Business Outlook for Indoor Farming Technology




Indoor farming technology is described as a practice to grow crops on a large/small scale completely indoors. The process is carried out with the aid of artificial environment conditions such as artificial light, temperature, and gases. According to the market database, this has resulted in an improved crop yield in limited space and water. Indoor farming techniques are unique and environmentally friendly. They restrict the use of chemicals such as pesticides and herbicides. Market research tools state that the growth in organic farming practices and the gradual eradication of agrochemicals is anticipated to boost this market’s growth


Market analysis suggests that different types of crops and plant cultivation are supported by the process. According to the market database, these include fruits & vegetables, herbs, microgreens, flowers, ornamentals, and others. Market research tools suggest that a greater shift towards indoor farming has resulted in increased acceptance by the commercial as well as household levels. Innovation in this market is driven by the upgrades in hardware and software components that improve crop quality, safety, and variety. The drivers for this sector can be studied using market intelligence platforms like Global Market Database. The cloud based market research platform studies the shift in line with changing market trends.


Growing System Nomenclature:


Indoor farming technology has utilized different crop growing techniques. According to the market database, these varieties of techniques require dedicated technological infrastructure in a customized manner to make the artificial environment conducive for optimum yield. Market research tools suggest that based on the growing system the market is divided into hydroponics, aeroponics, aquaponics, soil-based, and hybrid. The prominent segments with the maximum market share can be determined using market research platforms like Global Market Database.

According to the market database, the hydroponics vertical has experienced a greater share in the market as the requirements are easy to satisfy and provide an improved output. Market analysis suggests that the growing technique does not require the use of soil, instead, the roots of the plants are inserted in a nutrient solution such as perlite or gravel. Plants acquire the necessary soil-like nutrients from the dedicated solution and improve the quality.

Market database also indicates that the aeroponics vertical is expected to be a significant contributor in the coming years. Aeroponics is defined as the process to grow plants in a misty environment according to secondary research conducted via market research tools. No soil is required in the overall process. The plant roots are inserted in containers filled with plant nutrients which are ideal for oxygenation and moisture. Market database indicates that the process has allowed the growth of more plants in less amount of time. Less maintenance is required in the entire process which has resulted in reduced costs. Such a mix of factors has resulted in a buoyant business outlook for aeroponics.

Aquaponics is the fusion of aquaculture and hydroponics. According to market research, in this type of process, the crops are cultivated in water and at the same time fishes are bred. The effluents from fish are treated by microorganisms which help to produce the essential nutrients. The dispersed nutrients in the water are absorbed by the crops for growth and the water is recirculated in the fish tank to undergo the same process.

Market research tools suggest that the soil-based technique, the crops are grown in the presence of natural soil and are placed in a vertical scenario to utilize the space efficiently. According to market research performed on free market data, it is seen that the growth of the crops is supported by the artificial environment components which are governed by the dedicated hardware equipment. The hybrid growing system has utilized a mixture of the mentioned techniques. Crops are allowed to be stored and allowed to grow in a soil-based format or a completely different solution such as in hydroponics.


Breakdown by Component:

According to the market database, the indoor farming technology market is heavily dependent on the components that are used to fine-tune the operations. Market research tools segment the vertical broadly as, hardware and software components. According to market intelligence platforms, the hardware component type has commanded a greater share in the market as these components are responsible for the core functioning of the system.

Market research suggests that the hardware components are further divided as climate control systems, lighting systems, communication systems, sensors, system controls, irrigation systems, and others. The climate control systems need to be well developed as they manage and regulate the artificial environment required to optimum yield. According to the market database, climate control systems help to control the environment through chillers, heaters, air conditioners, humidifiers, air control fans, and others. The market penetration rate of these technologies can be studied using Global Market Database. The cloud based market research tools provide free market data across 600+ markets and 12 different industries.

Market database states that lighting systems act as the substitute for natural sunlight that is required for crop cultivation. According to market research tools, these systems control the intensity and irradiance of artificial light. Market database indicates that these systems are available in different frequencies which are dependent on the crop type. Communication systems are used to convey information from systems to human authorities. The increased integration of networks and connectivity amongst devices for smoother user interaction is one of the key demands of the market according to market research tools.

In the case of this technology, the market database suggests that the information is conveyed by different mediums such as phones, laptops, desktops, and others. Irrigation systems are another important element in the overall system as they are required to control the water supply and recirculation operations. A glitch in the irrigation system can harm the growth of the crops and restrain the water supply.

