Key Takeaways
- Vertical farming grows crops in stacked layers within controlled environments.
- By utilizing vertical space, this method can boost land-use efficiency, making it possible to grow more food per square foot—particularly valuable in urban and high-density regions. Water usage can be minimized through closed-loop irrigation systems, and the controlled environments drastically reduce the need for synthetic pesticides, promoting cleaner crop production.
- Despite its benefits, vertical farming faces notable hurdles such as substantial upfront investment in infrastructure, high operational costs tied to energy consumption for lighting and climate control, and a narrow range of economically viable crops.
- In response to these challenges, recent innovations have targeted cost-reduction strategies, explored the integration of vertical farms with greenhouse models, and expanded production to include crops beyond leafy greens to improve scalability and profitability.
- Vertical farming is increasingly recognized as a key component of the AgTech sector, supporting global efforts to build resilient food systems, particularly in areas where traditional agriculture is limited by space, climate, or resources.
What is Vertical Farming?
Vertical farming is an agricultural method that involves growing crops in vertically stacked layers, often in controlled indoor environments. This method utilizes techniques such as hydroponics, aeroponics, and aquaponics, which enable consistent food production with controlled resource use.
While the concept of cultivating food in tall structures can be traced back to early visions like those published in Life Magazine in 1909—featuring vertically stacked homesteads and theoretical skyscrapers envisioned as utopian food production sites—architectural proposals began materializing throughout the 20th century. Early contributions included Le Corbusier’s Immeubles-Villas (1922), SITE’s Highrise of Homes (1972), and tower hydroponicums documented in The Glass House by John Hix. Armenia was home to some of the first operational tower hydroponic units, marking practical beginnings for vertical food cultivation systems.
Technological developments in greenhouse and hydroponic systems set the stage for vertical farming as it is known today. Visionary architects like Ken Yeang and design studios like MVRDV proposed bioclimatic skyscrapers and urban farming towers through the 1990s and early 2000s. These works bridged the gap between architecture and agriculture, influencing the design of food-producing buildings in metropolitan areas.
The concept of vertical farming gained significant traction in 1999, when Dickson Despommier, a microbiologist and ecologist, reopened the topic with his graduate students. He proposed that a 30-story vertical farm could potentially feed 50,000 people by growing crops on upper floors and raising fish and poultry on lower levels. Although some of his assumptions about energy use have been debated, Despommier’s work helped popularize the concept globally. His 2010 book, The Vertical Farm, became foundational to discussions of urban agriculture, food security, and sustainable innovation.
Is Vertical Farming More Sustainable than Traditional Farming?
The industry presents several sustainability advantages, including efficient land use, lower water consumption, and reduced pesticide reliance. However, the conversation around vertical farming’s environmental impact is increasingly complicated by the rise of greenwashing—a practice where misleading claims are made about environmental benefits. As highlighted by Henry Gordon-Smith during COP28, vertical farming companies sometimes exaggerate claims of sustainability, particularly in areas like energy efficiency and water usage, often without providing transparent data.
The 2021 CEA Census revealed that while 70% of respondents claimed to track water use, only 40% could provide credible data. Similarly, although 62% reported tracking energy consumption, just 28% submitted verifiable numbers, and even fewer provided breakdowns by farm use. Such discrepancies hinder the industry’s credibility and obscure the genuine progress being made.
Furthermore, tools like Agritecture’s CEA Sustainability Communications Guide emphasize that greenhouses typically consume significantly less energy than vertical farms—up to 86% less kWh per kg of product—raising important considerations about energy sourcing and operational efficiency. Despite these challenges, vertical farming still holds potential, particularly in its ability to reduce food miles and improve yield per square foot. Real progress will require companies to back environmental claims with evidence, avoid vague or inflated statements, and promote honest, data-driven communication about their sustainability performance.
Which Crops Thrive in Vertical Farms?
VF are most effective for crops such as leafy greens, herbs, aromatics, and microgreens, which have consistently demonstrated commercial viability in controlled environments. Real-world success stories include operational farms in urban centers and remote regions.
Fruiting crops such as strawberries and tomatoes have also been grown with some success, although efforts to scale production remain nascent. There are notable, though limited, examples of small operations achieving success with fruiting crops in constrained environments, including container farms on remote islands.
Meanwhile, root vegetables and staple crops like wheat and rice are still in the research phase due to their high space and energy requirements, which make current vertical systems less practical for large-scale production. A few agroforestry projects have begun leveraging vertical farming to grow sprouts and seedlings as part of broader, integrated systems. Early results from these initiatives are extremely promising, showcasing how vertical farming can support reforestation efforts and biodiversity conservation by providing a reliable, efficient method for early-stage plant development in controlled environments.
Vertical Farming vs. Traditional Farming
Key Differences
- Land Usage: Vertical farming uses less land by utilizing stacked layers.
- Water Consumption: Some systems use significantly less water than traditional methods.
- Pesticide Use: Controlled environments may reduce the need for pesticides.
- Production Cycles: Climate control allows for year-round crop cultivation.
Compared to traditional farming, which depends on seasonal cycles and external weather conditions, vertical farming provides an alternative approach to food production that is independent of these factors.
