Plant Factory Market Size, Assessment, Revenues, Share, Growth, Trends, Competition, Industry Analysis, Actionable Insights Report; By Crop Type, By Facility Type, By Growing System, By Light Type, By Region and By Country; Outlook and Forecast, 2023 – 2030

Report Summary

The Global Plant Factory Market size was assessed at approximately USD 130 million in 2022 and is expected to achieve a valuation of about USD 240 million by 2030. This market growth trajectory represents a compound annual growth rate (CAGR) of approximately 8% during the forecast period.

The plant factory system represents a paradigm shift in modern agriculture, promising year-round high-quality crop production within a controlled and environmentally responsible framework. Its capability to surmount weather-related challenges and dedication to sustainability make it a game-changer in the farming industry.

The plant factory market is witnessing robust growth, driven by a confluence of crucial factors. These include the escalating demand for fresh produce, a focus on sustainable agricultural practices, and remarkable technological advancements in plant factory technology. Notably, the surging popularity of organic food, efficient vertical space utilization, and balanced energy consumption play pivotal roles in driving market growth during the forecast period. Additionally, the rise in urban population and widespread technology adoption further accelerates the upward trajectory of the plant factory market.

What is Plant Factory?

The plant factory is an advanced facility that revolutionizes the agricultural landscape by ensuring a consistent supply of high-quality crops and vegetables throughout the year. Plant factories are often referred to as Controlled Environment Agriculture (CEA) facilities. With precise control over the cultivation environment, including light, temperature, humidity, carbon dioxide concentration, and culture solution, growers gain the ability to meticulously plan their production, free from the uncertainties of weather fluctuations.

Plant factories have undergone significant advancements, boasting state-of-the-art technologies for climate control, supplemental lighting, irrigation management, and material handling, among others. These sophisticated control systems meticulously regulate internal conditions, optimizing temperature, humidity levels, and light intensity. Moreover, advanced communication technologies enable remote monitoring of crucial plant factory parameters, enhancing efficiency and precision.

Plant factories achieve crop production rates that surpass conventional outdoor cultivation by two to four times by wielding complete control over the internal environment. This exceptional efficiency is further amplified by the integration of multiple cultivation shelves in a multi-shelf system, facilitating mass crop production within a compact space. 

Beyond securing a stable food supply, plant factories unlock the potential for cultivating farm crops in areas previously deemed unsuitable for traditional agriculture. Emphasizing environmental consciousness, these factories substantially reduce water and nitrogen usage, ensuring optimal resource utilization and contributing to the establishment of sustainable agribusiness practices. In line with the Sustainable Development Goals (SDGs), plant factories present an influential solution for addressing the global food crisis and climate change concerns.

As concerns escalate over food security and diminishing arable land, the plant factory emerges as the ultimate solution. Empowering growers to cultivate crops irrespective of soil conditions, this groundbreaking technology guarantees consistent yields, mitigating risks and uncertainties. Such factors have played a pivotal role in the long-term expansion and widespread adoption of the Plant Factory Market.

What are the Plant Factory Market Segmentations and Bifurcations?

Plant Factory Market Segmentation based on Crop Type

• Vegetables
  • Tomatoes
  • Eggplants
  • Leafy Greens
  • Herbs & Microgreens
  • Other Vegetables
• Fruits
• Flowers & Ornamentals
• Other Crops

The plant factory market is categorized based on crop type, comprising vegetables, fruits, flowers and ornamentals, and others. Among these, the vegetable segment stands out as the leading contributor to the global plant factory market. It holds the largest share and is expected to maintain its growth momentum during the forecast period. This surge is fueled by the escalating demand for fresh, locally-grown vegetables.

The vegetable segment within the plant factory market encompasses a diverse range of crops, such as tomatoes, eggplants, leafy greens, herbs, and microgreens. Leveraging the controlled environment of plant factories, growers can meticulously fine-tune various critical factors, including temperature, humidity, light, and nutrients, to cater to the unique needs of each plant type. This capability enables them to create the ideal growing conditions for every vegetable variety, ensuring optimal growth and high-quality produce.

