Indoor Farming Market Size, Share, Industry, Forecast and outlook (2024-2031)

Indoor Farming Market is segmented By Growing System (Hydroponics, Aeroponics, Hybrid, Soil-based, Aquaponics), By Facility Type (Glass or Poly Greenhouses, Container Farms, Indoor Vertical Farms, Indoor Deep Water Culture (DWC) Systems)), By Crop Type(Fruits & Vegetables, Herbs & Microgreens, Flowers & Ornamentals, Others), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031

Indoor Farming Market Size

The Global Indoor Farming Market reached USD 34.2 billion in 2022 and is expected to reach USD 56.1 billion by 2031 and is expected to grow with a CAGR of 6.4% during the forecast period 2024-2031. One notable trend in the indoor farming market is the increasing integration of automation and AI technologies. For instance, companies like Iron Ox have developed fully autonomous indoor farms where robots handle tasks such as harvesting and monitoring crop health.

The indoor farming market is experiencing significant growth due to factors such as the rising demand for locally grown and pesticide-free produce. It offers year-round cultivation in controlled environments, overcoming limitations of climate and seasonality. Technological advancements in vertical farming systems, hydroponics, and LED lighting are enhancing productivity. 

One driver for the indoor farming market is the increasing focus on sustainable agriculture practices. For instance, companies like Plenty and AeroFarms have implemented vertical farming systems that utilize significantly less water compared to traditional agriculture methods. These systems also eliminate the need for pesticides. By utilizing controlled environments and precise resource management, indoor farming enables efficient use of land and energy while minimizing waste.

Indoor Farming Market Summary

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Indoor Farming Market Dynamics

Technological Advancements in Crop Optimization and Climate Control for Indoor Farming Driving the Market Growth

In the rapidly evolving indoor farming market, technological advancements play a pivotal role in optimizing crop growth and ensuring precise climate control. Innovations in controlled environment agriculture (CEA) have revolutionized the industry by creating ideal growing conditions for various crops. Advanced sensors and monitoring systems allow real-time data collection and analysis, enabling farmers to fine-tune parameters such as temperature, humidity, CO2 levels, and air circulation.

This level of control enhances crop productivity, quality, and consistency throughout the year. Additionally, nutrient management systems have become more sophisticated, providing precise and customized feeding solutions to optimize plant nutrition. Through hydroponics, aeroponics, and aquaponics, indoor farmers can precisely control nutrient delivery, minimizing waste and maximizing plant uptake. This not only improves crop yields but also reduces environmental impact.

Indoor Farming Catering to the Rising Demand for Fresh and Sustainable Produce

The indoor farming market trend is driven by increasing consumer demand for locally grown, fresh, and sustainable produce has emerged as a significant driver for the indoor farming market. As urbanization continues to rise, access to traditional farmland becomes limited, resulting in longer supply chains and reduced freshness. Indoor farming addresses these challenges by establishing farms in urban areas, enabling the production of fresh greens, herbs, and other crops within proximity to consumers.

The environmental benefits associated with indoor farming, such as reduced water usage, elimination of pesticides, and minimal transportation requirements, resonate with eco-conscious consumers. The demand for organic and pesticide-free crops has surged, and indoor farming provides a reliable solution to meet these preferences while minimizing environmental impact.

Cost and Competition Impede Growth of the Indoor Farming Market

One major restraint hindering the growth of the indoor farming market is the high initial investment and operational costs involved in establishing and maintaining indoor farming facilities. These costs impact the market size of indoor farming and can limit the number of participants in the industry. Furthermore, the competition from traditional outdoor farming methods, which benefit from established infrastructure and lower production costs, affects the market. 

In addition, the absence of standardized regulations and policies specific to indoor farming in certain regions poses challenges to market expansion and scalability. Overcoming these constraints necessitates measures such as cost optimization, supportive government policies, and increased awareness regarding the long-term benefits of indoor farming. By addressing these challenges, the indoor farming market can overcome restraints and unlock its full potential for sustainable food production.

Indoor Farming Market Segment Analysis

The global indoor farming market is segmented based on growing system, facility type, crop type, technology, and region.

Hydroponics Dominates the Indoor Farming Market with Approximately 50% Market Share, Revolutionizing Sustainable Crop Cultivation

The global indoor farming market has been segmented by growing systems into aeroponics, hydroponics, aquaponics, soil-based, and hybrid.

