The global vertical farming market size was estimated at USD 8.15 billion in 2024 and is projected to reach USD 49.25 billion by 2033, growing at a CAGR of 22.6% from 2025 to 2033. This substantial growth is primarily driven by the increasing need for sustainable agricultural practices in urban areas, coupled with rapid technological advancements in Internet of Things (IoT), artificial intelligence (AI), and hydroponic systems. As global food demand rises alongside population growth, traditional farming methods are facing mounting pressure due to shrinking arable land and climate-related challenges. Vertical farming has emerged as a viable solution to address these issues by enabling efficient food production in controlled indoor environments. Additionally, the adverse effects of climate change such as unpredictable weather patterns, water scarcity, and declining soil quality are accelerating the adoption of alternative farming techniques, further contributing to market expansion.

Rapid urbanization is significantly reducing the availability of arable land, especially in metropolitan and peri-urban regions. This trend has intensified the need for innovative agricultural solutions capable of operating within limited spaces. Vertical farming allows crops to be cultivated in stacked layers within urban infrastructures such as warehouses, shipping containers, and rooftops, thereby optimizing land use and minimizing dependency on traditional farmland. This approach is particularly relevant in densely populated regions where conventional agriculture is increasingly impractical or economically unviable. By enabling food production closer to consumers, vertical farming also helps reduce transportation distances, lower carbon emissions, and improve access to fresh produce in urban food systems.

The integration of advanced technologies such as hydroponics, aeroponics, automation, and data-driven control systems has significantly improved the operational efficiency of vertical farming operations. These technologies allow growers to precisely regulate environmental factors such as light, temperature, humidity, nutrients, and water usage, resulting in higher crop yields and reduced resource consumption compared to conventional farming. For example, in March 2025, BrightFarms Inc. announced the expansion of its greenhouse facility in Macon, Georgia. Once completed, the facility will span 1.5 million square feet, making it the most advanced greenhouse in the state of Georgia. The expansion is designed to meet the growing demand for locally grown produce across the Southeastern U.S. and enhance regional food security by delivering fresh greens within 24 hours of harvest. Automation plays a critical role in such large-scale facilities by lowering labor costs, improving consistency, and increasing scalability, thereby making vertical farming a more commercially viable option for widespread adoption.

Key Market Trends & Insights:

• North America dominated the global vertical farming market in 2024, accounting for the largest revenue share of 33.6%. This leadership is primarily driven by rising concerns over food security, strong technological infrastructure, and early adoption of advanced agricultural technologies. The vertical farming industry in the U.S. is expected to witness significant growth over the forecast period, supported by increasing investments, favorable government initiatives, and growing consumer demand for locally sourced, sustainable produce.
• By component, the hardware segment led the market and held the largest revenue share of 61.5% in 2024. This dominance is attributed to high capital investments required for lighting systems, climate control equipment, sensors, and structural components. Meanwhile, the software segment is anticipated to grow at the highest CAGR during the forecast period, driven by the increasing complexity of indoor agriculture operations and the growing reliance on data analytics, AI-driven monitoring, and automation platforms for real-time decision-making.
• By growing mechanism, the hydroponics segment accounted for the largest revenue share in 2024 and held a dominant position in the market. Hydroponic systems are widely adopted due to their efficiency, lower water consumption, and suitability for a wide range of crops. In contrast, the aquaponics segment is expected to grow at a significant CAGR during the forecast period, supported by its closed-loop ecosystem that combines fish farming with plant cultivation to enhance sustainability.
• By structure, the shipping container segment dominated the market and held the largest revenue share in 2024. Shipping containers offer modularity, portability, and ease of deployment, making them ideal for urban and decentralized farming applications. However, the building-based segment is expected to grow at the fastest CAGR from 2025 to 2033, driven by increasing investments in large-scale vertical farming facilities designed to support commercial food production.
• By crop category, the fruits, vegetables, and herbs segment dominated the market and accounted for the largest revenue share in 2024. These crops are well-suited to vertical farming due to their short growth cycles, high market demand, and compatibility with controlled environments. The flowers and ornamentals segment is expected to grow at a significant CAGR during the forecast period, fueled by rising demand for sustainably grown, locally sourced, and high-quality floral products for commercial and decorative purposes.

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Market Size & Forecast:

• 2024 Market Size: USD 8.15 Billion
• 2033 Projected Market Size: USD 49.25 Billion
• CAGR (2025-2033): 22.6%
• North America: Largest market in 2024
• Asia Pacific: Fastest growing market

Key Companies & Market Share Insights:

Key players operating in the vertical farming industry include Intelligent Growth Solutions, Signify Holding, iFarm, Freight Farms, Inc., and Argus Control Systems Limited. These companies are actively pursuing strategic initiatives such as new product development, partnerships, collaborations, and long-term agreements to strengthen their competitive positioning and expand their global footprint.

• In August 2025, Intelligent Growth Solutions partnered with Aberdeen-based EPC contractor Modutec to support its expansion into the UAE. The collaboration aims to construct 20 vertical farming growth towers as part of a larger 200-tower GigaFarm project located in Dubai’s Food Tech Valley. The growth towers will operate within a self-contained, closed-loop system designed to maximize resource efficiency and minimize waste, highlighting the partners’ commitment to sustainable and technologically advanced agricultural solutions.
• In June 2025, Signify Holding introduced new 4-channel LED models within its Philips GreenPower toplighting force (TLF) series. These advanced 800W and 1040W lighting systems offer precise control over red, blue, white, and far-red light spectrums through the Philips GrowWise platform. This enables growers to optimize light intensity, energy consumption, and crop development in real time. Designed for crops such as cucumbers, chrysanthemums, strawberries, and young plants, the TLF series delivers high light output of up to 5150 μmol/s, efficacy up to 4.3 μmol/J, and patented Quadro Beam optics, ensuring uniform light distribution, improved crop performance, and reduced installation costs in greenhouse environments.

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Conclusion:

The global vertical farming market is set for rapid expansion, driven by the growing need for sustainable food production solutions amid urbanization and declining arable land. Advancements in technologies such as IoT, AI, hydroponics, and automation are significantly improving operational efficiency, yield consistency, and resource optimization. North America currently leads the market due to strong food security initiatives and technological adoption, while other regions are expected to witness accelerated growth. Hardware components dominate current investments, although software solutions are gaining traction as indoor farming systems become more data-intensive. Overall, increasing demand for locally grown, high-quality produce is expected to sustain strong market growth through 2033.