Plant factories ensure vegetables with consistent size, color, and taste, free from harmful pesticides and contaminants. Employing advanced hydroponics and aeroponics techniques allows efficient nutrient delivery to plant roots, reducing fertilizer reliance and enhancing uptake efficiency. As a result, produce from plant factories is safe and healthy, devoid of harmful chemical residues and contaminants, offering consumers sustainable and secure food options.

Plant Factory Market Segmentation based on Facility Type

• Indoor Farms
• Greenhouses
• Other Facility Types

The plant factory market is categorized based on facility type into indoor farms, greenhouses, and other facility types. Greenhouses and indoor farms are prominent segments, providing controlled environments for year-round crop cultivation. Greenhouse farming offers several advantages over traditional methods, with precise control over environmental factors leading to higher yields and improved quality. As growers witness these benefits, the interest in incorporating plant factory technology into their operations increases, driving demand for plant factory systems and technologies, fostering industry growth.

Indoor Farms, also known as vertical farming, held the second-largest market share. They offer year-round crop growth irrespective of weather conditions, reducing the risk of crop failures. The precise control of growing conditions leads to higher yields and improved crop quality. Moreover, indoor farming conserves water through recycling and closed systems. Other facility types encompass various setups such as shipping container farms, and modular farms, contributing to the diversification and projected growth of the plant factory market.

Plant Factory Market Segmentation based on Growing System

• Non-Soil based Systems
• Soil based Systems
• Hybrid Systems

The plant factory market is segmented based on the growing system into non-soil based systems, soil based systems, and hybrid systems. Among these, non-soil based systems are expected to dominate the global plant factory market during the forecast period. The growth can be attributed to several advantages, including higher yields, faster growth cycles, and better control over growing conditions. These systems utilize hydroponic or aeroponic methods, using nutrient-rich water instead of soil for plant growth. Non-soil-based systems are increasingly favored in urban areas and regions where traditional agriculture faces limitations. Their popularity stems from their ability to optimize crop production, making them a key driver in the advancement of modern agriculture.

Plant Factory Market Segmentation based on Light Type

• Fully Artificial Light
• Sunlight

The plant factory market is segmented based on light type into fully artificial light and sunlight. Among these, fully artificial light systems are gaining prominence in the global plant factory market. These systems utilize advanced technologies to provide artificial light that mimics natural sunlight, allowing year-round crop cultivation without dependence on natural sunlight. By controlling the light spectrum and intensity, plant factories can optimize plant growth, leading to higher yields and improved crop quality. Fully artificial light systems offer flexibility and efficiency, making them suitable for various crops and locations. While sunlight-based systems remain relevant for certain applications, the increasing demand for year-round production and the ability to tailor light conditions to specific plant needs drive the adoption of fully artificial light systems in the plant factory industry.

What are the Major Growth Drivers, Restraints, and Opportunities in the Plant Factory Market?

Growing Demand for Fresh Produce Fueling the Expansion of Plant Factory Market

Consumers are increasingly seeking fresh and locally sourced fruits, vegetables, and other crops that are free from harmful chemicals and pesticides. Plant factories offer a controlled environment for crop cultivation, ensuring consistent quality and year-round availability of fresh produce regardless of external weather conditions. This rising consumer preference for healthier and sustainable food options has significantly increased the adoption of plant factory methods among growers and investors. As the demand for fresh produce continues to grow, the plant factory market is expected to witness substantial growth in the coming years.

Technological Advancements Play a Pivotal Role in Plant Factory

Continuous innovations in agricultural technologies are revolutionizing the way crops are cultivated and managed within controlled environments. Plant factories are embracing cutting-edge solutions such as automation, robotics, artificial intelligence, data analytics, and precision farming techniques to optimize crop production and resource efficiency. By leveraging technological innovations, the plant factory market is meeting the challenges of modern agriculture, ensuring a consistent supply of high-quality produce, and contributing to food security in a rapidly changing world. As technology continues to evolve, the plant factory market is poised for further growth and advancements during the forecast period.

