Vertical Farming Industry to Grow 25% Annually Through 2030

Vertical farming facilities usually are not more than two or three stories high, but the rapidly growing indoor farming industry is aiming for the stratosphere in terms of revenue.

According to a new report from Fortune Business Insights, vertical farming will grow seven-fold between now and 2030, soaring to more than $27B in value globally in 2030 from a little over $4B in 2022.

Nowhere is indoor farming growing faster than in North America, which currently has a global market share of close to 40%, the report said. The North American market for vertical farming is expected to expand at a compound annual growth rate of 25.5% during the rest of this decade.

Low water usage, enhanced efficiency, enhanced food security and resistance to weather and environmental conservation are fueling the growth of vertical farming.

Recreational cannabis, now legal in 24 U.S. states, also is driving the growth of indoor farming, the report said.

Vertical farming facilities are usually two- to three-story buildings that feature floor-to-ceiling racks holding leafy vegetables or fruits grown in climate-controlled settings with intense lighting in 24/7 operations (think data centers with radicchio instead of servers).

Shipping containers also are being modified with drip irrigation systems, LED lights and vertically stacked shelves to accommodate vertical farming.

The emerging indoor agriculture industry in the U.S. is positioning itself as a direct-to-market produce supplier. Facilities will be developed to service consumers within a 50-mile radius, able to deliver fresh produce from “farm” to table within a day of harvesting, while generating far greater yields per acre than traditional outdoor agriculture.

The vertical farming industry is deploying robotics and AI to track the development of plants from irrigation to harvesting. Robots help to move farms vertically from one place to another, while AI tools help manage the temperature, light and water required for plants.

More than 2000 vertical farms currently are operating in the US. While vertical farms use much less land and water than conventional outdoor farms they are large consumers of electricity.

Last year, Realty Income Corp. formed a strategic partnership with South San Francisco-based vertical farming startup Plenty Unlimited to develop up to $1B of properties in the rapidly expanding indoor farming sector.

Realty, a publicly traded REIT is acquiring sites and developing them to be leased back to Plenty. Realty acquired the land and funded the development of Plenty’s Richmond, VA facility.

The $300M, 120-acre facility in Richmond grows crops including strawberries, tomatoes and leafy greens, with a capacity to grow up to 20M pounds of produce annually, an output the company says can generate up to 350 times the yield per acre of traditional outdoor farming.