The vertical farming market size in Europe is growing at a brisk pace and was valued at USD 1.89 billion in 2023. The European market is further expected to exhibit a CAGR of 22.2% from 2024 to 2032 and be worth 11.48 billion by 2032 from USD 2.31 billion in 2024.
Vertical farming emphasizes indoor practice where the process will not be affected by climatic changes. Therefore, the production remains constant. People are more aware of these new farming techniques, especially in urban areas, and are leveraging the European market growth. Key players are focussing on implementing various strategies to encourage consumers to adopt environmentally friendly and safer organic products in their daily routine.
Rapid urbanization is responsible for the decreasing agricultural land in Europe, which is greatly favoring the growth of the European vertical farming market. Vertical farming is an innovative technology that produces food organically. In this process, there is no need to use chemicals and pesticides, and the crops are cultivated with advanced technology. Vertical farming is completely dependent on natural solutions like aquaponics growth. Growing demand for organic food products with the shifting trend towards the adoption of healthy lifestyle activities is enhancing the growth rate of the European market.
The growing prominence of lowering the use of nitrate concentration, which is a health hazard, is likely to fuel the contribution to the growth of the European vertical farming market. In Europe, the traditional agricultural process is the sole reason for the emission of 11% of greenhouse gases annually. This attribute greatly promotes the growth rate of the European market. The growing population in Europe is surging the demand to increase food production. According to a recent survey, the population in Europe will reach 470.1 billion by 2025. These statistics are directly ascribed to promote the advanced techniques in farming to improve the food production rate. Vertical farming is the best technique to boost the production rate as the process is completely done under specific circumstances and doesn’t depend on adverse weather conditions. Hence, the growing population is increasing the need to adopt the latest techniques in farming, which is quietly setting up growth opportunities for the market.
The high cost of installation and maintenance of modern techniques is primarily impeding the market’s growth rate. In addition, not all crops can be grown through vertical farming techniques due to space constraints, which is acting as a big challenging factor for the market's key players.
COVID-19 showed a significant impact on the growth of the vertical farming market in Europe. Due to complete lockdown restrictions and supply chain disruptions, the demand was totally reduced in 2020. However, the slow growth rate was sustained for about three months thereafter, and the demand for the vertical farming market started to rise at a higher rate. The side effects of COVID-19 impelled the need to adopt healthy lifestyle habits. The adoption of organic food products has been increasing since 2021, and people are set to adopt healthy eating habits to maintain good health. This factor is likely to surge the demand for the vertical farming market in the coming years.
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REPORT METRIC |
DETAILS |
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Market Size Available |
2023 to 2032 |
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Base Year |
2023 |
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Forecast Period |
2024 to 2032 |
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CAGR |
22.2% |
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Segments Covered |
By Growth Mechanism, Structure, Offering and Region |
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Various Analyses Covered |
Global, Regional, & Country Level Analysis; Segment-Level Analysis, DROC; PESTLE Analysis; Porter’s Five Forces Analysis; Competitive Landscape; Analyst Overview of Investment Opportunities |
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Regions Covered |
Germany, the UK, France, Spain, and Italy |
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Market Leaders Profiled |
Illumitex Inc. (U.S.), Aerofarms (U.S.), Koninklijke Philips N.V. (The Netherlands), and Sky Greens (Singapore), among others. |
The hydroponics segment captured the maximum portion of the Europe vertical farming market. It is the most frequently used technology in the regional industry and holds around 60% market share. This is because of the ability to cultivate plants directly in nutrient-embedded water instead of soil. This method is called for its flexibility to a broad range of crops.
The aeroponics segment, despite being less in market size, is rapidly growing and is expected to possess a 25% portion of the European industry. This can be attributed to the increasing demand for high-quality and fresh food and the requirement for greater yields with limited space. Also, airborne plant roots are routinely covered with a nutritional solution. This procedure offers superior root zone oxygenation and may need even lower water than the hydroponics segment.
On the other hand, the aquaponics segment has less than a 10% share of Europe's vertical farming market. It builds a cooperative system by merging plant agriculture, aquaculture, or fish farming.
The building segment presently accounts for a major market share. This is propelled by prominent players with wider-scale activities and current investments in this model. They use either repurposed structures, i.e., warehouses and abandoned factories, or newly built spaces particularly designed for vertical farming. They provide scalability but also usually include substantial upfront capital investment.
