The Global Vertical Farming Market is estimated to be valued at US$11.55 billion in 2023 and is expected to exhibit a CAGR of 10.30% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Vertical farming involves growing crops in vertically stacked layers, using controlled environment agriculture techniques such as hydroponics, aeroponics, and aquaponics. This method offers several advantages, including efficient use of space, reduced water and fertilizer consumption, and higher crop yields. With the increasing demand for sustainable agriculture solutions, vertical farming has gained significant popularity in recent years. The need for products associated with the vertical farming market is driven by the increasing Global population, urbanization, and limited availability of arable land.
Market Key Trends:
One key trend in the vertical farming market is the adoption of advanced LED lighting systems. LED lighting plays a crucial role in vertical farming as it provides the optimum light spectrum and intensity required for plant growth. LED lights offer several benefits, including energy efficiency, longer lifespan, and the ability to control light wavelengths for specific crops. With the advancements in LED technology, vertical farmers are increasingly adopting LED lighting systems to improve crop yield and quality. Furthermore, these lighting systems can be customized based on plant requirements, creating an ideal growing environment for various crops. This trend is expected to continue driving the growth of the vertical farming market in the coming years.
Porter’s Analysis
Threat of new entrants: The threat of new entrants in the vertical farming market is relatively low. This is due to the high cost of entry barriers such as the need for specialized equipment, technology, and expertise in vertical farming techniques. Additionally, established players in the market have already captured a significant market share, making it difficult for new entrants to compete.
Bargaining power of buyers: The bargaining power of buyers in the vertical farming market is moderate. While buyers have the power to choose between different suppliers, the limited number of key players in the market reduces their bargaining power. Additionally, the unique nature of vertical farming products and services also limits the options available to buyers.
Bargaining power of suppliers: The bargaining power of suppliers in the vertical farming market is moderate. Suppliers of equipment, technology, and other inputs have some leverage due to the specialized nature of these products. However, as the market continues to grow, the demand for these inputs is expected to increase, leading to more competition among suppliers and reducing their bargaining power.
Threat of new substitutes: The threat of new substitutes in the vertical farming market is relatively low. The unique advantages offered by vertical farming, such as year-round production, reduced environmental impact, and improved crop quality, make it a preferred choice over traditional farming methods. Additionally, the increasing demand for locally sourced and organic produce further solidifies the market's position.
Competitive rivalry: The competitive rivalry in the vertical farming market is high. There are several key players in the market, each striving to gain a larger market share. These players compete on factors such as product quality, technology innovation, and pricing strategies. Additionally, the market is characterized by constant technological advancements and research and development activities, further intensifying the competition.
Key Takeaways
The Global Vertical Farming Market Demand is expected to witness high growth, exhibiting a CAGR of 10.30% over the forecast period. This growth can be attributed to the increasing demand for high-quality, locally sourced, and organic produce. Vertical farming offers numerous advantages, including year-round production, reduced water consumption, and minimal environmental impact, which are driving its adoption.
In terms of regional analysis, North America is expected to be the fastest-growing and dominating region in the vertical farming market. This can be attributed to factors such as the increasing focus on sustainable agriculture practices, favorable government initiatives, and the presence of key players in the region. Additionally, the high consumer demand for locally sourced and organic produce is boosting the growth of the vertical farming market in North America.
Key players operating in the vertical farming market include Signify Holding (PHILIPS), Aerofarms, Sky Greens, IGS limited, Everlight Electronics Co., Ltd., Freight Farms, Agrilution, American Hydroponics, Urban Crops Solutions, Vertical Farm System, Gronska stadsodling ab, V-Farm, GrowUp Farms Ltd, Vertical Future Ltd, SweGreen, Jones Food Company, InFarm, Agricool, Future Crops, GrowY, and Intelligent Growth Solutions Limited. These key players are constantly focusing on technological advancements, product innovation, and strategic partnerships to maintain their market position and gain a competitive edge.
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Optimum usage of vertical space & energy utilization, ease in monitoring and harvesting of crops, and limited availability of arable land for carrying out traditional agriculture drive the growth of the global vertical farming market.
On the other hand, rise in urban population and surge in prominence of organic foods create new opportunities in the industry.According to the report, the global vertical farming industry accounted for $2.23 billion in 2018, and is expected to garner $12.77 billion by 2026, registering a CAGR of 24.6% from 2019 to 2026.The building-based vertical farms segment to maintain its dominant position by 2026Based on structure, the building-based vertical farms segment contributed for the highest market share in the global vertical farming market in 2018, accounting for nearly three-fifths of the total share, and is expected to maintain its dominant position during the forecast period.
This is due to rise in urban population, shortage of arable land, and rapid surge in the adoption of novel food production techniques.However, the shipping container based vertical farms segment is expected to grow at the highest rate with a CAGR of 28.1% from 2019 to 2026, owing to less cost and time required for construction as compared to conventional agriculture.
Read Full Article: https://bit.ly/3kUqnFt The hydroponics segment to maintain its lead during the forecast periodBased on growth mechanism, the hydroponics segment held around two-fifths of the total market share of the global vertical farming market in 2018, and will maintain its leadership status during the forecast period.
This is due to increase in prominence owing to its ability to manufacture more nutritious eatables in less space along with reduction of the cost associated with maintenance and labors.Moreover, it can avoid usage of animal excreta that makes this process cleaner.
On the other hand, the aeroponics segment is estimated to register the highest CAGR of 25.6% from 2019 to 2026, owing to reduced waste generation, labor cost, and minimal water requirement for producing fruits and vegetables.
