The Vertical Farming Market is projected to reach USD 7.3 billion by 2025 from USD 2.9 billion in 2020; it is expected to grow at a CAGR of 20.2% during the forecast period.
The growth of the vertical farming market is primarily attributed to high yield and numerous other benefits associated with vertical farming over conventional farming, advancements in light-emitting diode (LED) technology, year-round crop production irrespective of weather conditions, and requirement of minimum resources.
Factors such as positive impacts of adopting vertical farming on the environment, potential market opportunities in APAC and the Middle East, and cannabis cultivation through vertical farming are expected to create growth opportunities for the market.
Hydroponics growth mechanism segment of the vertical farming market projected to grow at the highest CAGR during the forecast period.
The hydroponics growth mechanism is used widely by commercial growers.
This mechanism is easier to set up, costs less than other mechanisms, and has a higher return on investments (ROI). Comparing the investment required to set up a hydroponics and aeroponics facility of the same size, aeroponic requires a high initial investment.
In case of a power outage, in the hydroponic mechanism, the plants can survive for a long time since the growing medium continues to supply water and nutrients, unlike aeroponics, where the plants can die in just a few hours due to malfunctioning or failure of mist spraying nozzles.
Among structure, the building-based vertical farm segment projected to hold a larger share of the vertical farming market during the forecast period.
Building-based vertical farms generate better per square foot revenue than shipping container-based vertical farms, as building-based vertical farms incur lesser capital as well as operating expenses (for same area).
The market for shipping container-based vertical farms is likely to register a higher CAGR as it is a ready-to-use (plug and play model) solution that can help to cater to the rising demand for fresh and high-quality produce. Shipping container-based vertical farms are flexible, easy to operate, and portable.
The vertical farming market in APAC is projected to hold the largest share in 2025.
Companies from other regions are investing in APAC countries to establish vertical farms.
For instance, in 2018, Plenty (US), a vertical farming company, announced its plan of building 300 vertical farms across China.
Vertical farms in the region are also backed by advanced technologies such as LED technology that assists the crops cultivated with photosynthesis by providing the right intensity of light.
Everlight Electronics (Taiwan) is a manufacturer of LEDs for vertical farming.
Vertical farms have also entered into partnerships with agriculture technology providers to enhance the productivity of their farms. Asahi Techno (Japan) uses Illumitex’s (US) LED solutions to enhance the growth process of the crops. Such investments and partnerships are expected to catalyze the growth of the vertical farming market in the region.
Signify (Netherlands), Osram (Germany), Freight Farms (US), AeroFarms (US), Sky Greens (Singapore), Spread Co., Ltd. (Japan), Plenty (US), Valoya (Finland), Everlight Electronics Co., Ltd. (Taiwan), and Heliospectra (Sweden) are a few major players in the vertical farming market.
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