June 21, 2024
Vertical Farming Market

Vertical Farming Market is Trends by Increase in Investment in Vertical Farming Technology

Vertical farming involves growing of crops in vertical stacked layers or vertically inclined surfaces with the help of optimal growing technologies like hydroponics, aeroponics or aquaponics. It is considered more sustainable as it reduces the usage of land and water while allowing year-round production of crops. Vertical farms also allow control over environmental factors like lighting, temperature, and irrigation to optimize crop growth. Important features of vertical farming include automated climate control systems, LED lighting optimized for photosynthesis, water recycling systems and sensor-based monitoring. Vertical farms also provide fresh produce without pesticides or other chemicals and help tackle problems of food insecurity.

The global vertical farming market is estimated to be valued at US$ 16.19 billion in 2024 and is expected to exhibit a CAGR of 4.9% over the forecast period 2024 to 2031.

Growing demand for fresh produce and reduced arable land are key factors driving Vertical Farming Market Growth globally. controlled indoor environment allows consistent production of pesticide-free crops throughout the year to meet rising demand.

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. These players are focusing on developing innovative lighting, irrigation, and sensing solutions to optimize vertical farming systems.

Growing population and rapid urbanization have increased the demand for food globally. Vertical farms help address issues of food insecurity by producing crops closer to points of consumption without impacting arable land. Controlled environment farming techniques also help produce higher yields using lesser resources like land, water, and fertilizers.

Several companies have expanded their vertical farming operations globally over the past few years to cater to rising demand. For instance, BASF opened a new R&D center for vertical farming in Research Triangle Park, North Carolina in 2022. Similarly, Plenty Inc established new indoor vertical farms in Compton, California and Richmond, Canada in 2021 to scale up crop production. Such initiatives are supporting the global expansion of vertical farming industry.

Market Key Trends

Adoption of artificial intelligence and robotics is one of the important trends being witnessed in the vertical farming market. Players are focusing on developing AI-powered farm management systems that can monitor environmental conditions, control equipment functions and offer automated pest & disease detection. This is helping to optimize production processes and maximize crop yields. Additionally, development of low-cost organic LED lighting solutions is also gaining traction as it allows effective lighting customized for photosynthesis at lower power consumption compared to traditional lighting systems. Overall, technological advancements in key farming components are expected to drive the growth of vertical farming market over the coming years.

Porter’s Analysis

Threat of new entrants: The vertical farming industry requires high initial capital investments which act as a barrier to new players.

Bargaining power of buyers: Large buyers can negotiate lower prices due to their purchasing power however technology and expertise requirements limit buyer options.

Bargaining power of suppliers: Specialized machinery and equipment suppliers hold some power over farmers however multiple suppliers in the market alleviate dependence on any single source.

Threat of new substitutes: No close substitutes currently exist for vertical farming which is focused on perishables produced in controlled indoor environments without reliance on external factors like weather.

Competitive rivalry: Though there are a few players, the growth potential of the industry has meant each focuses on expanding their market share through technological innovation.

Geographical regions where market in terms of value is concentrated include Europe and North America due to early adoption and a focus on technology-driven solutions from major players in countries like the United States, Germany, Netherlands and Canada. Indoor vertical farming suits these developed markets with higher labor costs and a need for local year-round produce production.

The fastest growing region for the vertical farming market is expected to be Asia Pacific due to rising population and urbanization in major economies of China and India. As incomes rise and diets shift towards higher value crops, controlled agriculture adopting vertical farming practices can boost production of fruits and vegetables for these densely populated regions facing land constraints. Countries like Singapore and Japan have also led investments for indoor farming research and commercial projects to enhance national food security.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it