Significant Role of Sustainable Agriculture Practices in Driving Global Plant Factory Market Growth

Amidst growing environmental concerns and the imperative of ensuring long-term food security, the focus on sustainable and eco-friendly farming practices has intensified. Plant factories emerge as a viable solution, employing resource-efficient technologies to curtail water consumption, minimize pesticide usage, and optimize energy utilization. Through controlled environment agriculture, plant factories effectively mitigate the impact of external environmental factors, such as extreme weather conditions and land constraints. The adoption of sustainable practices within plant factories fosters biodiversity conservation, enhances soil health, and reduces greenhouse gas emissions. These principles of environmental responsibility and social accountability resonate with environmentally conscious consumers and stakeholders alike.

As the significance of sustainable agriculture gains global momentum, the plant factory market is poised to witness substantial growth, emerging as a pivotal contributor to a more sustainable and resilient food production system.

Higher Yield of Plant Factories has Boosted the Adoption

The high yield of plant factories stands out as a major driving force behind the growth of the plant factory market. These advanced facilities efficiently reduce farmers' resource consumption, making them an attractive choice for various stakeholders and thereby propelling market expansion. The controlled environment within plant factories fosters optimal growing conditions, encompassing precise light, water, and nutrient levels. Furthermore, their automation capabilities significantly reduce labor requirements, boosting overall efficiency. Additionally, their adaptability to urban areas, where land is scarce and expensive, further contributes to market growth.

While plant factories excel in producing high yields for specific crops, there are limitations in cultivating a diverse variety of crops efficiently. Certain crops demand more complex growing conditions or may not be economically viable for plant factory production.

Additionally, certain factors are hindering the growth of the market. These include high initial investment requirements, scarcity of skilled labor, and compliance with various regulations. Addressing these challenges will be crucial in facilitating the overall growth and development of the industry.

However, the forecast period presents numerous opportunities for players in the global plant factory market. Factors such as rising urbanization and land constraints, a surge in organic food consumption, increased adoption by HoReCa and grocery stores, climate challenges, and growing demand for floriculture and ornamental horticulture contribute to plant factory market expansion. Additionally, government support, research for new crop varieties, and expansion into new markets offer significant potential for plant factory industry growth and diversification.

Increasing Adoption of LED Lighting

The plant factory market is witnessing an emerging trend with the widespread adoption of LED lighting. LED lights offer an optimal light spectrum for efficient plant growth, promoting healthy development and higher crop yields. Compared to traditional lighting systems, LED lighting is significantly more energy-efficient, reducing operational costs and aligning with sustainability goals. Plant factories utilizing LED lighting can achieve year-round crop production, independent of external weather conditions, by creating controlled environments that mimic natural sunlight. The ability to customize light spectrum, intensity, and duration enhances cultivation precision and overall productivity. As LED lighting continues to gain traction, the plant factory market is poised for significant advancements in crop quality, production capacity, and resource optimization, contributing to a more sustainable and innovative approach to agriculture.

Growing Focus on Automation and Robotics in Plant Factories

The plant factory market is increasingly focusing on automation and robotics to improve efficiency and productivity. Automated systems control environmental factors such as temperature, humidity, and light for optimal crop growth. They handle tasks such as planting, watering, and harvesting, reducing manual labor and enhancing cost-effectiveness. Automation enables large-scale operations, increasing productivity and ensuring consistent crop yields. Precision minimizes errors, resulting in higher crop quality and meeting the demand for standardized produce. The growing adoption of automation and robotics is driving advancements in agricultural practices, benefiting both plant factory owners and consumers seeking high-quality products.

Development of New Crop Varieties

The plant factory industry is witnessing the development of new crop varieties tailored for growth within controlled environments. These specialized varieties exhibit increased tolerance to the unique conditions of plant factories, resulting in higher crop yields. As researchers and breeders focus on optimizing plant traits for these environments, plant factories can maximize their productivity and offer a wider range of crops to meet market demands. The advancement of new crop varieties promises to revolutionize agricultural practices and further propel the growth of the plant factory market.

What are the Regional and Country Trends in the Global Plant Factory Market?

