The Vertical Farming Market is Expected to More than Double by 2026
The Vertical Farming market is expected to grow from USD 3.1 billion in 2021 to USD 9.7 billion by 2026; it is expected to grow at a CAGR of 25.0% during the forecast period. The vertical farming market witnessed a decline in 2020 owing to the spread of COVID-19. The market is seeing a decline due to the closure of multiple SMEs, logistic disruptions, lockdowns, and other problems arising due to the Covid-19 pandemic.
The pandemic has compelled governments worldwide to shift their focus and spending to the health care sector. The demand from end-users also declined significantly during 2020. The market would experience partial recovery by the end of 2021, followed by a growing upward movement in 2022 as markets start recovering. The increasing awareness of hygiene and safety also increases the demand for vertical farming and its products.
Hydroponics growth mechanism Segment to dominate the vertical farming market during the forecast period
Commercial growers worldwide are using the hydroponics growth mechanism. It is easier to set up, costs less than other mechanisms, and has a higher return on investments (ROI). Comparing the investments required to set up a hydroponics and aeroponics facility of the same size, aeroponics requires a higher initial investment. Moreover, the hydroponics mechanism recycles the maximum amount of water with minimal wastage, making it the most water-efficient farming method.
Furthermore, farmers can effectively control the number of nutrients going to plants. Enabling control over the growth process and factors, such as the speed of growth and size of plants. Additionally, in the hydroponics mechanism, in case of a power outage, 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.
Building-based vertical farms Segment to exhibit higher growth during the forecast period
What dominated the vertical farming market is primarily the building-based vertical farms’ segment. That’s as leading companies in the market working in this type of farming. Building-based vertical farms generate better per sq. ft. revenue than shipping container-based vertical farms, as the former uses lesser capital and incurs lower operating expenses (for the same area).
On the contrary, shipping container-based vertical farms are ideal for serving small consumer bases since crops are grown inside containers that require large spaces to set up, making it ineffective and costly to serve a larger consumer base. However, 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 helps cater to the rising demand for fresh and high-quality produce.
Shipping container-based vertical farms are flexible, easy to operate, and portable. Consequently, experts expect the increasing demand for fresh produce to create notable growth. Such as opportunities for this segment in the next few years.
The Asia Pacific to dominate the vertical farming market during the forecast period
In Asia Pacific, the companies involved in vertical farming are investing and expanding their operations in other countries. For instance, Sustenir (Singapore), an agritech company, launched a 30,000 sq. ft. hydroponics vertical farming facility in Tuen Mun, Hong Kong.
Hong Kong is a country with a large population and not much land for farming. The produce from conventional farming is not enough to serve the local demand. Therefore, the country relies highly on importing produce. Similar is the case with Singapore.
This region is working to decrease the dependency on food imports and reduce food wastage in the transportation process. To do so they’re growing a significant amount of food locally, in small spaces. This solution is vertical farming and results in the expansion of farms by companies in this region.