The hydroponics segment holds a significant market share of approximately 50% in the indoor farming industry. Hydroponics is a soilless growing system that utilizes a nutrient-rich water solution to cultivate plants. The integration of artificial lighting, such as LED technology, ensures proper illumination for photosynthesis and plant growth. This allows for year-round cultivation and reduces dependence on natural sunlight.

Hydroponics also enables precise nutrient management, where essential elements are directly supplied to the plant roots in optimized proportions. This results in enhanced nutrient uptake and improved crop yields. The controlled environment agriculture (CEA) aspect of hydroponics allows for precise control over environmental factors such as temperature, humidity, and CO2 levels, ensuring optimal growing conditions.

Approximately 50% of the indoor farming market is attributed to hydroponics due to its versatility, scalability, and high productivity potential. This growing method eliminates soil-related issues, reduces water usage by up to 90%, and enables efficient space utilization. These factors, along with the ability to achieve year-round crop production and high-quality output, contribute to the popularity and growth of hydroponics in the indoor farming market.

 Source: DataM Intelligence Analysis (2023)

Global Indoor Farming Market Geographical Share

The North America Region Held the Largest Share of the Indoor Farming Market.

The North America indoor farming market holds the largest share of the global indoor farming market. The North America indoor farming market is experiencing remarkable growth, with an approximate compound annual growth rate of 15%. The market size has reached approximately $3.5 billion, indicating a promising future for the industry. The United States dominates the region, accounting for around 70% of the market share, followed by Canada and Mexico. 

The increasing consumer demand for locally grown, fresh, and pesticide-free produce has been a significant driver of the market's expansion. Technological advancements in vertical farming systems, hydroponics, and LED lighting solutions have further fueled the growth of the indoor farming market share. Additionally, the need for sustainable and resilient food production systems has emphasized the importance of indoor farming in the region.

Source: DataM Intelligence Analysis (2023)

Indoor Farming Companies

The major global players in the market include AeroFarms, Bright Farms Inc., Bowery Inc., FreshBox Farms, Metropolis Farms Inc., Garden Fresh Farms, Village Farms International Inc. Green Sense Farms LLC, Sky Greens, and Argus Control System Limited.

COVID-19 Impact on Indoor Farming Market

Global Recession/Ukraine-Russia War/COVID-19, and Artificial Intelligence Impact Analysis:

Covid-19 Impact

The COVID-19 pandemic has had a positive impact on the indoor farming market. With disruptions in global food supply chains, there has been a growing recognition of the need for localized and resilient food production systems. Indoor farming provides a solution by enabling year-round cultivation and reducing dependence on external sources. The pandemic has accelerated the adoption of indoor farming technologies, such as vertical farming and hydroponics, to ensure a consistent supply of fresh produce. 

Furthermore, the increased focus on food safety and hygiene has further fueled the demand for indoor-grown pesticide-free crops. As a result, the indoor farming market has experienced significant growth during the pandemic and is expected to continue expanding in the post-pandemic era.

Key Developments

• On March 16, 2022, indoor farming company Local Bounti based in Hamilton, Montana, acquired rival Hollandia Produce Group, which grows and sells leafy greens under the name of Pete’s, for $122.5 million. The transaction is expected to close early in the second quarter.
• On January 31, 2022, Kalera AS, one of the preeminent leafy green vertical farming companies, and Agrico Acquisition Corp., a special purpose acquisition company (SPAC), jointly announced that they entered into a definitive merger agreement. As a result, Kalera will transition from its current Euronext Growth Oslo listing to a publicly listed company with its common shares traded on the NASDAQ stock market.
• On March 31, 2021, AeroFarms announced a merger agreement with the special purpose acquisition company (SPAC) Spring Valley Acquisition Corp. to become a publicly traded firm on the Nasdaq under the ticker symbol “ARFM”.

Why Purchase the Report?

• To visualize the global indoor farming market segmentation-based growing system, facility type, crop type, technology, and region, as well as understand key commercial assets and players.
• Identify commercial opportunities in the market by analyzing trends and co-development. 
• Excel data sheet with numerous data points of indoor farming market-level with all segments.
• The PDF report consists of a cogently put-together market analysis after exhaustive qualitative interviews and an in-depth market study.
• Product mapping is available as Excel consists of key products of all the major market players.

The global Indoor Farming market report would provide approximately 61 tables, 62 figures, and 190 Pages.

Target Audience 2024

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies