Controlled Environment Agriculture Market

According to Stratistics MRC, the Global Controlled Environment Agriculture Market is accounted for $83.23 billion in 2022 and is expected to reach $162.53 billion by 2028 growing at a CAGR of 11.8% during the forecast period. Controlled Environment Agriculture is a modern technique of crop production that takes place in controlled environments such as greenhouses, vertical farms, and growth chambers, it aids in the reduction of crop risk from external pests, pollution, and harsh weather conditions. Furthermore, several crop production technologies, such as hydroponics, aeroponics, and aquaponics, are utilized in this methodology. These modern farming practices are great at reducing water waste and making the best use of nutrients.

According to the report of the Economic Times, in the pandemic and after the pandemic the lifestyle as well as eating behavior of humans are also changing and the consumption of food items or local foods are increased by 40-45% from the year 2021 to 2022.



Market Dynamics:

Driver:

Rising global food consumption

The world's population is expected to grow to almost 10 billion by 2025. It is getting increasingly difficult to meet the world's escalating food demand in a sustainable manner. As a result, in order to fulfill the growing population's food needs, the government and farmers are implementing more complex farming techniques such as hydroponics, aquaponics, aeroponics, solid-based systems, and other hybrid systems. The growing popularity of controlled environmental agriculture techniques is increasing the number of small and large indoor farms across the world, and these farms are also boosting the use of other supplies such as nutrients, growing media, and so on. Due to their proximity to urban centers, CEA producers around the world are establishing production facilities near urban consumers to capitalize on this trend.

Restraint:

High Initial Investment

The capital investment needed for infrastructure, equipment, technology, and operational costs can be substantial, and it may pose a barrier to entry for potential investors or limit the expansion plans of existing players. The significant upfront costs involved in establishing CEA facilities can deter potential investors, especially small-scale farmers or new entrants with limited financial resources. It can be challenging for these stakeholders to secure the necessary funding to set up and operate a CEA system effectively. Additionally, the ROI for CEA facilities may take a relatively longer time to realize due to the high initial investment. It can impact the decision-making process for potential investors, as they need to carefully evaluate the financial viability and payback period of their investment.

Opportunity:

Strong Demand for Local Foods

The world's population is rapidly increasing, as is the demand for local food. According to an Economic Times article, during and after the pandemic, humans' lifestyles and eating habits change, and consumption of food items or local cuisines increases by 40–45% from 2021 to 2022. The CEA market is expanding because farmers are focused on production centers that are close to metropolitan areas, which is advantageous and will allow them to stay current with farming methods in the agricultural industry.

Threat:

Lack of Awareness and Education

Many consumers, particularly those outside the agricultural industry, may have limited knowledge or understanding of controlled environment agriculture. They may be unaware of the benefits, processes, and technologies involved in CEA. This lack of awareness can create a barrier for CEA companies in terms of consumer acceptance and market penetration. Furthermore, without proper education, consumers may have misconceptions or misperceptions about CEA. They may associate it with artificial or unnatural farming practices, leading to concerns about food safety, nutritional quality, and taste. These misconceptions can create resistance or reluctance to accept CEA-grown produce. Thus, it is anticipated that the aforementioned factors will limit market growth throughout the forecast period.

Covid-19 Impact:

The COVID-19 epidemic interrupted the manufacturing of several items in the controlled environment agriculture business, resulting in a global lockdown. The major demand for controlled environment agriculture was previously observed in giant developed and developing countries such as the United States, Germany, Italy, the United Kingdom, India, and China, which are negatively impacted by the spread of the corona virus, thereby decreasing demand for controlled environment agriculture. Environment under control Agriculture manufacturers can only afford a lockdown for a few months before having to change their investment plans. For example, numerous market participants paused manufacturing for several weeks in order to cut costs. On the contrary, few players used employee layoffs to survive the COVID-19 health crisis.

The tomatoes segment is expected to be the largest during the forecast period

The Tomato segment is expected to account for largest share in the automotive market. Tomato is the leading segment in these markets and also accounted for the largest in the global market based on both traditional and CEA farming. The factors that are propelling the growth are that it is suitable for both outdoor and indoor use and helps fetch more value with a higher yield. Tomato is widely used, mostly in food processing, across the globe, and it also has larger exports. The tomatoes grown in the CEA often have better flavor profiles due to optimized nutrient availability and regulated growth conditions.

