Vertical Farming Market Projected to Reach $59 Billion by 2031

Worker tends to vertical strawberry farm

(Credit: Unsplash)

by | Feb 15, 2024

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The global vertical farming market is expected to reach about $59.1 billion by 2031 with a CAGR of 24.1%, largely due to the system’s efficiency, year-round crop production, and consistent produce quality, according to a new analysis from Straits Research.

Vertical farming includes cultivating crops on shelves or towers, typically in a controlled, indoor setting and using artificial lighting and temperature conditions. The practice has become an increasingly popular alternative to conventional farming, especially as it allows for a farm-to-table system in urban settings, reducing emissions caused by transporting crops.

The market report considers major segments of the global vertical farming market to be hydroponics, aquaponics, and aeroponics. Hydroponics, or growing crops from a nutrient-rich water-based solution, is expected to see the most growth of the three.

Vertical Farming Market Growth Supported by Space-Saving Technologies

By setting up crops vertically, farms take up considerably less space while producing higher crop yields — one of the highest-yielding vertical farms may produce nearly 350 times more crops per square yard than a typical farm, according to Straits Research. This level of productivity in comparison to conventional agriculture is reportedly a major driver of market expansion.

Integration of Internet of Things (IoT) technologies with vertical farms is another cited reason for the industry’s growth. Vertical farms tend to incorporate devices that offer insights into growing conditions, like available natural light, temperature, and soil pH levels. Manufacturers around the world are also working to develop an automated, compact, high-performing vertical farm design, combining the benefits of vertical farming with innovative technologies.

Controlled growing conditions, supported by such technologies, may allow for a wide variety of crops to be grown year-round at a consistent level of quality.

Vertical Farms Meet Demand for Local Produce, Ag Emission Reductions

The continued development of the vertical agriculture industry is also attributed to the global trends of declining LED lighting technology prices and rising consumer demand for fresh, local produce. The need to decarbonize the agricultural sector is another major factor as vertical farming has been found to emit about 70% less carbon compared to open-field agriculture, also using less land and water in the process.

As demand for food is expected to increase by 50% by 2050, conventional agricultural practices run the risk of soil and water depletion, deforestation, and more. Vertical agriculture may conserve these resources and supply fresh food to metropolitan centers promptly without emissions associated with long-distance transportation.

The report found North America’s vertical farming market to be the most significant shareholder in the global vertical farming market, with an expected growth of nearly 29% during the forecast period of 2023 to 2031. Europe is also expected to see a rapidly expanding vertical farming industry, with a projected CAGR of 26.7% in the same forecast period.

The report considers AeroFarms, Plenty Unlimited, Kalera, AppHarvest, Heliospectra, Signify Holding, Osram, Everlight Electronics, Valoya, Sky Greens, Hort Americas, and Spread to be the top players in the vertical farming industry.

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