Major players of vertical farming industry include Urban Crop Solutions, Aerofarms, Green Spirit Farms, Mirai Co.Ltd, General Hydroponics, Plantagon International AB, American Hydroponics, Sky Greens, and Spread Co. Ltd. Pertaining to the fact that this type of farming involves growing plants beneath LED lights, most of the companies operating in vertical farming market have been signing long-term agreements with Illumitex, Inc., Koninklijke Philips N.V., Everlight Electronics Co. Ltd., and other lighting provider solutions.
The deployment of alternative farming techniques to combat the unavailability of land space will stimulate vertical farming market size. Vertical farming is the latest phenomenon in the agriculture sector and has been gaining renewed popularity with the increasing number of urban spaces and the shortage of cultivable land. It has been observed that this type of farming has reduced transportation costs, allowed farmers to deliver their produce on time without a hitch, and reduced crop spoilage to a considerable extent. Subject to these advantages, vertical farming market size is anticipated to cross a revenue of USD 13 billion by 2024, growing at a CAGR of 27% over 2017-2024, having held a valuation of USD 2 billion in the year 2015.
Vertical farming industry has been establishing its footprint at the top-notch as well as the grass root level. The number of vertical farms have been increasing exponentially across the globe, subject to the numerous advantages of this farming technique, such as disease restriction, water conservation, reduction in the usage of pesticides and herbicides, and elimination of post harvesting processing. Recently, AeroFarms, an indoor agriculture firm, established a facility in upstate New York in 2015. The facility measures almost 70,000 square feet, and is touted to be the world’s largest indoor vertical farm. This farm uses the aeroponics technology to grow kale, bok choy, mustard greens, arugula, red romaine, watercress, and many other salad greens, without sunlight or soil.
While hydroponics is one of the most commonly used technologies, aeroponics has been gaining increasing precedence. This technology saves more than 95% of water as plants are grown in a misty environment. Vertical farming market from aeroponics is slated to grow at a remarkable rate over 2017-2024 subject to its increasing adoption by farmers, urban producers, and land owners, pertaining to the benefits of less chemical usage and cost-effectiveness.
Companies have been undertaking research activities to test how well vertical farming industry can be put on the commercial roadmap. In addition, firms have also been striving to innovate newer and more cost-effective techniques. Vertical farms have been selling their produce to retail stores, supermarkets, restaurants, and in some cases, even directly to consumers, thereby generating lucrative avenues for vertical farming market.
The shortage of cultivable farming land, increasing population levels, and the subsequently high demand for food will propel vertical farming industry share, especially across the Asia Pacific, which is anticipated to be the largest vertical farming market by 2024, with a target revenue estimation of USD 4 billion. Japan is touted to be one of the major contributors toward APAC vertical farming industry, having accounted for more than 25% of the overall share in 2016. Subject to the increasing number of vertical farms in the region, Japan vertical farming market will chart out a lucrative growth graph over 2017-2024. In addition, countries such as India, Singapore, China, South Korea, and Taiwan are also expected to contribute heavily toward the regional growth.
Owing to the shortage of water and lack of space, Middle East vertical farming market is also expected to grow at a substantial rate over 2017-2024. In addition, this region expects to reduce its dependency on food imports, which will contribute heavily to the growth of vertical farming industry.
Vertical farming can be carried out either indoors or outdoors. Outdoor applications held more than 30% of the overall vertical farming market in 2016 and will grow moderately over the next few years, with crops expected to be grown in deserts, skyscrapers, and barren lands. Indoor applications, on the other hand, held the maximum share in 2016 and will grow at a remarkable pace over 2017-2024. Indoor farming includes growing vegetables, fish, and fruits in shipping containers, parking lots, warehouses, and other controlled environments. In fact, indoor farming will account for more than 70% of vertical farming industry by 2024.
North America vertical farming market will grow at a fairly remarkable pace over the next few years, subject to the established research institutes, increasing R&D activities, and strong technology penetration in the field. Speaking of technology, hydroponics accounted for more than 50% of the overall vertical farming industry in 2016 and is expected to grow significantly over the next few years, despite the introduction of newer, advanced technologies.
Prominent products of vertical farming market include fruits, herbs, and vegetables, bell peppers, strawberries, greens, tomatoes, chili peppers, and tomatoes, aquatic species such as trout, crab, tilapia, salmon, and bass, and equipment such as climate controllers, pumps & irrigation systems, sensors, lighting systems, tanks, meters & solutions, and pipes.
Lighting systems are expected to contribute significantly to overall vertical farming industry. Lettuce held around 30% of fruits, vegetables & herbs vertical farming market and is poised to grow further, subject to the increasing demand of the product in healthy salads. Countries such as Singapore, Netherlands, and Germany have a huge demand for crab and tilapia, which will propel vertical farming industry share from aquatic species. The growing hospitality industry will also help propel vertical farming market from aquatic species and fruits, vegetables and herbs.
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Companies across the globe have been investing heavily in research and development activities to devise new techniques and methodologies that will benefit the growth of vertical farming industry. Large-scale laboratories and research institutes have been developing prototype models of the techniques to undertake this type of farming, to know how conveniently and cost-effectively it can be commercialized. Additionally, efforts are being undertaken by farmers and urban producers to enhance crop yield and improve the overall productivity, which is likely to push vertical farming market several notches higher.
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