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 on hygiene and safety also increases the demand for vertical farming and its products.
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Lighting systems and hydroponic components accounted for the largest share in hardware segment of the vertical farming market in 2020.
Lighting and hydroponic components are among major hardware systems required for vertical farming setup. Artificial light acts as a substitute for sunlight and provides sufficient light intensities that enable crop growth. The amount and duration of the light are the main aspects considered while providing lighting for plants. Lights either provide a light spectrum such as the sun or a spectrum that caters to the needs of the plants. Outdoor lighting conditions can be created with varying colors, temperatures, and spectral outputs from the grow lights as well as by varying the intensity of outputs of the lamps. In recent times, LEDs and high-intensity discharge (HID) are the most preferred grow lights in vertical farming. Fluorescent (FL) bulbs are also used for indoor applications, as their fixtures are similar to those of HID bulbs but are less expensive.
Based on growth mechanism, hydroponics segment likely to dominate vertical farming market by 2026
Hydroponics segment is expected to keep its dominance during the forecast period mainly due to simple installation and cost-effective vertical farm setup. In the hydroponics system, mineral nutrients dissolved in water are fed directly to the plant’s roots due to which the plant grows mostly upward, thereby promoting quicker growth, faster harvest, and higher yield. Hydroponics systems are used both indoors and outdoors for growing herbs, foliage, and food items throughout the year using an inert growth medium to anchor the plant’s roots. One of the major advantages of using this mechanism is less water requirement as the system reuses the water. Furthermore, the nutrition levels can be entirely controlled, resulting in lower nutrition costs and stable and high yields.
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, in November 2019, Sustenir (Singapore), an agritech company, launched a 30,000 sq. ft. hydroponics vertical farming facility in Tuen Mun, Hong Kong. Hong Kong is a densely populated country with limited availability of land for farming. The produce from conventional farming is not enough to serve the local demand, and hence the country relies highly on imported produce. Similar is the case with Singapore. To decrease the dependency on imported food and reduce food wastage in the transportation process, growing a significant amount of food locally, in limited space, is the solution offered by vertical farming, resulting in the expansion of farms by companies in this region.
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The report profiles key players in the vertical farming market and analyzes their market shares. Players profiled in this report are Signify (Netherlands), Osram (Germany), Freight Farms (US), AeroFarms (US), sky Greens (Singapore), Spread (Japan), Plenty (US), Valoya (Finland), Everlight Electronics (Taiwan), Heliospectra AB (Sweden), Green Sense Farms (US), Agrilution (Germany), American Hydroponics (US), Urban Crop solutions (Belgium), Vertical Farm Systems (Australia), bowery Farming (US), Agricool (France), Sananbio (US), Growpod Solutions (US), Infarm (Germany), Altius Farms (US), Intelligent Growth Solutions (Scotland), 4D BIOS INC (US), Future Crops (Netherlands), Bright Farms (US), Swegreen (Sweden), and Vertical Future Ltd (UK).