Report: Vertical farming market worth $ 9.7 billion by 2026

15-12-2021 | |
Photo: Canva
Photo: Canva

While the vertical farming market witnessed a decline in 2020 owing to the spread of COVID-19, it is expected to grow from USD 3.1 billion in 2021 to USD 9.7 billion by 2026, according to a market research report by MarketsandMarkets.

According to the report, the vertical farming 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, the report states.

Hydroponics

The hydroponics growth mechanism is used widely by commercial growers. It is easier to set up, costs less than other mechanisms, and has a higher return on investments (ROI). Comparing the investments required to set up a hydroponics and aeroponics facility of the same size, aeroponics requires a higher initial investment. Moreover, the hydroponics mechanism recycles the maximum amount of water with minimal wastage, making it the most water-efficient farming method, the researchers say.

The report also emphasizes that the amount of nutrients to be delivered to plants can be controlled effectively using hydroponics, enabling control over the growth process and factors, such as the speed of growth and size of plants. “Additionally, in the hydroponics mechanism, in case of a power outage, the plants can survive for a long time since the growing medium continues to supply water and nutrients, unlike aeroponics, where the plants can die in just a few hours due to malfunctioning or failure of mist spraying nozzles,” the researchers say.

Also read this interview with John Purcell, CEO of Unfold: “Vertical farming needs to expand with fruiting crops”

Building-based vertical farms

According to MarketsandMarkets, the vertical farming market is primarily dominated by the building-based vertical farms’ segment as leading companies in the market are involved in this type of farming. Building-based vertical farms generate better per sq. ft. revenue than shipping container-based vertical farms, as the former uses lesser capital and incurs lower operating expenses (for the same area).

On the contrary, shipping container-based vertical farms are ideal for serving small consumer bases since crops are grown inside containers that require large spaces to set up, making it ineffective and costly to serve a larger consumer base. However, the researchers think the market for shipping container-based vertical farms is likely to register a higher compound annual growth rate (CAGR) as it is a ready-to-use solution that helps cater to the rising demand for fresh and high-quality produce. “Shipping container-based vertical farms are flexible, easy to operate, and portable. Consequently, the increasing demand for fresh produce is expected to create notable growth opportunities for this segment in the next few years,” the report states.

Also read: Vertical farming sector struggles with costs

Asia Pacific to dominate the vertical farming market

In Asia Pacific, the companies involved in vertical farming are investing and expanding their operations in other countries. The report mentions agritech company Sustenir Agriculture (Singapore), which launched a 30,000 sq. ft. hydroponics vertical farming facility in Tuen Mun, Hong Kong, in November 2019. 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, concludes the report.

Claver
Hugo Claver Web editor for Future Farming