Vertical farming is a unique subset of the agriculture industry, which consists of the production of plants grown in vertical layers. The crops are stacked horizontally and are often kept indoors, relying on light-emitting diodes (LEDs) as the sole light source. The benefit of this form of farming is that it is in many ways more sustainable and also eliminates the issue of a lack of arable land for traditional agriculture.
Vertical farming eliminates agricultural runoff, significantly reduces the use of fossil fuels, and, more importantly, allows for year-round crop production. The market is divided into subcategories for the production of tomatoes, leafy greens, and more. According to the report, the market as a whole was worth $239.9 billion in 2019.
As vertical farming is a relatively new (and growing) industry, the market has allowed plenty of opportunities for startups to dominate. Among the biggest players in the industry are AeroFarms, an acclaimed vertical farming company that has recorded more than $130 million in investment since its 2004 launch; Bowery Farming, a New York-based company; AeroFarms, a company based in New Jersey; and California company Crop One Holdings. Other leading companies include Plenty Unlimited, Gotham Greens, MIRAI Co., and BrightFarms.
Many of these companies were founded within the past two decades and have benefited from a surge in interest from investors. Investment tracking platform Crunchbase estimated that agricultural food and technology companies raised a total of $8.1 billion in 2020 alone. The momentum in the industry can be seen in funding raised by new startups on the scene, such as Oishii, a New York-based company that recently raised $50 million in a Series A funding round to grow strawberries indoors.
These companies will continue to benefit from a growing industry, the market analysts report. The market is projected to expand by a compound annual growth rate of 20% from 2019 to 2027, which is a massive average yearly increase. By the end of the forecast period, the vertical farming market will be worth over $1 billion, a more than 325% increase from its current value.
This growth is expected to be driven by a continuation of the trends that have emerged over the past two decades. “As consumer trend is developing toward ‘fresh-from-farm-to-table,’ the demand for freshly harvested green vegetables is expected to increase across retail outlets,” the market analysis reads. Due to an increased global focus on climate change and sustainability, vertical farming will be increasingly looked at as a pathway to satisfying these changing consumer habits.
About the Author
Jemima is a journalist who enjoys reporting on business, particularly small business and entrepreneurship.