Indoor Farming Market: Key Trends Driving Investment and Forecast to 2033

Market Overview:

According to IMARC Group's latest research publication, "Indoor Farming Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2025-2033", The global indoor farming market size reached USD 22.3 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 47.2 Billion by 2033, exhibiting a growth rate (CAGR) of 8.6% during 2025-2033.

This detailed analysis primarily encompasses industry size, business trends, market share, key growth factors, and regional forecasts. The report offers a comprehensive overview and integrates research findings, market assessments, and data from different sources. It also includes pivotal market dynamics like drivers and challenges, while also highlighting growth opportunities, financial insights, technological improvements, emerging trends, and innovations. Besides this, the report provides regional market evaluation, along with a competitive landscape analysis.

How AI is Reshaping the Future of Indoor Farming Market

• AI-powered sensors and IoT devices enable real-time monitoring of crop health, environmental conditions, and nutrient levels, optimizing growing parameters for higher yields and quality.
• Machine learning algorithms analyze vast datasets to predict optimal harvest times, reducing waste by up to 15% and ensuring consistent supply chains.
• Automation systems including robotic arms and conveyor belts reduce labor costs by performing planting, harvesting, and sorting tasks, making indoor farming more economically viable with the USDA reporting a 7% increase in farm wages.
• AI-driven climate control systems regulate temperature, humidity, and CO2 levels with precision, creating ideal growing conditions year-round while minimizing energy consumption.
• Vertical farming technologies powered by AI maximize space utilization through automated vertical racks, allowing cultivation of crops in layers and increasing production efficiency in urban areas.
• Companies are experimenting with AI-customized light recipes tailored to specific crops using LED technology, with predictions showing the North America LED lighting market reaching USD 43.2 Billion by 2032.

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Key Trends in the Indoor Farming Market

• Rising Demand for Sustainable Food Production: Global searches for sustainable products increased by 71% over five years, with consumers willing to pay 9.7% more for sustainably produced items. Indoor farming reduces environmental impact by minimizing water usage, pesticides, and transportation distances.
• Urban Farming and Local Food Production: Indoor farms located near metropolitan areas provide fresh, high-quality vegetables with lower carbon footprints, addressing concerns about long-distance shipping and reducing food miles significantly.
• Year-Round Crop Production: Controlled environment agriculture enables continuous production regardless of harsh weather conditions or seasonal changes, particularly benefiting regions with challenging climates or minimal farmable land like the Middle East.
• Advanced Growing Technologies: Hydroponics, aeroponics, and aquaponics enable soilless crop cultivation, decrease water consumption, and facilitate year-round production. Container farms offer modular, easily deployable units ideal for urban farming.
• Vertical Farming Innovation: Singapore's Sky Greens produces 1 metric ton of vegetables daily using 9-meter-high A-shaped towers, achieving 10 times more output than traditional farming while saving 95% of water and reducing transportation costs.

Growth Factors in the Indoor Farming Market

• Technological Advancements and Automation: Integration of AI, IoT, and automation enhances efficiency, cuts labor expenses, and optimizes resource usage. Robotic systems perform planting, harvesting, and packaging tasks, reducing operational costs.
• Growing Investment and Expansion: Venture capital funding supports startups developing cutting-edge technologies. In September 2024, the world's first AI-powered vertical berry farm opened in Richmond, Virginia, showcasing scalable innovation.
• Government Support and Incentives: Governments worldwide offer financial incentives, tax breaks, and grants to encourage indoor farming. The EU's Farm to Fork Strategy funds operations covering 15 million hectares of organic farming.
• Food Security Concerns: As arable land decreases and environmental issues like soil degradation and water scarcity worsen, indoor farming provides controlled settings for efficient food production, serving as a viable solution to increased demands.
• Preference for Organic and Pesticide-Free Products: Indoor farming technologies allow production in controlled, chemical-free environments, meeting consumer demand for organic, non-GMO goods. The US organic food market is expected to reach USD 158.2 Billion by 2032.

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Leading Companies Operating in the Global Indoor Farming Market Industry:

• AeroFarms
• Autogrow
• BrightFarms
• Certhon
• Freight Farms, Inc
• Fujian Sananbio Technology Co., Ltd
• iFarm
• Logiqs B.V.
• Plenty Unlimited, Inc.
• Sky Greens Canada
• Urban Crop Solutions
• Vertical Growth
• Voeks Inc.

Indoor Farming Market Report Segmentation:

Analysis by Facility Type:

• Greenhouse
• Indoor Vertical Farms
• Container Farms
• Indoor Deep Water Culture
• Others

Greenhouses lead the market in 2024 with 47.0% share, offering controlled environments for year-round cultivation, energy efficiency, and sustainability.

By Crop Type:

• Fruits, Vegetables and Herbs

o Lettuce

o Spinach

o Kale

o Tomato

o Herbs

o Bell and Chilli Peppers

o Strawberry

o Cucumber

o Others

• Flowers and Ornamentals

o Annuals

o Perennials

o Ornamentals

o Others

• Others

Fruits, vegetables, and herbs dominate with 96.5% market share, benefiting from controlled conditions that ensure year-round availability of fresh produce.

By Component:

• Hardware

o Structure

o LED Lights

o HVAC

o Climate Control System

o Irrigation Systems

o Others

• Software

o Web-based

o Cloud-based

Hardware accounts for 89.2% of the market share, encompassing essential infrastructure like structures, LED lights, HVAC systems, and irrigation systems for optimal growing conditions.

By Growing System:

• Aeroponics
• Hydroponics
• Aquaponics
• Soil-based
• Hybrid

Soil-based systems hold 41.6% market share, favoring traditional methods that utilize natural soil, appealing to growers seeking organic and chemical-free produce.

Regional Insights:

• North America (United States, Canada)
• Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, Others)
• Europe (Germany, France, United Kingdom, Italy, Spain, Russia, Others)
• Latin America (Brazil, Mexico, Others)
• Middle East and Africa

North America captures 36.9% of the market share in 2024, driven by growth in indoor farming, particularly in the U.S. and Canada, focusing on sustainability and controlled environment agriculture.

Recent News and Developments in Indoor Farming Market

• May 2025: 80 Acres Farms significantly expanded its operational footprint through the acquisition of three indoor vertical farming facilities from competitor Kalera, which bolsters 80 Acres’ production capacity in key US markets including Georgia, Texas, and Colorado. The move signals a major trend of consolidation within the vertical farming sector, with established, well-funded players absorbing assets from distressed or less-efficient rivals to achieve greater scale and market dominance.
• August 2025: Saffron Tech successfully closed an equity crowdfunding round to finance its expansion, following its earlier $1.3 million raise in 2023, showcasing continued investor confidence in high-value, niche indoor crops despite broader market volatility. This targeted funding highlights a strategic market shift as indoor farms move beyond commodity leafy greens to specialty, high-profit botanicals, offering a stronger path to profitability and return on investment.
• September 2025: Hydrofarm Holdings, a key supplier of hydroponic equipment and supplies, announced a strategic shift to focus on selling its higher-margin proprietary brands and implemented a cost-restructuring plan to narrow losses after experiencing a slump in sales in the first half of the year. The company's actions reflect the industry-wide pressure to improve financial performance and operational efficiency, indicating that suppliers are adapting their business models to better serve the increasingly cost-conscious CEA (Controlled Environment Agriculture) market.

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