The vertical farming market is projected to reach USD 10.53 billion by 2027 from USD 2.9 billion in 2020; it is expected to grow at a CAGR of 20.2 % during the forecast period. Major drivers for the growth of the market are 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.
Light-emitting diodes (LEDs) are now affordable and efficient enough to cut the overall farming cost for the growers. The innovations in LED technology in recent years are consequently supporting the growth of the vertical farming market. Artificial lighting is a pre-requisite for indoor farming structures. The price of LEDs dropped significantly in the recent past, with increased efficiency and long lifespan. This has resulted in higher return on investments (ROIs) for growers and has helped to increase the number of installations of vertical farms with profitable produce. LED top lighting and underlighting systems are widely accepted over other technologies by the horticulture growers as they are available with full-spectrum and can be used for diverse crop growth mechanisms.
Vertical farming often involves the use of advanced solutions such as cameras, sensors, automated systems, artificial intelligence, and hydroponic, aquaponics, or aeroponic systems. To operate these advanced systems, knowledgeable and skilled workforce is essential. Maintenance of machines and computers too requires people who are technically well-trained and equipped with all upgrading know-how. Lack of skilled workforce has affected different sectors at a global level, and vertical farming is not an exception. Also, most of the farmers venture into this market with their systems, which are not efficient in terms of design and are costly. To sustain and remain competitive in the market, vertical farms need to be up-to-date in different aspects of farming.
The cannabis industry is growing rapidly post legalizing medical and recreational cannabis by many states in the US. As the demand for cannabis is increasing rapidly, the supply side has started to develop operations in different forms to meet the ends. As per the current production scenario, growing cannabis in a vertical farm can be an expensive operation to carry out. Cannabis grown under sunless medium needs to have various factors considered. For instance, the heat emitted from high-pressure sodium lights (HPS) can damage the produce. Hence, LEDs, which run at much lower temperatures, can be a solution to the excessive heat emitted. Companies growing cannabis through vertical farming have observed significant results in terms of productivity.
Aerofarms (US), Urban Crop (Belgium), Illumitex, Inc. (US), Sky Greens (Singapore), Koninklijke Philips N.V. (Netherlands), Everlight Electronics Co., Ltd. (Taiwan), Green Sense Farms, LLC (US), Agrilution (Germany), American Hydroponics (US), and Vertical Farm Systems (Australia) are some of the key players in the global vertical farming market.
In APAC, the companies involved in vertical farming are investing and expanding their operations in other countries. For instance, in November 2019, Sustenir (Singapore), an Agri-tech company, launched a 30,000 square foot hydroponic vertical farming facility in TuenMun, Hong Kong. Hong Kong is a densely populated country with limited availability of land for farming. The produce from conventional farming is not enough to serve the local demand, and hence the country highly relies on imported produce. Similar is the case with other countries such as Singapore. In order to decrease the dependency on imported food and reduce the food waste in the transportation process, growing a significant amount of food locally in limited space is the solution offered by vertical farming, resulting in the expansion of farms by companies in this region.
Report : Vertical Farming Market - By Growth Mechanism (Hydroponics, Aeroponics, Aquaponics), By Structure (Building-Based Vertical Farms, Shipping Container Vertical Farms), By Offering (Hardware, Software and Services) And Region (North America, Asia Pacific, Europe, Middle East & Africa and Latin America) - Industry Analysis, Opportunity and Forecast 2020 To 2027