Vertical Farming is Estimated to Witness High Growth
Vertical farming is a method of growing crops in vertically stacked layers or inclined surfaces, with the use of indoor farming techniques and controlled-environment agriculture. Vertical farms grow vegetables, herbs and fruits inside tall buildings or repurposed structures. In vertical farming, crops are grown in trays, often stacked horizontally or vertically. This allows optimized land and resource utilization which enables year-round crop production in both urban and rural areas regardless of weather conditions. Vertical farms use various indoor farming techniques such as hydroponics, aeroponics or aquaponics which optimize plant growth with minimal resources and limited space.
The global vertical farming market is estimated to be valued at US$ 14.05 Bn in 2023 and is expected to exhibit a CAGR of 4.9% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
The opportunity of optimized land and resource utilization offered by vertical farming is driving its adoption globally. Due to limited availability of arable land and rising population pressure, vertical farming techniques allow commercial crop production in both urban and rural areas regardless of land availability. Stacked layer farming and controlled environment in vertical farms enable multiple rounds of harvests throughout the year using minimum resources like water, land and fertilizers. This presents a viable solution to the growing demand for food supplies in resource constrained areas. As horizontal land expansion for agriculture is difficult in the future, vertical farms provide an opportunity to optimize existing land usage for commercial crop production. This is expected to significantly drive the growth of vertical farming market over the forecast period.
Porter's Analysis
Threat of new entrants: The vertical farming market requires significant capital investments for establishment of infrastructure like hydroponics, aeroponics, and aquaponics systems limiting the threat of new entrants.
Bargaining power of buyers: The buyers have moderate bargaining power due to availability of produce from traditional farming methods. However, demand for pesticide-free produce year-round increases buyers’ bargaining power.
Bargaining power of suppliers: A few vendors provide components for vertical farming systems concentrating supplier power. Suppliers integrate operations to provide turnkey solutions enhancing their position.
Threat of new substitutes: Vertical farming faces low threat from substitutes as traditional farming is complementary for some produces and controlled environment agriculture provides location independent yields.
Competitive rivalry: The vertical farming market witnesses high competition due to increasing adoption, technological advancements and focus on automation by key players.
SWOT Analysis
Strengths: Higher yields per unit area, no exposure to climate changes or external pollutants, possibility of local production for import substitution.
Weaknesses: Huge infrastructure investments, expertise required for managing micro-climates, dependence on imported plant growth lighting technologies.
Opportunities: Potential to modernize agriculture sector, scope for exporting pesticide-free food, tie-ups with retailers and hotels for steady supply.
Threats: Fluctuations in electricity tariffs, dependency on costly construction materials, susceptibility to technical glitches and control breakdowns.
Key Takeaways
The Global Vertical Farming Market Growth is expected to witness high supported by growing global population, urbanization, and focus on sustainable food production. The global vertical farming market is estimated to be valued at US$ 14.05 Bn in 2023 and is expected to exhibit a CAGR of 4.9% over the forecast period 2023 to 2030.
Regional analysis related content comprises The vertical farming market in North America is one of the fastest growing regions on account of rising organic food demand and supportive policies for controlled environment agriculture from the government. Investments from major players have augmented vertical farming infrastructure expansion across the U.S and Canada.
Key players related content comprises Key players operating in the vertical farming market are BASF SE, Eastman Chemical Company, Shandong Acid Technology Co. Ltd, Gujarat Narmada Valley Fertilizers & Chemicals Limited, LUXI GROUP, Perstorp Holdings ABPOLIOLI SpA, PT Pupuk Kujang, Rashtriya Chemicals and Fertilizers Limited, and Wuhan Ruisunny Chemical Co. Ltd.
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