The shipping segment is quickly expanding category and is expected to hold a notable 20% market share. Their adaptability and lower investment in early phases compared to broad-scale building-based systems attract many entrants. Stand-alone and ready-made vertical farming units are present under retrofitted shipping containers. These focus on modularity and the potential to be deployed in several locations.
The hardware segment is the leading category. The increasing demand for the hardware is estimated to expand at a higher CAGR during the prediction period. The lighting sector gained the maximum popularity in 2023. Moreover, Fluorescent grow lights are applied to cultivate herbs and vegetables indoors. Furthermore, these lamps are available in different types of intensities, making them easily accessible. The segment’s market share is expanding due to the heavy reliance on ideal grow light products irrespective of indoor, vertical farming, or plant factories. Besides this, in terms of technology, it is appropriate for the primary requirements of multi-layer vertical farming coupled with LEDs, which is progressively propelling the market growth of the segment. However, climate Control devices are likely to expand at a faster rate throughout the forecast period. European vertical farming plays a significant role in reducing the environmental effects of agriculture. It mitigates the water amount and land required to yield the same or more food. Apart from this, long logistical routes and the application of chemicals and pesticides are eliminated with the help of climate control devices, ultimately benefiting the hardware segment.
The leafy green segment is driving forward at a faster rate during the forecast period for the European vertical farming market. This can be attributed to growing awareness of healthy lifestyles and eating habits. Also, it is one of the most produced crops in regional vertical farms, coupled with other vegetables like cucumbers, peppers, and tomatoes. Moreover, Italy, France, Spain, and Germany are key players in accelerating the adoption of vertical farming for leafy green cultivation. Also, these nations are increasingly using technology to satisfy the heightening demand for fresh, chemical, and pesticide-free crops. For instance, it assists in growing the perfect arrangement of lettuce types and formulas that support improving the quality and yields of produce. Additionally, the technique is extensively utilized in Europe to produce lettuce types to maintain the productivity of crop cultivation farms. This method also helps suppliers effectively reduce radiation and transport-related expenses.
The European market is predicted to account for a considerable share of the worldwide vertical farming market during the forecast period. Increasing prominence for high-quality food with the latest agricultural techniques is attributed to the acceleration of the growth rate of the market in this region.
The German market is also expected to grow at a notable CAGR during the forecast period owing to the rising investments in the latest farming techniques. Stringent rules and regulations by the FDA (Food and Drugs Administration) for the approval of new products are also attributes escalating the growth of the vertical farming market in Germany. Along with this, increasing disposable income and people’s interest in organic products are enhancing the growth rate of the market. The convenience of growing crops in a multi-story building or warehouse is attracting consumers to adopt this technology.
The growth of the Italian market is majorly driven by rapid urbanization. Artificial intelligence is playing an important role in vertical farming. AI has the ability to track the development of the plant. These techniques enable the farmer to get complete details of the plant from irrigation to harvest, which further boosts the crop production rate. Robots integrated with artificial intelligence in vertical farming help in crop management. This technology also helps in controlling the temperature and lighting required for the crops. Thus, the demand for vertical farming in Italy is increasing at a robust rate.
The UK and Spain are attributed to showcasing prominent growth rates in the vertical farming market. Growing per capita income and increasing expenditure on organic-based food products are major factors that will help the market grow in these countries. Frequently changing environmental conditions are elevating the demand to adopt vertical farming techniques.
France is likely to have potential growth opportunities in the coming years.
Illumitex Inc., Aerofarms, Koninklijke Philips N.V., and Sky Greens are some of the leading players in the European vertical farming market.
This research report on the European vertical farming market is segmented and sub-segmented into the following categories.
By Growth Mechanism
By Structure
By Offering
By Crop Type
By Country
Frequently Asked Questions
Sustainable agriculture, increased urbanization, the demand for locally grown produce, and advancements in technology are some of the notable trends in the Europe vertical farming market.
High initial setup costs, energy consumption, and the need for market acceptance and regulation are some of the key challenges to the growth of the Europe vertical farming market.
Countries like the Netherlands, Germany, and the United Kingdom have a strong presence in the European vertical farming market.
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