According to the market database, the software components vertical is expected to be the fastest-growing in the market. Market research suggests that this is due to the recent advancements in software technologies such as 5G, IoT, data analytics, cloud computing, Robot Process Automation (RPA), cybersecurity, and blockchain. According to the market database, these software parts are integrated with the hardware components to augment the performance of the system. The rise in 5G is expected to increase the communication between internet-enabled devices as per market research tools. Data analytics software requirements coupled with cloud networks are required to drive remote access along with the generation of insights. The storage and processing of data generated by the indoor farming framework have helped to twitch the required resources and provide the optimum solutions.


Classification Based on Facility:

Based on market research it is seen that indoor farming operations are supported by varied facility layouts. Market database states that the different types of facilities include greenhouse, indoor vertical farms, container farms, indoor Deep-Water Culture (DWC) systems. According to market research tools, the greenhouse type facility has witnessed a greater share in the market. Greenhouse or hot-house facility is made up of transparent material and is used to cultivate a variety of crops. According to the market database, the climatic conditions within the greenhouses are controlled by different hardware components to enhance the quality as well as the quantity of the produce. The business outlook is expected to stay positive for the greenhouse facility.


Market research tools state that indoor vertical farming has also contributed significantly towards market growth. The facility is fully enclosed and contains opaque rooms that make use of artificial lights. According to the market database, these systems are modular and are adjusted to fit in any type of building. Market research states that type produce generated by vertical farming includes lettuce, kale, spinach, strawberries, and herbs. According to secondary research performed via free market data, container facilities are a type of facility that makes use of ship containers to cultivate the crops.

The containers are equipped with the necessary hardware and software components to support the crop yield. Each container is kept isolated from the other and is used to grow dedicated crops. Indoor DWC type systems are unique and dedicated types of facilities that make use of individual reservoirs to grow the crops. The inclusion of this technology has changed the overall business outlook for the agriculture module. The roots of the plants are suspended in a well-oxygenated solution that is filled in the reservoir. According to market research tools, such type of systems requires greater maintenance costs.


Growth Catalysts of Indoor Farming technology:


Market database states that innovative method of farming introduced by indoor farming techniques has transformed the traditional approaches. According to market research tools it has provided greater yields in limited space and water. According to USDA free market data, in 2016, the average yield of tomatoes grown in greenhouse hydroponics was 10.59 pounds per square foot. The traditionally grown tomatoes provided 1.85 pounds per square foot. Hence, the use of hydroponics has improved the yield approximately by 472%. Market research states that such innovative techniques have helped to prevent the water to a great extent and have contributed towards an optimistic business outlook.


According to the market database, a greater amount of energy is required to power these facilities, the use of green energy has helped to bring down the costs and prove to be environment friendly. For instance, market research tools state that vertical farming operations require lights for 16 hours per day. Greater acceptance and innovation in terms of technologies such as IoT and data analytics have propelled the growth in this market. The drivers, restraints, and challenges for this sector can be studied through Global Market Database. The market research tool provides free market data and develops dynamic trends according to relevant market information. IoT-enabled devices have supported effective communication among the devices and generate useful insights to drive better decisions.


Market research states that a rise in research initiatives and government investments has led to a well-established indoor farming infrastructure in different countries. Through research conducted by the Lighting Research Center (New York), the impact of LED lighting on plants was studied and it is poised to support a positive business  outlook. Market research states that it is another factor that has contributed significantly is the reduction in arable farming land. According to the World Bank, the total arable land per capita has declined from 0.197 hectares in 2013 to 0.192 hectares in the year 2016.


The U.K Perspective:


Market database suggests that the country was one of the early adopters of indoor farming technology and since then has maintained a robust demand in this market. The business outlook for this region is expected to stay positive. Market research tools state that this is due to greater acceptance of smart farming solutions and a shift towards a healthy lifestyle in the wake of COVID-19. According to the market database, a well-developed technological ecosystem has provided the market players with the necessary equipment.

Market research tools state that the exit from the European Union (EU) by the U.K is expected to drive the farming output as the U.K has planned to reduce the dependency on imports. The change in the geopolitical scenario and its impact on the ongoing market trends can be studied using Global Market Database. The market research tool makes use of Dynamic Market Data as its core technology, i.e., the market information is updated every quarter.


Next-generation indoor farming startups have contributed towards innovation and transformation in the market. For instance, a new startup in the U.K in the year 2020, has envisaged opening more than 40 indoor vertical farms across the U.K in the next five years. A great number of indoor farming operations are also witnessed in the underground environment in the U.K.