Global indoor farming market to reach valuation of US$67 billion by 2031
According to Astute Analytica Research, the global indoor farming market size and share was valued at US$28.7 billion in 2022 and is anticipated to reach US$67 billion by 2031, growing at a CAGR of 10.1% over the forecast period 2023-2031.
Indoor farming is still a relatively small portion of global agricultural output. However, the industry has been growing rapidly in recent years, and it is expected to play an increasingly important role in the future of food production. This has made indoor farming particularly attractive to countries with harsh climates or limited arable land. As a result, some of the top countries in indoor farming include Japan, the USA, Canada, the Netherlands, and China.
The growing demand for indoor farming is driven by the need for sustainable and efficient food production, the desire for locally grown produce, and the increasing demand for organic food. The major crops grown in indoor farming include leafy greens, herbs, tomatoes, strawberries, and peppers. These crops are well-suited to indoor farming as they can be grown in relatively small spaces and have high yields. In addition, many of these crops are perishable and have a short shelf-life, making them ideal for local production and consumption.
The adoption of new technologies such as artificial intelligence (AI), the Internet of Things (IoT), and automation is also driving the growth of the indoor farming market. These technologies enable indoor farmers to monitor and control the growing environment, optimize crop yields, and reduce labor costs.
According to the findings from Astute Analytica Research, hydroponics is expected to contribute over 46% of the revenue generated by the global market. This is due to the numerous advantages of hydroponics, such as higher crop yields, efficient use of resources, and year-round production capabilities. The findings indicate that there are currently more than 20,000 hydroponics farms operating worldwide, with a total investment of over US$5 billion in this segment. The production output of hydroponics farms is estimated to be around four million tons of produce annually, with the majority of crops being leafy greens such as lettuce, spinach, and kale.
One of the major advantages of hydroponics is the ability to grow crops in a controlled environment, which allows for optimal growing conditions and yields. This has made hydroponics particularly attractive for urban farming in the global indoor farming market, where space is limited and traditional agriculture may not be feasible. In addition to the production benefits, hydroponics also has environmental benefits. The use of hydroponic systems can reduce water usage by up to 90% compared to traditional agriculture, and also reduce the use of pesticides and fertilizers.
Despite the many advantages of hydroponics, there are also some challenges. The initial investment in setting up a hydroponic system can be high, and there is a steep learning curve for those new to this type of farming. Additionally, there are concerns around the sustainability of the materials used in hydroponic systems, such as plastics.
Indoor farming, including vertical farming, is a rapidly growing industry. Thus, it is attracting a significant attention from investors around the globe. This trend is likely to continue in the future due to several factors, including increasing demand for fresh, locally grown produce, concerns about food security and safety, and the need to reduce the environmental impact of traditional agriculture.
One of the main advantages of indoor farming is that it allows for year-round production of crops in a controlled environment. This means that farmers can produce a consistent supply of fresh, high-quality produce without being limited by weather conditions or seasonal fluctuations. Additionally, indoor farming can reduce water usage, eliminate the need for pesticides and herbicides, and minimize the transportation costs and environmental impact associated with traditional agriculture.
The current market for indoor farming is estimated to be worth US$28.7 billion in 2022, and it is projected to grow at a compound annual growth rate of 101% from 2023 to 2031. This growth is being driven by increasing consumer demand for locally grown, sustainable produce, as well as the development of advanced technologies that enable more efficient and cost-effective indoor farming operations.
Looking into the future, the indoor farming market is expected to continue to expand rapidly, driven by factors such as the increasing global population, rising urbanization, and the need for sustainable food production methods. Additionally, advances in technology such as automation, artificial intelligence, and data analytics are likely to play a significant role in the growth of the indoor farming industry, enabling farmers to produce more crops with greater precision and efficiency.
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