Plant Factory Market: Regional Segmentation Analysis and Outlook

• North America
• Europe
• Asia Pacific
• Middle East and Africa
• South America

The global plant factory market is segmented by region into Europe, North America, Asia Pacific, Middle East and Africa, and South America. In 2022, Europe emerged as the leader in the market. The growth in this region is propelled by various factors, such as the increasing demand for locally grown produce, strong government support, technological advancements, environmental consciousness, and rising consumer preference for sustainable and locally sourced food. Many European countries have implemented policies and initiatives that promote the adoption of sustainable agricultural practices, including plant factories. Notably, the European Union's Horizon 2020 program has allocated substantial funding for research and innovation in sustainable agriculture, including plant factory technology. Moreover, several countries offer tax incentives and benefits to growers embracing these practices.

North America is a thriving hub for a diverse range of plant factory companies, encompassing startups and well-established players alike, all united by their commitment to creating and expanding innovative solutions to meet the escalating demand for fresh and high-quality produce. According to the Agricultural Marketing Resource Centre's 2021 report, greenhouse crops rank among the top 10 commodities in 42 states and the top five commodities in 27 states in the U.S. Impressively, 10 states contribute to over two-thirds of the nursery crop output cultivated in greenhouses, with California alone accounting for approximately 20% of the total. Greenhouse farming is gaining popularity in the United States as an efficient method to produce local, fresh vegetables year-round, unaffected by weather conditions.

Asia Pacific is poised to register the fastest growth rate in the global plant factory market. This accelerated expansion can be attributed to the large and ever-growing population, which drives a robust demand for fresh and high-quality produce. Major industry players in the Asia Pacific are strategically focusing on continuous innovation to fortify their market position. They leverage cutting-edge technologies, including machine learning, LED-grow light, dynamic resource allocation, AI, and edge computing, to optimize plant growth and boost productivity. The upsurge in demand for organic food, coupled with changing consumer preferences, increasing pollution, food scandals, and growing health consciousness, further contribute to the region's burgeoning interest in plant factory solutions.

The Middle East and Africa region is also witnessing growth in the plant factory market as various countries in MENA are planning, constructing, and operating plant factories owing to food scarcity, limited arable land, and favorable government support for alternative farming methods including plant factories. Countries such as UAE, Saudi Arabia, and Israel are some of the major players in this region.

How is the Competition Scenario in the Plant Factory Market?

Plant Factory Market: Competitive Landscape

The competitive landscape of the plant factory market is fragmented due to the presence of a large number of small, medium, and large enterprises. Players are mostly categorized as plant factory operators, plant factory fabricators/constructors, and plant factory equipment providers. Some of the major players operating in the plant factory market include AeroFarms, Agricool, AppHarvest, Badia Farms, Bowery Farming, BrightFarms, CropOne, Dream Harvesting Farming Company, Farm.One, Gotham Greens, Iron Ox, Kalera, Lufa Farms, Metropolis Farms, Mirai, Oishii, Parus Europe, Plenty Unlimited, Ryoden Corporation, Sky Greens, Vertical Harvest, and others.

Plant Factory Industry Developments 

• In March 2023, BrightFarms expanded with four new regional greenhouse hubs that provide sustainably grown leafy greens to more people in the Eastern and Central United States.

• In February 2023, the Public Investment Fund signed a joint venture agreement with AeroFarms to establish a company in Riyadh, for building and operating indoor vertical farms in Saudi Arabia and the wider Middle East and North Africa region.

• In February 2023, Realty Income Corporation and Plenty Unlimited entered into a strategic real estate alliance to support the development of Plenty's indoor vertical farms.

• In September 2022, MIRAI entered into agreement with ONNNA Greens AS for the cultivation equipment for a fully closed artificial light-type plant factory for the second expansion phase, in addition to the factory already in operation.

• In December 2021, Gotham Greens opened the initial phase of its 10-acre hydroponic greenhouse near the University of California-Davis campus. With this national greenhouse expansion, Gotham Greens had a network of high-tech hydroponic greenhouses spanning nine facilities in six states.

• In June 2021, AppHarvest finalized the financing agreement with Rabu Agri Finance to expand the high-tech indoor farm network.

• In October 2020, Plenty Unlimited entered joint development agreement with Driscoll's, using its indoor vertical farming to grow Driscoll's proprietary flavorful strawberries year-round.