Although the concept of indoor farming has been there for some time now, it has invoked new interest and popularity in the recent years, with vertical farming being the most influential practice after greenhouses. The need for higher and better crop yield combined with the demand for fresh food with higher nutritive value has led to several developments and innovations in farming techniques. With many new manufacturers and vendors entering the market, the landscape of the global market is becoming highly competitive.
Market overview
The global indoor farming technology market which was valued at USD 25.40 Billion in 2017 is projected to reach a value of USD 40.25 Billion by 2022, growing at a CAGR of 9.65% during the forecast period from 2017 to 2022.
Based on the growing system, the hydroponics segment held the largest market share in 2017, owing to the advantages such as controlled nutrition levels, higher yield, and no use of soil. On the basis of facility type, the glass or poly greenhouses segment was the dominant segment. However, the indoor vertical farm’s segment is projected to witness the highest growth in the coming years, owing to its ability to control all the environmental factors within the enclosed structure by making use of artificial lights, environmental control systems, irrigation, and fertigation systems. Based on crop type, the indoor farming technology is primarily used for the cultivation of fruits & vegetables.
Geographical growth scenario of the market
Among regions, the market for indoor farming technology in Europe held the largest share in 2017, owing to the unfavorable weather conditions that hamper year-round crop production coupled with the presence of major players in this region. However, the Asia Pacific region is expected to witness the fastest growth over the next five years, owing to the increasing number of indoor farms in countries, such as China and Japan, and the varying climatic conditions in this region.
Factors driving and restraining the market growth
The global market for indoor farming technology is being majorly driven by the following factors:
- Growing demand for fresh foods with the higher nutritive value
- Rising need for higher yields using limited space and water
- Lesser impact of external weather conditions
In addition, production of biopharmaceutical products and development of innovative and cost-effective technologies are expected to offer lucrative growth opportunities for this market.
However, high initial investments and limited variety of crops that can be grown are the major factors expected to hamper market growth. Moreover, lack of adequate funding and the shortage of skilled workforce are the major challenges to be overcome by the players in this market.
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Key players and strategies adopted
The global market for indoor farming technology involves players, such as Philips Lighting (Netherlands), Netafim (Israel), Argus Controls Systems (Canada), EVERLIGHT Electronics (Taiwan), and LumiGrow (US). Apart from these, few other market players that hold a significant share of the market are Logiqs (Netherlands), Illumitex (US), Vertical Farm Systems (Australia), Hydrodynamics International (US), General Hydroponics (US), Richel Group (France), and Agrilution (Germany). These companies are adopting strategies such as agreements, contracts, collaborations, and partnerships, new product launches & developments, expansions, and acquisitions to sustain in the market as well as increase their market share.
