Projected to be US$ 42,097.4 million in 2023, the indoor farming market continues its upward trajectory, having been valued at US$ 38,783.8 million in 2022. Forecasts suggest a robust Compound Annual Growth Rate (CAGR) of 9.8% from 2023 to 2033, with the market expected to reach US$ 1,06,963.1 million by 2033. This growth reflects increasing demand for sustainable agriculture solutions, driven by factors such as population growth, urbanization, and climate change. As indoor farming gains momentum as a viable alternative to traditional agriculture, it presents significant opportunities for innovation and investment in the agricultural sector.
Traditional outdoor farming is being augmented with indoor farming to fulfill the food demands of the ever-increasing global population. Thus, the rising global population is driving the adoption of indoor farming methods.
Due to factors like global warming and land struggles, there is a growing dearth of arable land. Farmers are turning to indoor farming in the absence of farmable land. Indoor farming is also giving more control to farmers. With indoor farming, farmers are able to monitor the resources used and are thus able to make savings on costs.
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As farmers gain more control over crop production with modern methods, indoor farming has more scope. Indoor farming enables farmers to grow exotic crops, regardless of geography. Indoor farming also allows first-time and amateur farmers to join the ranks and open small-scale operations.
Business Growth Drivers:
- Increased Demand for Locally Grown Produce: Consumers are increasingly valuing locally sourced and fresh produce. Indoor farming allows for year-round production in controlled environments, thus meeting this demand regardless of external weather conditions.
- Rising Population and Urbanization: With the global population on the rise and more people living in urban areas, there is a growing need for efficient and sustainable food production methods closer to urban centers. Indoor farming can address this need by utilizing vertical space within cities.
- Technological Advancements: Continuous advancements in technology, including LED lighting, hydroponics, and automation, have made indoor farming more efficient and cost-effective. These technologies enable precise control over environmental factors such as light, temperature, and humidity, leading to higher yields and better quality produce.
- Resource Efficiency: Indoor farming typically uses less water and land compared to traditional outdoor farming methods. Additionally, it can reduce reliance on pesticides and herbicides, making it more environmentally sustainable.
- Shorter Supply Chains: Indoor farms located near urban centers can significantly reduce the distance food travels from farm to table. This shorter supply chain can lead to fresher produce, lower transportation costs, and reduced carbon emissions.
Key Takeaways from the Indoor Farming Market
- The indoor farming market is expected to be US$ 42,097.4 million in size in 2023.
- Greenhouses are the most common type of facility used in indoor farming. In 2023, greenhouses hold 45.2% of the market share by facility type.
- Hydroponics is the system most used to grow food in indoor farming. The hydroponics segment accounts for 47.4% of the market share in 2023.
- Australia is predicted to be one of the fastest-growing countries in the market. From 2023 to 2033, the CAGR for the market in Australia is expected to be 11.9%.
- Japan is one of the Asian countries with significant potential for market growth. The CAGR for Japan market is predicted to be 11.8% through 2033.
- The CAGR of the market in Canada is pegged at 10.4% over the forecast period.
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Competition Analysis of the Indoor Farming Market
The fragmented market holds promise for both big-name and small-scale players. Sustainability and the preservation of resources are priorities for many of the players in the market. Some of the prominent companies in the market are Argus Control Systems Ltd., Certhon, AeroFarms, Bright Farms Inc., and Richel Group.
Top 10 Key Players in the Indoor Farming Market
- AeroFarms
- Argus Control Systems Ltd.
- Bowery Inc.
- Bright Farms Inc.
- Certhon
- FreshBox Farms
- General Hydroponics
- Hydrodynamics International
- Illumitex
- Lumigrow
Recent Developments in the Indoor Farming Market
- In October 2023, a new plant was announced for the Como region of Italy by Planet Farms. The brand is interested in market expansion.
- In August 2023, Gotham Greens launched a second greenhouse in the Colorado region of the United States. The indoor farm is high-tech and uses hydroponics.
- In May 2022, Fluence was acquired by Signify Holding. By means of the acquisition, Signify Holding takes a step into the lighting sector of the indoor farming market.
Key Segments in the Indoor Farming Industry
By Facility Type:
- Greenhouse
- Indoor Vertical Farm
- Container Farm
- Indoor Deep Water Culture System
- Other Facility Type
By Growing System:
- Aeroponics
- Hydroponics
- Aquaponics
- Soil-based
- Hybrid
By Region:
- North America
- Latin America
- Europe
- South Asia
- East Asia
- Oceania
- Middle East and Africa (MEA)
Author
Sneha Varghese (Senior Consultant, Consumer Products & Goods) has 6+ years of experience in the market research and consulting industry. She has worked on 200+ research assignments pertaining to Consumer Retail Goods.
Her work is primarily focused on facilitating strategic decisions, planning and managing cross-functional business operations, technology projects, and driving successful implementations. She has helped create insightful, relevant analysis of Food & Beverage market reports and studies that include consumer market, retail, and manufacturer research perspective. She has also been involved in several bulletins in food magazines and journals.
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