As the world grapples with food insecurity, climate change, urbanization, and resource depletion, vertical farming (VF) has emerged as both a technological marvel and a financial puzzle. By growing crops in stacked layers within climate-controlled environments, VF offers the promise of a more resilient food system—one that uses less land, less water, and produces food closer to consumers. Yet, despite billions in investments, the industry remains constrained by high operational costs, limited scalability, and energy-intensive production.
From 2025 to 2035, the trajectory of vertical farming will be shaped by a confluence of geopolitical, economic, technological, and environmental factors. While some regions will see rapid adoption, others will struggle to integrate VF into their agricultural systems. This article employs scenario analysis—a strategic forecasting tool—to explore multiple plausible futures for vertical farming globally, providing a continent-by-continent perspective that investors, policymakers, and operators can use to navigate an uncertain decades.
The State of Vertical Farming in 2025
Market Overview
The global vertical farming market is valued at $5.5 billion in 2024 and is projected to reach $20 billion by 2030, growing at a CAGR of 25% (Grand View Research, 2024). However, its current footprint remains small, accounting for less than 1% of global vegetable production.
VF’s primary success stories remain in high-income, urbanized markets, where consumer demand for locally grown, pesticide-free produce justifies the high costs. Yet, even in these regions, failures such as AeroFarms, Fifth Season, and Bowery Farming in the U.S. highlight the industry’s fragility. Meanwhile, expansion into emerging markets is constrained by infrastructure limitations and lower purchasing power.
Crops and Pricing Limitations
Vertical farming (VF) has primarily focused on cultivating microgreens, leafy greens, herbs, and, to a lesser extent, strawberries. These crops are well-suited to controlled environment agriculture due to their short growth cycles and high market value.
Global Production and Market Dynamics
- Microgreens: The global microgreens market was valued at approximately $1.8 billion in 2022 and is projected to reach $2.6 billion by 2031, growing at a CAGR of 11% during the forecast period. (straitsresearch.com)
- Leafy Greens and Herbs: While specific global production data for leafy greens and herbs within vertical farming systems is limited, these crops constitute a significant portion of VF outputs due to their compatibility with indoor cultivation methods.
- Strawberries: Strawberries are less commonly produced in vertical farms due to their more complex cultivation requirements and longer growth cycles. However, advancements in VF technologies are gradually making strawberry cultivation more feasible.
Pricing Comparison in North America
In North America, the cost of producing fresh greens varies significantly across different farming methods:
- Conventional Outdoor Farming: Approximately $0.65 per pound.
- Hydroponic Greenhouse Farming: Around $2.33 per pound.
- Vertical Farming: Approximately $3.07 per pound.
These figures indicate that vertical farming is currently more expensive than traditional methods, primarily due to higher energy and infrastructure costs. (agfundernews.com)
Key Global Trends Affecting Vertical Farming (2025–2035)
1. Climate Change and Resource Scarcity
- By 2035, over 50% of the world's population will live in water-stressed regions (World Resources Institute, 2024).
- Extreme weather events, soil degradation, and desertification will increase the need for climate-resilient farming methods.
2. Urbanization and Changing Consumer Preferences
- By 2030, 68% of the global population will reside in cities (UN, 2024).
- The rise of functional foods, food traceability, and farm-to-table movements will fuel demand for premium, locally grown produce.
3. Energy Costs and Sustainability
- VF remains 4–10x more energy-intensive than traditional greenhouse farming (CEA Global Census, 2023).
- Adoption of renewable energy solutions and energy-efficient LEDs will be critical to profitability.
4. Policy and Government Support
- Some regions, particularly Europe and Asia, will introduce carbon credits, water efficiency incentives, and urban food production mandates to support VF.
- In contrast, regions with subsidized field agriculture (e.g., parts of North America and Latin America) will pose challenges to VF’s competitiveness.
Scenario Analysis for Vertical Farming (2025–2035)
Scenario analysis helps us explore different futures by analyzing key uncertainties—such as energy prices, technological advancements, climate policy, and consumer demand—and constructing plausible narratives for each.
Main Question:
"How will vertical farming scale globally between 2025 and 2035, and what factors will determine its success or stagnation across different regions?"
Using a two-axis framework, this analysis focuses on:
- Economic Viability (Low vs. High) → Can VF compete with field and greenhouse agriculture on cost?
- Policy and Market Adoption (Low vs. High) → Will governments and consumers support VF adoption through subsidies, incentives, or demand shifts?
This results in three global scenarios for 2025–2035:
- Scenario 1: Technological Renaissance – VF thrives due to cost reductions and widespread government support.
- Scenario 2: Urban Luxuries, Rural Realities – VF remains a niche, high-end product limited to premium urban markets.
- Scenario 3: Crisis-Driven Expansion – Climate shocks force widespread adoption of VF despite high costs.
Scenario 1: Technological Renaissance (Best-Case Scenario, 2035)
Key Developments
- Automation and AI-driven farming reduce labor costs by 50%.
- LED energy efficiency improves by 30%, cutting electricity costs significantly.
- Crop genetics optimize yields for indoor environments, expanding VF beyond leafy greens.
- Governments in Europe, Asia, and the Middle East offer carbon credits and urban agriculture incentives.
- Renewable energy integration enables off-grid VF operations in regions with unreliable electricity.
Regional Implications
- North America 🇺🇸🇨🇦 → VF expands into strawberries, tomatoes, and medicinal crops, competing with greenhouses.
- Europe 🇪🇺 → Policy-driven incentives make VF a key player in urban food security, supported by strict carbon regulations.
- Asia 🇨🇳🇯🇵🇸🇬 → China and Singapore lead mass adoption, with Japan and South Korea advancing high-tech indoor farms.
- Middle East 🇦🇪🇸🇦 → Desert regions embrace VF for food security and water conservation.
- Latin America & Africa 🇧🇷🇿🇦 → VF gains traction in megacities but struggles in rural areas due to high costs.
Outcome:
Vertical farming becomes a mainstream food production method, securing a 10% market share in global vegetable supply by 2035.
Scenario 2: Urban Luxuries, Rural Realities (Baseline Scenario, 2035)
Key Developments
- VF remains a niche industry, supplying premium grocery chains, high-end restaurants, and luxury markets.
- Energy costs remain high, limiting expansion outside affluent urban centers.
- Field and greenhouse farming continue to dominate global food supply.
Regional Implications
- North America & Europe 🇺🇸🇨🇦🇪🇺 → VF remains high-end, thriving in wealthy urban markets but failing to scale.
- Asia & Middle East 🇨🇳🇯🇵🇸🇬🇦🇪 → Localized success in government-backed projects but limited global impact.
- Latin America & Africa 🇧🇷🇿🇦 → Minimal adoption due to cost constraints and competition from field agriculture.
Outcome:
VF captures 3–5% of global vegetable production, concentrated in wealthy urban centers.
Scenario 3: Crisis-Driven Expansion (Worst-Case Scenario, 2035)
Key Developments
- Climate disasters (droughts, heatwaves) devastate field agriculture, forcing rapid investment in VF.
- Energy costs remain high, but food security pressures drive government funding.
- Consumers pay premiums for reliable food supply amid geopolitical instability.
Regional Implications
- North America & Europe 🇺🇸🇪🇺 → Governments subsidize VF as a national security priority.
- Asia & Middle East 🇨🇳🇯🇵🇦🇪 → Rapid VF expansion, especially in climate-vulnerable megacities.
- Latin America & Africa 🇧🇷🇿🇦 → Government-backed VF projects emerge, but cost barriers remain.
Outcome:
VF becomes a necessity rather than a luxury, expanding out of urgency rather than economic competitiveness.
Likelihood of Scenario Outcomes
Assessing the likelihood of the previously discussed scenarios for vertical farming from 2025 to 2035:
- Technological Renaissance: Moderate Likelihood. While technological advancements are expected, the rate of innovation and adoption will vary by region, influenced by economic and policy factors.
- Urban Luxuries, Rural Realities: High Likelihood. Given current cost structures and market dynamics, VF is likely to remain concentrated in affluent urban areas where consumers are willing to pay premium prices for fresh, locally produced greens.
