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With the increase in population worldwide and speedy development of industries and urbanization,
demand for food is increasing drastically whereas, arable land for cultivation is decreasing. Vertical
Farming is one technique which has the potential to overcome these challenges and feed the human
community.
Vertical farming is a technique of producing food on vertical surfaces rather than cultivating on the
horizontal surfaces. The food is produced on the stacked layers on structures including skyscraper,
shipping container and repurposed warehouse.
How it works
4 step process-
1. Physical Layout- Crops are cultivated in the stacked layers on vertical structures
2. Lighting- Perfect combination of natural and artificial lights is adjusted using rotating beds
technology
3. Growing medium- Instead of using soil, aeroponic, aquaponic or hydroponic growing mediums
are used.
4. Sustainability features- Various sustainability features used to offset farming cost.
Advantages
1. Less water consumption
2. Farming throughout the year
3. Less exposure to chemicals
4. Less dependent on weather conditions
Disadvantages
1. High installation cost
2. High technology dependence
3. Pollination is difficult
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Increasing CSR activities to reduce pollution, energy consumption
Segmentation
US vertical farming sector is segmented into hydroponics, aeroponics and aquaponics
Hydroponics
Aquaponics
Environment segment in the US vertical farming is divided into indoor and outdoor
Outdoor segment
Indoor Segment
Lighting devices- Occupy 1/3rd of the market share and growing at CAGR 24%. Increasing use of
moisture sensors and GPS enabled tractors are driving lighting devices.
Software market- Sped up by the growing modularity of vertical farms and their individual
ecosystems which warrants the use of a system.
Growth mechanism component
Climate control
Sensing devices
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Growth Potential in the US
The US vertical farming market is projected to reach values of around $3 billion by 2024,
growing at a CAGR of more than 24% during 2018-2024.
Current agriculture techniques are insufficient to fulfil the future demand for food. Vertical
farming has the potential to grow at CAR 27% in the next five years.
With revenue for vertical farming alone estimated at just $212.4 million in 2019, one
forecast calls for the industry to hit $1.38 billion by 2027, a compound annual growth rate of
26.2 percent from 2021 to 2027.
The global market for vertically farmed produce is forecasted to grow from $ 781 million in 2020
to $ 1.5 billion by 2030, representing a CAGR of 6.85%, according to a new report from market
intelligence firm IDTechEx, ”Vertical Farming: 2020-2030.”
United States vertical farming market would result in the overall growth of North America owing
to in the adoption of advanced farming techniques. In addition to this, major companies in the
region are developing advanced technologies and launching new products to stay competitive in
the global market.
Demand for sustainability is increasing with the depletion of resources in the US. Vertical
farming offers a solution that is both sustainable and efficient.
The US has fluctuating climatic conditions due to which crops cannot be grown throughout the
year. Since vertical farming is an indoor activity, green leafy vegetables can be grown year-round
regardless of the climatic conditions.
In the US, land area is decreasing at 2.3% annually, reducing the fertile soil cover. In vertical
farming, crops are grown on vertical structures with minimal requirement of soil.
With the rise in water scarcity in the US, vertical farming is an excellent opportunity for farmers
to grow crops with 98% less water consumption.
In North America, the U.S. has implemented various programs to provide benefits to farmers
who implement vertical farming. Large demand for exports within the Americas will drive the
LATAM market to adopt more sustainable solutions.
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Recent funding in US vertical farming
Plenty Unlimited has raised $140 million in new funding to build more vertical farms around the US.
Plenty currently has an indoor farm in San Francisco and recently announced plans to build its second
farm in Compton, California.
https://www.prnewswire.com/news-releases/plenty-unlimited-has-raised-140-million-in-new-funding-
to-build-more-vertical-farms-around-the-us-301160626.html#:~:text=will%20be%20consumed.-,Plenty
%20Unlimited%20has%20raised%20%24140%20million%20in%20new%20funding%20to,second
%20farm%20in%20Compton%2C%20California.
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AppHarvest
AppHarvest aims to redefine American agriculture by improving access for all to fresh fruits and
vegetables, growing more with fewer resources and creating an AgTech hub from within its Appalachian
home
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Significant market opportunity 17K to 20K Acres of potential development
Downsides
Appalachia
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Better Food Ventures
Five key investable Positive Impact macro themes which they use as a lens to
identify compelling and scalable investment opportunities:
Indoor Agtech
Climate smart soil tech
Farm tech
Dairy and Livestock Agtech
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