Market Definition
Controlled Environment Agriculture (CEA) is an approach to creating a fully controlled environment for growing plants within a closed ecosystem. In a CEA facility, water, temperature, light, CO2, & anything plants require during their different growth phases are given artificially. Eliminating the possibilities of pests, enhancing yield & sustainability, and reducing the overall operational costs are the prime reasons behind the mounting popularity of CEA worldwide, and entwined with existing farming methods, it holds immense potential to revolutionize the agricultural sector.
Market Insights
The Global Controlled Environment Agriculture Market is projected to grow at around 25.71% CAGR during the forecast period, i.e., 2023-28. The growth of the market would be propelled mainly by the rising food requirements and gradually reducing arable land worldwide, i.e., leading to the growing need for a controlled environment for agriculture. Various advancements in technologies as well as their rising adoption in the agricultural sector have led to emergence of more innovative farming solutions & equipment to attain healthy crops & higher output.
The reducing arable & fertile land globally due to rapid urbanization and soil erosion is the most prominent issue in the agricultural sector. As a result, it has become highly challenging for farmers to sustain sufficient yields. With this, CEA methods have emerged globally, which can help them produce abundant food year-round, more efficiently, and with only a few resources.
| Report Coverage | Details |
|---|---|
| Study Period | Historical Data: 2018-21 |
| Base Year: 2022 | |
| Forecast Period: 2023-28 | |
| CAGR (2023-2028) | 25.71% |
| Regions Covered | North America: The US, Canada, Mexico |
| South America: Brazil, Rest of South America | |
| Europe: Germany, The UK, France, Spain, Italy, The Netherlands, Rest of Europe | |
| Asia-Pacific: China. Japan. India. South Korea. Rest of Asia Pacific | |
| Middle East & Africa: UAE, Israel, Saudi Arabia, South Africa, Rest of Middle East & Africa | |
| Key Companies Profiled | American Hydroponics[AMHYDRO], Ponics Technologies, Vertical Future, Nelson & Pade Inc., Innovation Agritech Group, The Aquaponic Source, Go Green Aquaponics, V-plus Agritech Pte Ltd, Ponic Greens, Rise Hydroponics, Everlight Electronics Co., Ltd, Freight Farms, ams-OSRAM AG, Heliospectra, Others, |
| Unit Denominations | USD Million/Billion |
CEA promises a more sustainable & profitable future of the agricultural sector by minimizing water consumption and the need for pesticides, land usage, & transportation. Hence, the mounting awareness about the significance & benefits of growing plants in a controlled environment, as issues like less available arable land & unfavorable climate are well-addressed, is boosting the Global Controlled Environment Agriculture Market.
Market Dynamics
Key Driver: Rising Demand for Chemical-Free, High-Quality, & Sustainably-Produced Food
As more & more consumers are becoming increasingly aware of the potential health risks associated with chemicals & other contaminants in food, there are growing concerns over the quality, safety, & sustainability of the food they consume, i.e., leading to a large number of people adopting food products free from harmful residues, grown using sustainable practices, and available year-round. CEA provides a controlled environment where crops can be grown without using pesticides, herbicides, or fungicides, which results in safer & higher-quality produce that meets stringent food safety regulations.
Moreover, it is a more sustainable alternative to conventional farming practices as it minimizes the need for large amounts of water, reduces soil erosion, and optimizes resource utilization. With the use of vertical farming techniques, CEA maximizes land efficiency & minimizes land degradation while reducing the carbon footprint associated with traditional agriculture practices. Hence, these aspects are augmenting the popularity of CEA worldwide and spurring growth in the Global Controlled Environment Agriculture Market.
Growth Restraint: High Initial Investments and Operational & Maintenance Costs
Establishing a CEA facility requires significant capital investment in the construction of buildings as well as installation of specialized equipment like lighting components, climate control systems, irrigation, & automation technologies, along with the cost of land. In addition, CEA facilities also require substantial energy inputs to regulate temperature, humidity, & lighting, particularly artificial lighting, which can be a substantial energy expense, especially for indoor vertical farms.
Furthermore, operating a CEA facility involves ongoing expenses associated with labor, maintenance, and regular replacement of components, such as HVAC systems, lighting fixtures, irrigation systems, & sensors. Hence, these high costs associated with the setup & maintenance of CEA facilities are the major growth restraints for the Global Controlled Environment Agriculture Market.
Market Segmentation
Based on Growing Method:
Among them all, Hydroponics is projected to continue dominating the Global Controlled Environment Agriculture Market during 2022-27, primarily due to the rising awareness among consumers regarding the adverse effects of pesticides on plants and the mounting requirements for enhanced flavors & sustainability of various fruits & vegetables.
