The North American indoor farming market is anticipated to grow at a compound annual growth rate (CAGR) of 6.28% over the forecast period to reach US$7.676 billion by 2029, increasing from US$5.009 billion in 2022.
The North American indoor farming market is growing due to various outlining factors that include, changing consumer preferences, advancement in technology, and adoption of sustainable practices. Indoor farming, or vertical farming., This allows year-round crop production for the farmers, near urban centers, meeting the growing demand for locally grown produce and reducing ed the carbon footprint.
According to USDA, crop area harvested per 1,000 acres in the United States increased from 2,91,429 thousand acres in 2020 to 2,98,863 thousand acres in 2021., The list included crops like corn, sorghum, oats, barley, rye, winter wheat, Durum wheat, rice, soybeans, peanuts, sunflower, cotton, dry edible beans, chickpeas, potatoes, canola, proso millet, and sugarbeets, with harvested acreage for hay, tobacco, and sugarcane, including double cropped acres and unharvested small grains. Additionally, in 2021, the US produced 26.7 million ounces of fresh market strawberries, valued at over $3.42 billion, with an average grower price of $143/hundredweight. This is likely to bring more demand for farming in the North American market.
North America is witnessing a rise in demand for fruits and vegetables with the increasing vegan population. Additionally, health concerns have led to an increase in the consumption of fresh fruits and vegetables, which are pesticide and chemical-free. As per the International Fresh Produce Association, the produce sales increased slightly overall in 2023 (+1.5%), with price (+1.6%) driving the growth in the U.S. Fruit growth (+1.7%) and vegetable growth (+1.2%) were similar.
Circana's household panel data indicates that in 2023, household purchasing habits will reflect this pattern. While the percentage of families purchasing fruits and vegetables remained the same, there was an increase (<1%) in the number of product trips and the amount spent on each trip. Additionally, more than two-thirds of the fresh tomato acreage in the United States is divided between Florida and California.
Moreover, in February 2022, AeroFarms announced a multi-year research partnership with The Foundation for Food & Agriculture Research (FFAR) and the University of Florida to advance the growing of high-value tomatoes indoors. The project, funded by a $2,112,454 grant from the FFAR Precision Indoor Plants Consortium, aims to uncover environmental conditions that can provide vertical farms with a path to growing high-yielding crops that offer consumers a consistently flavorful tomato.
Several factors contribute to the indoor farming sector in the US. For instance, the application of vertical farming, hydroponics, and LED lighting is a technical innovation that has completely recreated farming practices, which include producing high-quality crops in controlled environments. Environmental concerns, for example, climate change and water shortage, influence the need for farmers to use indoor farming because it is a more sustainable alternative to conventional agriculture with less water use and reduced eco effects.
The 2021 USDA report shows that among the fruit and vegetable agricultural businesses, there are around 3,000 that use CEA-type protection. This 2-3% is a significant sector in the US in terms of total crop value. CEA-grown crops are characterized by high-value herbs, leafy greens, microgreens, berries, vine vegetables (like cucumbers, tomatoes, and peppers), flowers, mushrooms, and nursery crops. As per the estimates, more than 2,000 vertical farming operations are present in the US.
Moreover, there is an ever-increasing need for ecological and locally produced food from consumers who are becoming more aware of its benefits and the need to safeguard food security, which is the main factor driving indoor farming growth in the United States. According to USDA National Agricultural Statistics Service surveys (2011 and 2021): Organic retail sales increase percentage throughout the US over the last ten years has been 8% at an average rate. As per the forecasts by the experts, the sales for organic food went beyond $52 billion in 2021 and accounted for 5.5% of the total retail food sales. US farmers and ranchers sold $11 billion worth of organic products in the year 2021, which is an indication of consumers' increased preference for organic food. Overall, technological advancements, ecological issues, and changing consumer preferences are influential in the indoor farming market in the USA, making it a crucial part of the agriculture future.
Expansion ventures by international players into the market are further expected to boost the indoor farming demand in the country. By 2050, according to the UN, the population will grow to nearly 2.3 billion people, with most of them living in cities that are several hundred miles away from the farms they feed on. While mass farming can fail in this role, NASA has a range of projects to stay up-to-date with space science and astronaut nutrition to support it on both Earth and in space. Feeding astronauts during long-term space travel requires extending resources to grow plants in space, which includes reducing water and energy use and removing soil.
NASA pioneered these approaches on the ground by constructing the nation's first vertical farm. Technologists erected rows of hydroponic trays against the walls of a defunct hypobaric chamber that had previously been used to test the Mercury space spacecraft. The lighting, ventilation, and circulating water systems were then added using off-the-shelf components. Various crops were placed on the stacked trays to see how well they would thrive in water, without sunlight or open air. This unique agricultural method laid the groundwork for the controlled environment agriculture (CEA) sector.
| Report Metric | Details |
|---|---|
| Study Period | 2021 to 2031 |
| Historical Data | 2021 to 2024 |
| Base Year | 2025 |
| Forecast Period | 2026 – 2031 |
| Report Metric | Details |
| Market Size Value in 2022 | US$5.009 billion |
| Market Size Value in 2029 | US$7.676 billion |
| Growth Rate | CAGR of 6.28% from 2022 to 2029 |
| Study Period | 2019 to 2029 |
| Historical Data | 2019 to 2022 |
| Base Year | 2023 |
| Forecast Period | 2024 – 2029 |
| Forecast Unit (Value) | USD Billion |
| Segments Covered |
|
| Companies Covered |
|
| Regions Covered | USA, Canada, Mexico |
| Customization Scope | Free report customization with purchase |
North America Indoor Farming Market Segmentation: