The global indoor farming market size is estimated to reach USD 75.3 billion by 2028, exhibiting a CAGR of 10.9% from 2021 to 2028
The increasing demand for food owing to the rising population is expected to drive the growth. Factors such as declining water supply, urbanization, and climate change have contributed to the loss of arable land. This in turn is driving demand for indoor farms to produce food.
The challenges, such as rising global temperature and extreme weather conditions, act as a barrier in the traditional farming technique. The European Environment Agency (EEA) has carried out several initiatives to build vertical farms to overcome these challenges and produce food in an environment-friendly way.
Indoor farming increases the crop yield and reduces the farming impact on the environment by reducing the distance traveled in the supply chain. It reduces the need for the land space required to grow plants compared to traditional farming methods by using growing shelves mounted vertically.
Rising consumer awareness regarding the consumption of healthy and fresh food is anticipated to positively influence the growth of the market for indoor farming over the forecast period. Furthermore, the use of technology, such as LED indoor farming to create nature-like conditions will help farmers meet the expected demand for food supply in near future.
Europe dominated the market in 2020 and is anticipated to remain dominant over the coming years, owing to the continuous adoption of advanced technologies such as LED lighting, controlled environment agriculture.
Asia Pacific is expected to exhibit the fastest CAGR from 2021 to 2028, owing to the increasing indoor farms in countries such as China and Japan. Increasing adoption of greenhouses and vertical farms is projected to bode well for regional growth.
In addition, the rising demand for pesticide-free, fresh vegetables and fruits is expected to fuel the regional market growth.
Indoor Farming Market Report Highlights
The greenhouses segment dominated the market in terms of revenue in 2020 as these facilities produce higher yields. Greenhouses offer a stable and highly controlled environment for the cultivation of flowers, vegetables, and fruits.
The fruits, vegetables, and herbs segment is estimated to register the fastest CAGR over the forecast period, owing to the increasing food consumption along with growing consumer awareness regarding the importance of healthy eating, especially in regions such as Europe and Asia Pacific.
The climate control systems segment is projected to expand at the highest CAGR during the forecast period, as the crop development can be controlled by adjusting and monitoring the concentration of minerals.
Some of the key players operating in the market include LumiGrow (U.S.), Illumitex (U.S.), Hydrodynamics International (U.S.), and Agrilution (Germany).