, aeroponics, and light-emitting diode lighting systems. To create scalable and affordable solutions, the market in focus has witnessed an increase in investments, technological developments, and collaborations. Urban regions with limited land availability and growing populations are driving demand for localized food production, and building-based vertical farming is gaining popularity.
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Europe is estimated to contribute 34% to the growth by 2027. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period.
The growing demand for fresh fruits and vegetables in Europe will encourage the end-users to adopt vertical farming technologies to enhance the yield. Through the use of light-emitting diode technology, pests that are harmful to crops can be prevented. It's also going to help eliminate the need for pesticides. The vertical technologies market in Europe is expected to witness accelerating growth during the forecast period. Various start-up firms in the region are focusing on raising funds to expand vertical farming facilities in Europe. In the United Kingdom, Ireland, and Italy, the company has a number of ongoing projects. Similarly, Infarm, a Netherlands-based vertical farming start-up, announced in December 2021 that it had raised $200 million from investors and achieved a valuation of more than $1 billion. Such funding can influence the accelerated growth of the vertical farming technologies market in Europe during the forecast period.
In 2020, the COVID-19 pandemic had a negative impact on the regional vertical farming technologies market. However, in H2 2020, due to the availability of vaccines, the number of COVID-19 cases in the region declined, and restrictions were lifted. This, in turn, brought about the recommencement of production and warehouse facilities for vendors. The region experienced an increase in new vertical farms, which fueled the demand for vertical farming technology over the period from 2021 to 2022. This had a positive impact on the growth of the regional market in focus in 2022. These factors will ensure the growth of the regional vertical farming technologies market during the forecast period.
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
4D Bios Inc. - The company offers vertical farming technologies such as Intelligent Plant Factory.
AeroFarms LLC - The company offers vertical farming technologies such as agStack software with integrated Plc and SCADA systems.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market vendors, including:
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies vendors into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Vendors are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The vertical farming technologies market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Vertical Farming Technologies Market Scope |
|
Report Coverage |
Details |
Page number |
153 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 25.14% |
Market growth 2023-2027 |
USD 10,275.26 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
23.35 |
Regional analysis |
Europe, APAC, North America, South America, and Middle East and Africa |
Performing market contribution |
Europe at 34% |
Key countries |
US, Canada, Japan, China, and The Netherlands |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
4D Bios Inc., AeroFarms LLC, Bowery Farming Inc., Eden Green Technology, Freight Farms Inc., Gronska Stadsodling, Grow Pod Solutions, GrowUp Farms Ltd., Hort Americas LLC, IGS Ltd., Indoor Urban Farming GmbH, Koninklijke Philips NV, Plenty Unlimited Inc., SANANBIO, Sky Greens, SPREAD Co. Ltd., Swegreens, Urban Crop Solutions, Vertical Future Ltd., and Vertical Farm Systems Pty Ltd |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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