Global Indoor Farming Market was valued at USD 112.63 billion in 2019, and it is projected to reach USD 131.22 million by 2025, registering a CAGR of 2.5% during the forecast period.
- In 2019, Soil-based indoor farming accounted for a revenue of USD 54.43 billion which is the highest among the various growing type in the market. Its ability to fasten the harvesting cycle of the plants when compared to traditional farming is driving its market growth.
- By Facility type, Indoor Vertical Farm has witnessed the highest CAGR of 4.9% during the forecast period. The increase in demand for sustainable food production in the Middle East countries where achieving this demand is possible by adopting Indoor vertical farming technologies in agriculture.
- North America accounted for the largest market share in 2019. The US is a major contributor to the share in the region, followed by Canada and Mexico.
- The market for indoor farming is highly fragmented with the top players accounting for a minor share and the other small companies capturing the lion's share in the market. Some of the notable players in the market are AeroFarms, Bright Farms Inc., Bowery Inc., FreshBox Farms, Metropolis Farms Inc., Garden Fresh Farms, Village Farms International Inc and others.
Key Market Trends
Increasing Need For Maximizing Crop Yield
One of the main reasons for the diminishing yield is that the cultivable land is shrinking from year to year. The other reasons for lower yield are unfavorable weather conditions, like droughts, floods, soil erosion, and heavy utilization of pesticides, which is decreasing the fertility of the soil, globally. The main reasons for maximizing crop yields are to feed the increasing population and meet the demand for food. High yield of good quality within small regions may be achieved using advanced farming techniques, like indoor farming. An increase in health consciousness and consumption of residue-free food has paved the way for the usage of advanced techniques, like indoor farming. People are growing the necessary crops in their own houses on a small scale, in order to have food that is free from pests and this has resulted in a higher yield. Therefore, the increasing need for maximizing crop yields is expected to drive the indoor farming market in the future.
North America Dominates By Being The Largest Market for Indoor Farming
North America accounted for the largest share in the global indoor farming industry in 2018. With the help of high-efficiency LED lights and enhanced indoor management practices, the US growers have been able to adopt large scale indoor farming and are expected to reduce energy lighting costs by 50%, hence reducing the carbon footprint of controlled environment agriculture. As per the United States Department of Agriculture (USDA), the average yield of conventional lettuce farming doubled by two folds, when cultivated through vertical farming. According to the United Nations Food and Agriculture Organisation, drylands in Mexico occupy approximately 101.5 million hectares of land, thereby thrusting the need for indoor farming practices. Canada has also seen a positive growth trend, contributing significantly to the world exports of hydroponically grown tomatoes. The growth of hydroponics and aeroponics systems in the region is further driving the overall indoor farming market, majorly due to the increasing focus on adopting innovative and efficient technologies to improve the yields.
The market for indoor farming is highly fragmented with the top players accounting for a minor share and the other small companies capturing the major share in the market. Some of the notable players in the market are AeroFarms, Bright Farms Inc., Bowery Inc., FreshBox Farms, Metropolis Farms Inc., Garden Fresh Farms, Village Farms International Inc and others. The most adopted strategies for these companies have been mergers and acquisitions as well as incurring investments for setting up farms globally. For instance, AeroFarms, the aeroponics giant based in the US, included IKEA Group and Momofuku Group for investments worth USD 40 million for its global expansion in 2017.
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