Vertical Farming Technologies Market by Application, Types and Geography - Forecast and Analysis 2023-2027

Vertical Farming Technologies Market Forecast 2023-2027

The Vertical Farming Technologies Market size is forecast to increase by USD 10.28 billion, at a CAGR of 25.14% between 2022 and 2027. Market growth hinges on various factors, such as the increasing emphasis on minimizing farming labor costs, escalating investments and funding, and the imperative to satisfy the surging demand for food products. These dynamics underscore the need for innovative approaches and technologies within the agricultural sector. As stakeholders prioritize efficiency and productivity, the market is expected to expand, driven by the convergence of these forces driving change in the agricultural landscape.

What will be the size of the Market During the Forecast Period?

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Market Segmentation by Application, Type, and Geography 

The global vertical farming market is experiencing significant growth driven by innovative technologies and sustainable agricultural practices. Companies like Aerofarm and BrightFarms are leading the way with advancements in artificial intelligence (AI), big data analytics, and the Internet of Things (IoT). Vertical farming utilizes farming land efficiently, making use of both new buildings and abandoned buildings for indoor cultivation. With drip irrigation systems and cloud technology, water usage is optimized, addressing concerns related to water scarcity. This approach also enables the production of organic food and specialized crops like cannabis in regions like Benelux and the Nordics. Furthermore, farming fosters the growth of agri-tech startups and contributes to mitigating challenges associated with diminishing arable land.

Application Segment Analysis: 

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 agriculture 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 agriculture 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 1.17 billion in 2017 and continued to grow until 2021. In areas with poor soils and that are suffering from frequent droughts and floods, technology is helping farmers to operate their farms. The global hydroponics 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.

Type Segment Analysis: 

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 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 agriculture 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 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 agriculture is gaining popularity.

Regional Analysis

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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 end-users to adopt vertical agriculture 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. 

Additionally, 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 several ongoing projects. Similarly, Infarm, a Netherlands-based vertical agriculture start-up, announced in December 2021 that it had raised USD 200 million from investors and achieved a valuation of more than USD 1 billion. Such funding can influence the accelerated growth of the market in Europe during the forecast period.

Market Segmentation 

This market growth and forecasting 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.

Market Dynamics and Customer Landscape

The market is experiencing rapid growth, driven by advancements in technology such as Artificial Intelligence, Big Data Analytics, and the Internet of Things (IoT). These innovations enable precise monitoring and management of crops in indoor vertical farms, maximizing productivity and resource efficiency. Vertical agriculture addresses challenges such as water scarcity and the need for arable land, making it an attractive solution for sustainable agriculture. However, challenges remain, including high initial investment costs, limited scalability, and regulatory hurdles. Despite these challenges, the market is expected to continue expanding, especially with the emergence of agri-tech startups and the adoption of cloud technology. 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. A holistic analysis of drivers, trends, and challenges will help companies refine marketing strategies to gain a competitive advantage.    

Key Market Driver

The growing need to meet the rising demand for food products is driving growth in the market. Innovative vertical 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 agriculture practices. In view of the growth in population, demand for food products is increasing.

Moreover, such 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 standing agriculture technologies help meet the growing demand for food products and can influence the growth of the market during the forecast period.

Significant Market Trends

The growing inclination toward technologies that offer water-saving and energy-saving benefits is a primary trend in the market. End-users prefer farming technologies, as they offer different benefits when it comes to the use of water and energy. The use of high-efficiency LED lighting technology in steep agriculture 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.

Major Market Challenge

The high initial cost is a major challenge in a 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 such 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 such agricultural technologies can affect the growth of the market during the forecast period.

Who are the Major Market Companies?

Companies 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 companies, including:

• 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.
• Vertical Farm Systems Pty Ltd

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. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.  

Segment Overview

The market research and growth 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. 

• Application Outlook 
  • Hydroponics
  • Aeroponics
  • Aquaponics

• Type Outlook 
  • Shipping container
  • Building-based

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Argentina

Market Analyst Overview

The market is addressing pressing global issues such as the water crisis and hunger through innovative solutions. Utilizing methods like hydroponic crops and aeroponics segments, vertical farming ensures efficient use of resources while enhancing food safety. Advanced features like LED lights, climate control, and automation technologies optimize growth conditions, mitigating concerns such as soil erosion and limited crop varieties. With vertically stacked shelves and precise irrigation and fertigation systems, crops thrive regardless of external factors like rain or climate change. Additionally, ongoing research and development activities continuously improve these technologies, overcoming challenges like crop failure and financial constraints associated with traditional farming methods. As a result, vertical farming emerges as a sustainable solution for the future of agriculture.

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 10.28 billion
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 Companies, Market Positioning of Companies, 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 growth analysis, Market forecasting, 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 market 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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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the market in focus on the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market across Europe, APAC, North America, South America, and the Middle East and Africa
• A thorough analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive analysis of factors that will challenge the growth of market companies. 

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