Vertical Farming Produce Market Growth & Trends
The global vertical farming produce market size is anticipated to reach USD 6.46 billion by 2027, expanding at a CAGR of 25.7% from 2020 to 2027, according to a new report by Grand View Research, Inc. Increasing demand for fresh organic vegetables, the emergence of state-of-the-art agriculture techniques, and growing urbanization are critical factors responsible for market growth. The global farmland area has decreased owing to rapid urbanization across the globe. Degradation of soil quality is another reason for the emergence of alternative farming techniques, such as aquaponics, hydroponics, and aeroponics.
The increasing use of such cultivation techniques by the vertical farmers is expected to boost the demand for fresh produce from vertical farms over the forecast period. However, high initial investments in vertical farms and lack of adoption from top agricultural output countries, such as Russia, India, Brazil, and Ukraine, are some of the restraining factors in the market.
According to the World Bank Group, the global arable land per capita has declined from 0.197 hectares in 2013 to 0.192 hectares in 2016. The scarcity of arable land owing to land degradation has urged the farmers to adopt new solutions to produce fresh food. Thus, many farmers have shifted to the modern indoor cultivation methods, wherein the crops are stacked in layers inside buildings, shipping containers, and warehouses. Such indoor vertical farms enable the expansion of the total plantation area using the stacked layers of potted seeds. Furthermore, as the crops are grown in a contained environment, farmers can grow various vegetables that cannot be grown outside due to unfavorable conditions, which are anticipated to drive the market growth in regions such as the Middle East and Africa.
North America dominated the market for vertical farming produce in 2019 with a revenue share of more than 33% and is estimated to continue leading over the forecast period. The emerging presence of numerous vertical farming companies in the U.S., such as AeroFarms, Bowery Farming Inc., and Gotham Greens is the major growth driver. These companies provide various types of fresh produce, including leafy greens such as head lettuce, romaine lettuce, arugula, spinach, kale, and other crops such as tomatoes and cucumbers, peppers, basil, and so on. The Middle East market is estimated to witness a high CAGR on account of regional expansions from established players and new vertical farm projects in the region. Companies, such as AeroFarms, Madar Farms, and Badia Farms, are actively investing in existing and new facilities to cater to the rising regional demand for vertical farm produce.
Additionally, the investments and financing from various investors are expected to be a notable factor for the emergence and expansion of market players. The report provides insights into the emerging vertical farming market in Saudi Arabia and the UAE. The report also includes notable financing and investment data for prominent market players.
Vertical Farming Produce Market Report Highlights
- Amidst the coronavirus pandemic, the use of eCommerce platforms to order fresh vegetables is drastically increasing across the globe, which boosts the sales of vertically grown crops
- The increasing demand for food that is free from soil and pesticide contamination is a critical factor driving the demand for vertically grown crops
- The integration of IoT in various devices and equipment, including sensors, monitoring devices, irrigation controls, and climate controls, has improved the vertical farms’ operating excellence
- The hydroponics segment held a significant market share in 2019. It is anticipated to maintain its stronghold till 2027 due to the ease of hydroponic farm setup and growing preference for container-based hydroponic farms
- Lettuce and other leafy vegetables combined have accounted for more than 50% of the market revenue share among overall Vegetables in 2019 (Including leafy greens, tomatoes, cucumber, and peppers)
- The lettuce segment is anticipated to exhibit the highest CAGR from 2020 to 2027 owing to the significant demand for fresh and high-quality head and romaine lettuce from consumers
- North America dominated the global market and accounted for over 33% of revenue in 2019 and is expected to maintain its dominance from 2020 to 2027
- Emerging economies, such as Singapore and China, are expected to drive the growth of the Asia Pacific regional market owing to the emergence of new vertical farms