The hydroponics segment is expected to have the highest CAGR during the forecast period

During the anticipated period, the hydroponics segment market is expected to have the greatest CAGR. Hydroponics allows for precise control and efficient utilization of resources such as water, nutrients, and space. The closed-loop system in hydroponics minimizes water wastage, as the nutrient solution is recirculated and reused. It also allows for the precise delivery of nutrients to plants, optimizing their uptake and minimizing nutrient waste. Moreover, Hydroponics is highly adaptable to various environments, making it suitable for both urban and rural settings. Its ability to operate in a controlled environment enables year-round production and reduces reliance on traditional agricultural practices that may be limited by factors such as climate or soil conditions. These are the factors that propelling the segment in the market over the forecast period.

Region with largest share:

The Europe region market is estimated to witness the largest share of the global controlled environment agriculture market during the forecast period because of the leading key players such as Fresh Box and SP ZO Co., which also provide a wide variety of leading techniques for CEA farming. In this region, every farmer is adopting these techniques, such as intensive, conventional, and organic farming. Moreover, Europe places a strong emphasis on sustainability and environmental stewardship. The CEA market aligns well with this focus, as it enables resource-efficient farming practices, reduces chemical use, and minimizes the environmental impact of agriculture.

Region with highest CAGR:

Asia Pacific is projected to have the highest CAGR over the forecast period due to the rising demand for fresh produce, limited agricultural land, and increasing investment in sustainable farming practices. China, Japan, and Australia are key markets in the region. The Asia-Pacific region is home to a large and rapidly growing population. As urbanization increases and arable land decreases, ensuring food security becomes a significant concern. CEA offers a solution by enabling year-round production in controlled environments, reducing dependency on weather conditions and traditional farming methods.



Key players in the market

Some of the key players in Controlled Environment Agriculture Market includes AeroFarms, Alegria Fresh, Beijing IEDA Protected Horticulture, Everlight Electronics Co. Ltd., FarmedHere, Garden Fresh Farms, Gotham Greens, Green Sense Farms, Green Spirit Farms, Greenland, Grow Pod Solutions, IDEA Protected Horticulture, Indoor Harvest, Infinite Harvest, Jingpeng, Lufa Farms, Metropolis Farms, Mirai, Nelson and Pade, Inc., Nongzhong Wulian, Pentair Aquatic Eco-Systems, Inc., Plantagon, Sanan Sino Science, Scafil, Sky Greens, Sky Vegetables, Sundrop Farms, TruLeaf, Urban Crops and Vertical Harvest.

Key Developments:

In February 2023, AeroFarms and International Center for Biosaline Agriculture announced a collaboration wherein both firms will work towards R&D in the CAE systems, including AI, ML, and robotics.

In September 2022, Gathom Greens, in the Series E round, raised USD 310 Million. The organization plans to use this budget to help greenhouses under construction in Georgia, Texas and Colorado. There is also a plan for facility expansion in Illinois and Rhode Island. The organization also acquired FresH2O Growers Inc, which was the producer of leafy green salad products. The acquisition also includes a 540,000-square-foot hydroponic greenhouse which supplies grocery stores in the mid-Atlantic region. This helps the organization in expanding productivity and reach.

In August 2020, Lufa Farms announced the launch of their fourth commercial rooftop greenhouse at Saint-Laurent, the world's largest greenhouse. It helped the organization as the production capacity become doubled. This would help the organization expand its market share in the controlled environment agriculture market.

Product Types Covered:
• Flower
• Mushroom
• Strawberries
• Leafy Greens
• Tomato
• Cucumber
• Cannabis
• Pepper
• Other Product Types

Components Covered:
• Lighting Systems
• Heating Systems
• Growing Media
• Nutrients
• Other Components

Technologies Covered:
• Hydroponics
• Aeroponics
• Aquaponics
• Other Technologies

Applications Covered:
• Vegetable Cultivation
• Fruit Planting
• Other Applications

End Users Covered:
• Equipment Manufacturer
• Consultancy
• Retail Food Product Seller
• Other End Users

Regions Covered:
• North America
o US
o Canada
o Mexico
• Europe
o Germany
o UK
o Italy
o France
o Spain
o Rest of Europe
• Asia Pacific
o Japan
o China
o India
o Australia
o New Zealand
o South Korea
o Rest of Asia Pacific
• South America
o Argentina
o Brazil
o Chile
o Rest of South America
• Middle East & Africa
o Saudi Arabia
o UAE
o Qatar
o South Africa
o Rest of Middle East & Africa

What our report offers:
- Market share assessments for the regional and country-level segments
- Strategic recommendations for the new entrants
- Covers Market data for the years 2020, 2021, 2022, 2025, and 2028
- Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
- Strategic recommendations in key business segments based on the market estimations
- Competitive landscaping mapping the key common trends
- Company profiling with detailed strategies, financials, and recent developments
- Supply chain trends mapping the latest technological advancements

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