Core Principles and Techniques of Vertical Farming
- Hydroponics Hydroponic systems grow plants in nutrient-rich water solutions, eliminating the need for soil and allowing for controlled nutrient management.
- Aeroponics Aeroponics involves suspending plant roots in air while misting them with nutrients, which can lead to higher growth efficiency and reduced water use.
- Aquaponics Aquaponic systems combine fish farming with hydroponics, where fish waste provides nutrients for plants, creating a closed-loop system.
- Fogponics Fogponics is a variation of aeroponics where plant roots are exposed to a fine mist or fog composed of nutrient-rich water droplets. This technique improves nutrient absorption and root oxygenation, and it is being explored for its potential to optimize growth rates and resource efficiency in high-density farming systems.
Key Technologies and Infrastructure in Vertical Farming
- Lighting Systems LED grow lights provide artificial light that supports plant growth, compensating for the lack of natural sunlight in indoor environments.
- Climate Control and Automation Sensors and automated systems help maintain temperature, humidity, and CO₂ levels for optimized plant growth conditions.
- Structural Design Modular and stacked farm structures allow vertical farming to adapt to different urban settings and available spaces.
- Software and Monitoring Real-time data tracking systems help monitor plant health and optimize resource usage.
Can Vertical Farming Solve Global Food Shortages?
Vertical farming has the potential to contribute to food security by producing food in urban areas and regions with limited arable land. However, it cannot single-handedly solve global food shortages. Instead, it is one of many tools in a growing toolbox of AgTech solutions aimed at improving food production, sustainability, and efficiency.
What are the Advantages of Vertical Farming
- Efficient Land Use Stacked growing layers allow for increased crop production within a smaller footprint.
- Water Conservation Some vertical farming systems use up to 98% less water compared to conventional agriculture.
- Reduced Pesticide Use Controlled environments may reduce or eliminate the need for chemical pesticides.
- Year-Round Production Climate control enables continuous food production, reducing dependency on seasonal factors.
- Localized Food Production Establishing farms in urban areas can shorten supply chains and improve food freshness.
What are the Challenges of Vertical Farming
The segment faces several challenges that impact its widespread adoption and long-term viability. One of the most significant barriers is the high initial investment required for infrastructure and technology, which can make entry into the market difficult. Additionally, the dependence on artificial lighting and climate control systems results in substantial energy consumption, raising concerns about operational costs and sustainability.
Another challenge lies in crop limitations, as certain staple crops, such as wheat and rice, are not yet well-suited to the current technology. Instead, the industry primarily focuses on leafy greens, herbs, and some fruits. Finally, managing a farm requires specialized expertise in areas such as hydroponic systems, climate control, and automation, making operational complexity another hurdle that needs to be addressed for wider adoption.
What is the Current State of Vertical Farming
Vertical farming has undergone significant changes in recent years. The industry experienced a correction, with several high-profile companies either ceasing operations or scaling back, including Bowery Farming, Plenty, Jones Food Company, and Kalera. High operational costs, energy consumption, and challenges in achieving profitability contributed to these difficulties.
However, since the end of 2023, the industry has seen a resurgence, with new business models focusing on cost efficiency, diversified crop production beyond leafy greens, and integrations with greenhouse systems. Companies are increasingly prioritizing scalable and financially sustainable operations, further validating vertical farming as a component of modern agriculture. While there has been a rebound in investment—reaching nearly $600 million in 2024—this growth has been highly concentrated. A significant portion of the capital raised came from a handful of large funding rounds, such as Oishii’s $150 million raise or GrowUp‘s $50M round.
Where is Vertical Farming Growing?
Several global hubs have emerged as key centers for vertical farming due to their combination of policy support, technological advancement, and food security needs:
- United States: Cities such as New York, Chicago, and San Francisco are home to both startup and commercial-scale operations, driven by urban demand and investment.
- Netherlands: A pioneer in controlled-environment agriculture, the Netherlands remains a leader in AgTech research and innovation.
- Singapore: Strong government support and limited land availability have made Singapore a prominent adopter of vertical farming technologies.
- United Arab Emirates: Vertical farming forms part of the UAE’s broader national food security strategy, particularly in Dubai and Abu Dhabi.
- Japan and South Korea: Both countries have made advancements in high-tech farming, with Japan’s plant factories and South Korea’s automation-led farms gaining traction.
- United Kingdom: Urban farms continue to emerge in cities like London and Bristol, although recent financial setbacks have tested the resilience of several operators.
The Future of The Industry
As technology advances, improvements in energy efficiency through LED innovations and renewable energy sources will likely make controlled-environment agriculture more viable. The expansion of crop diversity beyond leafy greens, such as the production of berries and plant nurseries, is becoming a key focus. Enhanced automation and AI-driven systems are improving operational efficiency, reducing costs, and optimizing production cycles.
Additionally, hybrid farming models that integrate greenhouses with vertical farms are being explored to combine the benefits of both approaches. Finally, a shift toward developing scalable and profitable business models is expected to further validate the economic feasibility of these systems, ensuring they become a sustainable component of the agricultural landscape.
