PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1064987
PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1064987
Contact us about how to customize the report with add-on data.
The global Vertical Farming market was valued at USD 3,218.7 million in 2020, growing with 24.9% CAGR during the forecast period, 2021-2027.
Vertical farming is a way of preparing food in vertically stacked layers, such as in a skyscraper, a repurposed factory, or a shipping container. Modern vertical farming concepts employ indoor farming methods and controlled-environment agriculture technologies to regulate all environmental conditions. Pollution has significant economic repercussions in terms of health, productivity, health-care expenses, and environmental disturbance; hence, rising concerns about pollution-free environments are propelling the vertical farming industry forwards. Due to the restricted range of crops used in vertical farming, economic viability is hampered, limiting the vertical farming market's growth. The growing use of IoT sensors in agricultural production has created several chances for the vertical farming sector to expand. The increasing cost of maintaining air circulation in vertical farming is posing a significant challenge to the vertical farming industry.
Global population growth and urbanization have raised the need for food, and food security has become a priority for governments throughout the world. Traditional farming is resource-intensive, both in terms of accessible arable area and production volume. Vertical farming is a better alternative to traditional farming since it generates more output while requiring less land, herbicides, and other chemicals. With the reduction in water levels and the severity of the drought crisis, this form of farming has gained favor in recent years. Vertical farming is projected to become a more viable alternative to traditional farming, as it produces 70% more food and consumes nearly 90% less water. Growing urbanization, population growth, diminishing water supplies, and ongoing climate change have all contributed to the scarcity of arable land. According to research by the Economic League Organization, 80 percent of global arable land is currently occupied, and by 2050, an additional 109 million arable hectares would be required to meet rising food demand. Similarly, the globe is on the verge of a water crisis. Water scarcity is projected to grow as a result of future climate change, which will likely have an impact on the food chain. According to the United Nations, by 2050, more than 60% of the world's population would be living in water-stressed areas.
The large initial investment required to put up a vertical farm, as well as the fact that the technologies are still under development, are limiting the market's growth. Furthermore, this approach cannot be used to grow all products and is restricted to tomatoes, lettuces, and green vegetables, limiting the market's expansion. Vertical farming market development is expected to be aided by a decrease in water levels and a rise in government initiatives to support vertical farming throughout the world. In conventional farming, space, light, water, carbon dioxide, and land are all readily available. All of these elements, however, need a supply cost for this form of farming.
Based on the growth mechanism, the global vertical farming market is segmented into hydroponics, aeroponics, and aquaponics. Depending on the structures, the market is categorized as building and shipping containers. On the basis of components, the global market is divided into irrigation systems, lighting, sensor, climate control, building material, and others. By the application, the market is segmented into indoor and outdoor. On the basis of region, the vertical farming market is segmented into North America, Europe, Asia-Pacific, and RoW. In 2020, the hydroponics sector had the largest market share, and this trend is anticipated to continue between 2021 and 2028. Because of its inexpensive installation costs and ease of use, hydroponics is a popular growing method. It is a method of growing plants without soil in which a mineral solution is injected around the plant roots to replace the dirt. Furthermore, the hydroponics approach eliminates the possibility of disease transmission from soil organisms. The demand for hydroponics is likely to rise as people become more aware of the dangers of pesticides. Because the nutrients are controlled better in hydroponically grown plants, they generate a higher yield than identical plants cultivated on the soil.
Key companies have been able to extend their businesses into numerous end-user industries and acquire a competitive advantage as a result of their investments in sophisticated technology. Established market players are investing heavily in start-ups and midsized businesses in order to provide cost-effective solutions. Companies are engaged in various strategies, such as mergers &acquisitions, product launches, partnerships, and joint ventures to gain a greater market share. For Instance, Spring Valley Acquisition Corp., a special-purpose acquisition company, has entered into a merger agreement and plan with AeroFarms, an indoor vertical farming business (SPAC). Aero Farms' equity needs, which include growing retail distribution and market penetration, establishing additional farms, introducing future generations of proprietary farming technology, and entering new product categories, are expected to be fully funded by the newly merged business.
In August 2021, Cargill and AeroFarms, a vertical farming firm, have agreed to collaborate on a multi-year research project to increase cocoa bean yields and develop more climate-resilient agricultural techniques. The firms will also look at ways to improve the flavor and color of the cocoa bean. AeroFarms' competence in controlled environment agriculture will be combined with Cargill's understanding of cocoa agronomy and production methods, which is located in Minneapolis.
The scope of this report covers the market by its major segments, which include as follows: