Indoor Farming Market Size, Share and Trends 2024 to 2034

Indoor Farming Market Size and Forecast 2024 to 2034

The global indoor farming market size is projected to reach around USD 149.07 billion by 2034 increasing from USD 43.07 billion in 2024, at a CAGR of 13.22% from 2024 to 2034. Rising consumer awareness regarding the advantages of consuming fresh and high-quality food is expected to drive the indoor farming market growth.

Indoor Farming Market Key Takeaways

• Europe dominated the global indoor farming market with the highest market share of 34% in 2023.
• Asia Pacific is expected to show the fastest growth in the market during the forecast period.
• By facility type, the greenhouses segment dominated the market in 2023.
• By facility type, the vertical farms segment is expected to grow at the fastest rate in the market over the forecast period.
• By component, the hardware segment led the market in 2023.
• By component, the climate control system segment is projected to show rapid growth in the market during the forecast period.
• By growing mechanism, in 2023, the hydroponics segment dominated the global market.
• By growing mechanism, the aquaponics segment is expected to grow rapidly in the market over the forecast period.
• By crop category, the tomato segment dominated the market in 2023.
• By crop category, the fruits, vegetables, & herbs segment is expected to grow at the fastest rate in the market during the forecast period.

Europe Indoor Farming Market Size and Growth 2024 to 2034

The Europe indoor farming market size was exhibited at USD 12.93 billion in 2023 and is projected to be worth around USD 149.07 billion by 2034, poised to grow at a CAGR of 13.22% from 2024 to 2034.

Europe dominated the global indoor farming market in 2023. The region's growth is driven by a stringent regulatory environment that focuses on food safety and sustainability. This creates a strong need for indoor farming practices which cover all these aspects. Furthermore, European consumers are focusing more on being judicious about the food they consume. They also want fresh and high-quality food with a proper source and grown method. Indoor farms fulfill all these demands by providing unique solutions.

• In May 2024, Robbe's Little Garden and the Metropolia University of Applied Sciences in Myrrmäki entered joint research, testing year-round strawberry cultivation in a closed environment. The so-called Urbanfarmlab is developing solutions that are set to be adopted at an industrial scale.

Asia Pacific is expected to show the fastest growth in the indoor farming market during the forecast period. The large growing population, which requires a stable food supply, is a key factor driving the growth of the market in this region. China led the market in the region. China's solid technological base with the growing pace of smart factory construction will likely fuel market growth over the forecast period.

Global Pulses Cultivation 2022 statistics

Market Overview

Indoor farming is the process of cultivating inside a specific controlled environment, such as within greenhouses or buildings. It uses a variety of techniques to improve plant growth and maximize yield. It is an innovative method of agriculture with the potential to solve problems like resource scarcity and food security. It also provides certain advantages over traditional farming methods. The controlled environment also limits the need for pesticides, which can contribute to the sustainable food system.

How is AI Revolutionizing the Farming Sector?

Applications and solutions that utilize artificial intelligence (AI) in the indoor farming market have been developed to assist farmers in specific and regulated farming by giving them the correct suggestions on crop rotation, water management, and timely harvesting, along with optimal planting, pest attacks, and nutrition management. Additionally, AI enables systems to make proper weather predictions and assess farms for the presence of pets or diseases using provided data like precipitation, wind speed, and temperature.

• In November 2023, GrubMarket announced the launch of Farm-GPT, a groundbreaking new generative artificial intelligence (AI) product designed to empower American farmers and growers with valuable data-driven insights for maximizing profits and optimizing crop selection.

Indoor Farming Market Growth Factors

• The increasing population globally, along with the rise in food demand, is expected to drive the indoor farming market growth.
• Advancements in LED lighting and automation can fuel the market growth further.
• Rising consumer interest in safe and sustainable food production methods can boost the indoor farming market growth shortly.

Market Scope

Market Dynamics

Driver

Growing demand for nutritious food

Consumers around the globe are adopting healthy and active lifestyles. Hence, the demand for these products has risen drastically, which in turn increased indoor farming as an advanced system of integrations to help grow efficiencies and yields. Moreover, rising technology and health awareness can lead to more demand for nutritious and healthy food. This changing consumer behavior can drive the indoor farming market growth during the forecast period.

• In October 2023, Ancient Nutrition launched the world's first Regenerative Organic Certified® nutritional supplement formulas. Ancient Nutrition hopes to lead the way for other brands to follow suit and for consumers to have an option that now supports a movement that goes far beyond organic.

Restraint

Large upfront investments

The amount of energy required to grow and produce can affect the cost of indoor farming. Indoor farming requires lots of energy to take care of yields, which directly affects the farming budget. Also, high electricity cost for indoor farming is expected to hamper the overall growth of the indoor farming market.

Opportunity

The increasing need for food security technology

Food security depends on access, availability, utilization, and stability. In big cities, free land is not readily available, so Indoor farming is the best option. In previous years, food security was the biggest concern due to environmental factors, but nowadays, technological advancements in different farming methods, like indoor farming, are reducing this concern, which can have a positive impact on market expansion. Furthermore, people are consuming safe and highly nutritious value-content food that meets their dietary demands and, therefore, can drive the growth of the indoor farming market.

• In February 2024, Masdar City launches a smart vertical farm with an AgriTech firm in a food security push. Alesca Technologies uses automated equipment and AI software to grow multiple varieties of fresh foods and herbs.

Facility Type Insights

The greenhouses segment dominated the indoor farming market in 2023. The greenhouse is a closed structure built with transparent material used to grow crops, plants, and flowers. Greenhouses also stimulate higher yield production than conventional farming, which can propel market growth.

• In January 2024, Indoor farming pioneer and fresh food brand Gotham Greens announce the opening of its first high-tech hydroponic greenhouse in Texas and the company’s thirteenth greenhouse nationwide, bringing its total footprint to more than 40 acres (1.8 million square feet) across nine U.S. states.

The vertical farms segment is expected to grow at the fastest rate in the indoor farming market over the forecast period. This can be attributed to the rising adoption of eco-friendly production of vegetables and fruits. Indoor farming also protects the crops from harsh weather conditions using innovative techniques. Like controlled environment, agriculture technology, etc.. Such technological advancements can contribute to the market expansion throughout the forecast period.

Component Insights

The hardware segment led the indoor farming market in 2023. This is because hardware plays a key role in maintaining the environment of indoor farms. The segment is further classified into lighting systems, sensors, climate control systems, and irrigation systems, which make the cultivation of indoor crops.

The climate control system segment is projected to show rapid growth in the indoor farming market during the forecast period. The climate control system helps to control the indoor climate with air-conditioning units, humidifiers, chillers, and heaters, among others.

Growing Mechanism Insights

The hydroponics segment dominated the global indoor farming market in 2023. Hydroponics can cultivate food without fertile land by using oxygen-contained water and nutrients to grow plants without soil. In hydroponic greenhouses in Canada, vegetables such as tomatoes, cucumbers, and peppers are grown. The rising population, along with limited resources, can boost the segment's growth soon.

• In June 2023, an Israeli hydroponics start-up expanded into the U.S. The company, known for its technology designed for small-scale hydroponics growers, is setting its sights on North American expansion after successfully selling its products in over 20 countries worldwide.

The aquaponics segment is expected to grow rapidly in the indoor farming market over the forecast period. Aquaponics is the blend of both hydroponics and aquaculture, which also reduces the utilization of toxic chemicals for cultivation. The minimum water wasted is the key benefit of aquaponics over the conventional method of agriculture. Aquaponics uses about 90% less water than traditional farming. These factors can lead to segment growth.

Crop Category Insights

The tomato segment dominated the indoor farming market in 2023. Tomatoes are the largest crop that has been cultivated due to their rapid production rate. However, the lack of good storage facilities, such as poor modes of transport and cold rooms, are the two major factors influencing the tomato segment in the market.

The fruits, vegetables, & herbs segment is expected to grow at the fastest rate in the indoor farming market during the forecast period. This is due to the rising production of commonly grown fruits, herbs, and vegetables like cucumbers, bell peppers, and leafy greens. This crop can deliver maximum profit from their cultivation to companies involved in their manufacturing.

Recent Developments

• In 2024, Metropolis Farms Inc. struck a major deal with a grocery store chain to supply them with fresh, locally grown leafy greens cultivated in their indoor vertical farms. This partnership allows Metropolis Farms to scale their production significantly and reach a wider customer base.
• In 2024, Bowery Inc., Building on their success in the Northeast, Bowery announced ambitious plans to expand their vertical farming operations to two new cities in the U.S.
• In January 2023, Priva announced the strategic partnership with Aranet. The partnership aimed to serve the growing demand for more and new greenhouse sensors to generate data. This partnership will bridge the gap between wireless sensor platforms and other data sources in greenhouses.

Indoor Farming Market Top 10 Companies

• Argus Control Systems Ltd.
• Certhon
• Richel Group
• Netafim
• General Hydroponics
• Hydrodynamics International
• Illumitex
• Lumigrow
• Signify Holding
• Bowery Farming Inc.

Segments Covered in the Report

By Facility Type

• Greenhouses
• Vertical Farms
  • Shipping Container
  • Building-based
• Others

By Component

• Hardware
  • Climate Control Systems
  • Lighting Systems
  • Sensors
  • Irrigation Systems
• Software
  • Web-based
  • Cloud-based
• Services
  • System Integration & Consulting
  • Managed Services
  • Assisted Professional Services

By Growing Mechanism

• Aeroponics
• Hydroponics
• Aquaponics

By Crop Category

• Fruits, Vegetables & Herbs
  • Tomato
  • Lettuce
  • Bell & Chili Peppers
  • Strawberry
  • Cucumber
  • Leafy Greens
  • Herbs
  • Others
• Flowers & Ornamentals
  • Perennials
  • Annuals
  • Ornamentals
  • Others

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East & Africa