- Crisis-Driven Expansion: Low to Moderate Likelihood. While climate change and resource scarcity could drive VF adoption, significant expansion would require substantial policy support and investment to overcome economic barriers.
Strategic Recommendations (2025–2035)
For Policymakers
Governments should create urban agriculture policies, offering tax incentives for VF operators and integrating VF into climate resilience strategies. Investing in renewable energy infrastructure will also make VF more viable.
For Operators
VF companies must prioritize energy efficiency and target high-margin crops (functional foods, pharmaceuticals). Scaling too quickly has already led to failures—gradual expansion in strategic urban hubs is key.
For Investors
Investors should diversify beyond farm operators, funding supporting technologies like AI, automation, and LED innovation. Due diligence should include scenario-based market research to assess long-term viability.
The Global Outlook for Vertical Farming in 2035: A Regional Perspective
By 2035, vertical farming (VF) will remain a niche but expanding industry, primarily focused on leafy greens, herbs, microgreens, and some berries. Its viability will depend on energy costs, climate policies, urbanization rates, and government incentives. While some regions will integrate VF into their food systems, others will struggle due to high operational costs and competition from greenhouses and field farming.
North America: Slow but Targeted Growth
VF in North America will be concentrated in urban centers and climate-stressed regions like the U.S. Southwest and parts of Canada. Expansion will occur where premium consumer demand is strong and water scarcity makes field farming less viable. However, high energy costs and competition from high-tech greenhouses will limit widespread adoption. Best-case market share of fresh greens: 5–10%.
Europe: Policy-Driven Expansion with Renewable Energy Integration
Europe will be the global leader in VF adoption, driven by carbon policies, urban food security initiatives, and strong consumer demand for local food. However, given VF’s high energy use, its expansion will depend on affordable renewable energy. Northern and Western Europe will lead, while Southern and Eastern Europe will see limited adoption. Best-case market share of fresh greens: 10–15%.
Asia: Government-Backed Growth in High-Density Cities
China, Japan, Singapore, and South Korea will continue to invest in VF as part of food security strategies, particularly in megacities with limited arable land. However, energy costs will constrain profitability in regions dependent on fossil fuels. Best-case market share of fresh greens: 5–15%, highest in dense urban hubs.
Middle East & North Africa (MENA): A Necessity in Water-Stressed Regions
In Gulf states like the UAE and Saudi Arabia, VF will be heavily subsidized as a food security strategy due to extreme water scarcity. However, energy costs and reliance on desalinated water will limit expansion beyond high-income areas. In North Africa, VF will struggle against low-cost field farming. Best-case market share of fresh greens: 5–10% in Gulf cities, <3% elsewhere.
Latin America & Africa: Minimal Adoption Due to Cost Barriers
VF will struggle to scale in Latin America and Africa due to abundant farmland, lower labor costs, and favorable outdoor growing conditions. Some urban, high-income markets may support small VF operations, but broad adoption is unlikely. Best-case market share of fresh greens: <5%.
Final Assessment and Conclusion: The Path to 2035
VF will not replace traditional agriculture but will fill specific gaps in high-income, urban markets and water-scarce regions. Its future depends on renewable energy integration, technological cost reductions, and supportive policies—without these, its economic viability remains limited.
Vertical farming will not replace traditional agriculture, but its role in urban food security, climate resilience, and premium produce markets will continue to grow. Whether it thrives as a mainstream production method or remains an urban luxury will depend on energy innovation, policy incentives, and economic competitiveness. By using scenario analysis, stakeholders can better navigate the decade ahead, making smarter investments and policy choices in a rapidly evolving food system.
Further reading:
Controlled Environment Agriculture - Greenhouses
Controlled Environment Agriculture in the Mediterranean: A Sustainable Future
The Problem of Humidity in Greenhouses: Causes, Effects, and Solutions
10 Proven Ways to Make Greenhouse Crop Production More Sustainable and Efficient
Protected Cultivation: Boosting Yields and Sustainability in Modern Agriculture
Vertical Farming vs. Traditional Agriculture
Optimizing Lighting and Environmental Conditions for Indoor Baby Kale Growth