Hydroponics involves growing plants in mineral solutions that are without soil. It is the most sustainable method that aids in eliminating the severe effects of soil-borne insects & pesticides on plants. The significantly less labor requirement, low installation costs, and reduced water usage associated with Hydroponics provide substantial return-on-investment.
Moreover, hydroponically grown plants generate a much greater yield than those grown in soil since there is proper control over the nutrients. Hence, these aspects contribute to the burgeoning demand for Hydroponics and project lucrative opportunities for the overall market growth through 2027.
On the other hand, the rising demand for Aquaponics is anticipated to contribute significantly to the market growth over the forecast years. Aquaponics is the combination of Hydroponics & aquaculture, which provides more oxygen in roots to help plants grow better and eliminates the need for harmful chemicals for cultivation. The wastes produced by fishes grown in one tank are nutrient-rich & directed to the plants growing in another tank, which creates a sustainable ecosystem. Lettuce, peppers, mint, & cucumbers, among others are a few plants grown extensively worldwide through Aquaponics.
Based on Components:
Here, lighting components held the largest share in the Global Controlled Environment Agriculture Market in the previous few years, and the same trend is likely during 2022-27. It attributes primarily to the dependence of CEA methods on artificial lighting that acts as a substitute for the sunlight and provides sufficient light intensities required for crop growth. The intensity of these artificial lights in terms of luminous efficiency, spectrum range, & color temperature is easily adjustable as per the plant & its cultivation requirements.
Moreover, the burgeoning need for LED systems to reduce operational costs & power consumption levels since they generate lower heat than conventional lights is another crucial aspect contributing to the overall market growth of lighting components.
On the other hand, sensors are also gaining significant traction in the global market, primarily due to the surging adoption of Artificial Intelligence, the Internet of Things, and Big Data analytics in the agricultural sector. These advanced technologies help understand different crop conditions using the data collected by sensors. Light sensors, nutrient sensors, & humidity sensors are used extensively for monitoring crop health and the external environment.
Regional Projection
Of all regions globally, Europe is projected to be the major contributor to the growth of the Controlled Environment Agriculture Market through 2027. It attributes primarily to the extensive presence & utilization of various farming methods, including intensive, conventional, & organic, across the region, coupled with increasing expenditure by AgriTech startups on expanding their product offerings & business presence.
Countries like the United Kingdom, Spain, the Netherlands, and Germany are the leading markets across Europe owing to favorable policies & subsidies for promoting the use of CEA methods & more environmentally conscious land management and, in turn, overcoming challenges like rapidly growing population & climate changes. Moreover, the rapidly expanding genetically modified crop technology, coupled with the mounting adoption of nanotechnology & robotics in farming that facilitates better food packaging & more efficient disease & pest control, are also driving the regional market.
On the other hand, Asia-Pacific also projects notable growth prospects for the Controlled Environment Agriculture Market during 2022-27. It owes to the rapidly declining arable land in countries like China & India, which has created an immense need for innovative & efficient farming practices like CEA. Besides, the growing water scarcity & food requirements for the swiftly rising population of India, China & Japan are other crucial aspects projected to fuel the market growth across Asia-Pacific in the coming years.
Recent Developments in the Global Controlled Environment Agriculture Market
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Frequently Asked Questions
A. The Controlled Environment Agriculture Market is expected to record around 25.71% CAGR during 2023-28.
A. The ever-increasing demand for high-quality & reliable food production, coupled with the need for sustainable agricultural practices, are the prime factors projected to drive the Controlled Environment Agriculture Market during 2023-28.
A. Aerofarms AGX Ltd., American Hydroponics (Amhydro), Bowery Farming, BrightFarms, CropOne, Everlight Electronics Co. Ltd., Freight Farms, Inc., Fresh Box Sp. z o.o., Green Sense Environment Solution LLC., Grow Pod Solutions, LLC, Illumitex Inc., Innovation Agri-Tech Group, Nelson & Pade, Inc., Plenty Unlimited Inc., and Signify are the key players operating in the Controlled Environment Agriculture Market.
A. The high initial investments as well as operational & maintenance costs associated with CEA facilities are the major factors that might hinder the growth of the Controlled Environment Agriculture Market in the forecast period.
A. Lighting components would create lucrative prospects for the leading companies in the Controlled Environment Agriculture Market during 2023-28.
A. Europe is expected to emerge as a promising region for the Controlled Environment Agriculture Market to witness profitable opportunities over the forecast years.
