Indoor Farming Technology Market - Forecasts from 2022 to 2027

Indoor Farming Technology Market - Forecasts from 2022 to 2027

The global indoor farming technology market is anticipated to reach US$38.932 billion by 2027 from US$19.764 billion in 2020 with a CAGR of 10.17%. Indoor farming is a way of cultivating plants and crops exclusively indoors. It frequently uses hydroponics and artificial lighting, where growing conditions can be better controlled, to offer plants a sufficient amount of nutrients and light levels they require for growth. Plants of all kinds can be cultivated inside, although the most common are fruits, vegetables, and herbs. Rising awareness about the consumption of residue-free food has cleared the pathway for innovative techniques such as indoor farming.

Increasing agriculture production using less water and land resources

According to Forbes, By 2050, the world's population is expected to reach 9.7 billion, requiring a 70 percent increase in global food production in the next 30 years to feed everyone. Agriculture needs to adapt to use less water and pesticides, make crops less vulnerable to climate change, and meanwhile provide more consistent yields. When compared to outside farming, indoor farms recirculate and reuse water, requiring 95 percent less water to cultivate the same crops. The average production of standard lettuce farming doubled when cultivated vertically, according to the US Department of Agriculture. The transpiration process happens when plants or commodities are cultivated in vertical greenhouses, allowing farmers to reuse the water for irrigation. Greater production from less area is necessary, and indoor farming aids in a higher yield of various crops. As arable land becomes scarcer, the growing demand to maximize crop yields will drive the indoor farming business in the projected period.

The initial expense is high

Indoor farming is a costly enterprise, locating suitable facilities to selecting the best-performing crops necessitates a significant investment. In addition, both greenhouses and vertical farms have a greater percentage of running expenditures due to the high use of electricity. For an optimal indoor farm, controlling the ambient atmosphere with adequate temperature, lighting, and pollination as well as the plant arrangement is crucial. Land prices alone, which are typically highly expensive in urban areas, considerably boost the initial upfront costs. Equipment prices placed further strain on the budget of many vertical farming enterprises. Climate controls, LED lights, computers, shelving units, water lines, and other pricey equipment are required by most indoor farms.

Key Developments

In November 2021, NASA Research debuted a new phase of indoor farming. This new agricultural approach paved the way for the controlled environment agriculture (CEA) industry. Aerofarms formed a partnership with Hortifrut SA in April 2021. R&D of blueberry and cranberry production in fully controlled vertical farms and indoor environs will be the focus of the partnership. BrightFarms established the newest indoor farm in Hendersonville in May 2021. The lettuce grown in the 6-acre greenhouse will yield 2 million pounds each year. Bright Farms also added three sustainable greenhouse farms to Massachusetts, North Carolina, and New York in 2019.

By growing systems, the global indoor farming technology market can be segmented into soil-based, aeroponics, hybrid, hydroponics, and aquaponics categories, respectively. Hydroponics is expected to account for a significant share of the market owing to advantages such as the low cost of water because the water remains in the system and may be reused and the elimination of the need for soil. Aeroponics is expected to grow at a high CAGR in the projected period.

By component, the global indoor farming technology market can be segmented into software, hardware, and services. Over the estimation period, the hardware category is expected to have the biggest market share and develop quickly in the indoor farming technology market.

By facility type, the global indoor farming technology market can be segmented into indoor deep water culture systems, indoor vertical farms, container farms, and poly or glass greenhouses. The indoor vertical farm segment is expected to rise at a faster rate. Indoor vertical farms are enclosed, opaque chambers with artificial lighting and vertical growth methods, including hydroponics, aeroponics, and aquaponics.

By crop type, the global indoor farming technology market can be segmented into flowers and ornamentals, herbs and microgreens, fruits and vegetables, and others. The fruits and vegetable segment is expected to have a sizable market proportion. Fruit and vegetable consumption has increased by double digits over the last few decades, and this trend is anticipated to continue in the next few years. One of the key factors that have accelerated the trend is the ever-increasing population. The herbs and microgreens segment is predicted to increase rapidly in the projected period.

By geography, the global indoor farming technology market can be segmented into the Asia Pacific, North America, the Middle East and Africa, South America, and Europe. Because of the increasing rise of greenhouses and vertical farms in the US and Canada, North America is one of the greatest indoor farming technology marketplaces. The greenhouse crop production sector currently dominates the indoor farming industry in the US. The Asia Pacific is expected to develop quickly, as demand for indoor farming technology has increased in the region owing to increasing international businesses investing in agricultural operations to fulfill the demands of crop growers for export-quality commodities exclusively.

COVID-19 Insights

The COVID-19 epidemic impacted the global indoor farming technology market significantly. The adoption rate of indoor farming systems, especially in urban areas worldwide, is expected to skyrocket due to the coronavirus epidemic. The agriculture industry was confronted with some difficulties. Some farmers missed their window of opportunity for harvesting seasonal crops, dropping agricultural product prices, and logistics disruption due to labor shortages. Many countries also realized that they were overly reliant on food imports and began focusing on domestic and internal production.

Market Segmentation:

By Growing Systems

Hydroponics
Aeroponics
Aquaponics
Soil-based
Hybrid

By Component

Hardware
Software
Services

By Facility type

Glass or Poly Greenhouse
Indoor Vertical Farm
Container Farm
Indoor DWC System

By Crop type

Fruits & vegetables
Herbs & Microgreens
Flowers & Ornamentals
Others

By Geography

North America
USA
Canada
Mexico
South America
Brazil
Argentina
Others
Europe
United Kingdom
Germany
France
Italy
Others
Middle East and Africa
Saudi Arabia
Israel
Others
Asia Pacific
China
Japan
India
South Korea
Indonesia
Thailand
Taiwan
Others