The vertical farming market is projected to witness a CAGR of 19.85% during the forecast period to reach a total market size of US$10.563 billion by 2025, increasing from US$3.564 billion in 2019. Vertical farming is the urban agricultural practice of growing food crops in vertical stacked layers, vertically inclined surfaces, or integrated in other structures. Growing demand for pesticide-free food products owing to the rising health concerns and increasing population is facilitating investment in the research and development of modern agriculture methods. Vertical farming is practised in a closed environment, which makes it easier to monitor pests and diseases. Mounting demand for food to feed the public will boost the demand for vertical farming as it is feasible to produce fruits and vegetables around the year by providing the plant with suitable temperature, nutrition, and light among other factors.
The rising global population, urbanization and an increased demand for organic products are some of the key factors driving the market growth. The close proximity to the point of end consumption and reduced dependence on water and other natural resources is further expected to boost the market growth. Furthermore, various government initiatives are being taken to promote the adoption of vertical farming practices globally. However, the high initial cost and the limited range of products that can be manufactured using vertical farming method are the major challenges that the market is expected to face during the forecast period.
Increasing demand for organic food products is boosting the demand for vertical farming solutions
Vertical farming is a revolutionary approach in agricultural practices which has enabled the production of high quantities of nutritious and quality fresh food and does not involve the use of pesticides and fungicides. Recently, the growing health issues among people globally has shifted consumer’s attention towards changing their lifestyle patterns and food habits. Thus, the resultant increase in consumer awareness regarding the health hazards of chemically produced fruits and vegetables has led to an increased demand for pesticide free food, which has further led to a rise in adoption of organic farming practices, which is a major factor driving the growth of vertical farming market globally. In vertical farming, hydroponic and aeroponics, are the two main production process encompassing the use of nutrient rich solutions to feed the plant. As per International Federation of Organic Agriculture Movements (IFOAM) in Europe, the organic retail sales in 2016 accounted to €30.7 billion with 12% annual growth rate of organic retail sales whereas the percentage of organic land accounted to only 6.7%. Thus, the growing organic market due to the higher demand for organically produced products will further increase the adoption of vertical farming methods.
Growth mechanism is an important aspect of vertical farming
By growth mechanism, the vertical market is segmented into aeroponics, hydroponics, and aquaponics. These are the modern agriculture systems that utilize nutrient rich water than soil for plant nourishment. Moreover, it does not require fertile land to effective which is further fueling its adoption. The use of hydroponic is increasing because of growing investment and its ability to increase crop yields without releasing nutrition pollution into the environment. Similarly, less water, fertilizer, and pesticide usage in aeroponics growth mechanism is increasingly gaining popularity which is driving its adoption while relatively low maintenance of aquaponics system is fueling its growth.
North America remains a key market for vertical farming solutions, while Asia Pacific region will witness fastest growth over the forecast period
By geography, the vertical farming market is segmented as North America, South America, Europe, Middle East and Africa, and the Asia Pacific. North America held a significant market share owing to the presence of well-established companies and rapid adoption of advanced technology. Increasing investment by major market players due to rising popularity regarding the efficacy of vertical farming will boost the demand for vertical farming solutions. The Asia Pacific (APAC) region is projected to witness substantial growth in the coming years. Rising demand for organic food products and increasing population are the major factors driving the demand for vertical farming solutions in the APAC region over the forecast period.
Key players profiled in the report are Agrilution GmbH, Aerofarms, Hort Americas, Illumitex, Bright Agrotech, Everlight, Koninklijke Philips N.V, Sky Greens, Modular Farms, and Suncore among others.
Vertical farming market has been segmented as below:
· By Type
· By Component
· By Mechanism
· By Geography
· North America
· South America
· United Kingdom
· Middle East and Africa
· Saudi Arabia
· South Africa
· Asia Pacific
· South Korea