Vertical farming is the process of growing crops in vertically stacked layers or inclined surfaces with the help of hydroponics or aeroponics. It uses various technologies such as climate control, LED lighting, and sensor-based systems to grow crops. Vertical farming provides produce that is fresher, requires less space, uses less water, and helps meet the growing food demand of urban populations. It enables year-round harvesting of crops regardless of seasonal changes. Plant factories utilizing vertical farming technologies make use of less water than field farming as it involves recycling of water and nutrients. There is no use of pesticides and herbicides in vertical farming, thus eliminating the risk of chemical contamination.
The Global 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 of 2024 to 2031.
Key Takeaways
Key players operating in the vertical farming market 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.
The rapidly growing urbanization has increased the Vertical Farming Market Demand for locally grown crops near populated areas which has opened up opportunities for controlled environment agriculture using vertical farming techniques. Technological advancements in LED lighting, hydroponics, and automation have further facilitated year-round production of fruits and vegetables using minimal resources.
Countries across North America, Asia Pacific, and Europe have recognized the benefits of vertical farming in terms of sustainability and increased crop yields. This has resulted in strategic partnerships and joint venture projects between leading vertical farming technology providers and various nations to enhance domestic food security through locally grown fresh foods.
Market drivers
The growing global population and declining arable land are increasing the strain on conventional agriculture to meet the rising demand for food. Vertical farming offers a solution by maximizing crop yields per acre of land used and enabling multilayer farming throughout the year. It significantly enhances space utilization for agriculture while consuming less water and eliminating the use of pesticides, herbicides and fertilizers. The ability of Vertical Farming Market to be located close to urban areas for efficient food distribution is a major market driver for their increasing adoption.
PEST Analysis
Political: Governments around the world are promoting vertical farming as it saves land area. Some governments provide subsidies to encourage commercial vertical farms.
Economic: Vertical farming provides enhanced food security by producing crops locally. It shields farmers from fluctuations in commodity prices and reduces transportation costs.
Social: As populations grow, vertical farming solutions help ensure steady food supply. Younger generations are eco-conscious and prefer locally grown pesticide-free vegetables from vertical farms.
Technological: Advanced lighting, irrigation, and sensor systems help grow crops in vertical towers/benches with precise climate control. IoT-based monitoring aids disease prevention and optimization of growing conditions. Drones, robots assist in operations like seeding, watering and harvesting.
Geographical regions where market in terms of value is concentrated:
The United States and countries in Europe like Netherlands, Germany and United Kingdom currently have the highest concentration of commercial vertical farms. This can be attributed to developed infrastructure, supportive government policies and greater awareness among urban consumers about the environmental benefits of locally grown indoor produce.
Fastest growing region:
The Asia Pacific region is expected to emerge as the fastest growing regional market for vertical farming over the forecast period. Factors like rapid urbanization, rising middle class, shortage of arable land and increasing health consciousness among city dwellers are propelling interest in indoor agriculture across countries like China, Japan and India. Governments in the region are actively promoting R&D initiatives, pilot projects and startups focused on commercial vertical farming.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
