The Greenhouse
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The Greenhouse

Satellite image of Almeria, Spain. There are over 30,000 hectares (that’s about 75,000 acres) of greenhouses in Almeria.

Let’s Talk About Market Size

How big is the market opportunity for data in indoor farming? Bigger than you think.

I’m often asked how big the market is for indoor farming. Investors are curious to know how many farms are really out there. Potential new farms want to understand the competitive landscape. Retailers are trying to understand who they can purchase from. Here is my analysis on the current market and the growth opportunity.

What’s an indoor farm?

There’s a lot of hype around vertical farming right now. These farms are located in a fully enclosed box (think warehouse or shipping container), using artificial light to grow crops. The existing market for these farms is small (but growing). Much of the confusion around how big the market is stems from the idea that these vertical farms define the indoor farming market, but they don’t. They’re only part of the landscape.

While vertical farms are a small part of the industry today, they play an important role in driving technological innovation and industry awareness.

An indoor farm is any farm with an element of control to the environment, protecting crops from the outdoors. Greenhouses, hoophouses, vertical farms, container farms, and even some home growing systems are all part of the indoor farming ecosystem.

Farmers have been growing food and flowers indoors for centuries. So while the technology is now evolving, the market has been around for a very long time.

There are over 40,000 farms growing crops indoors in the US. That’s over 1B square feet of growing area. In fact, when you see “hothouse” stickers on the tomatoes you buy in NY this winter, that means it was grown inside a greenhouse. These 40,000 growers produce a market value of $14.8B annually.

Now that’s just the traditional crops. Cannabis producers last year raked in $6.7B in sales and most production occurs indoors. Insect breeders are raising crickets, mealworms, and grasshoppers for both animal feed and human consumption indoors as well (we have some great insect farmers using Agrilyst). Certain pharmaceutical production is moving indoors because producing plant-based vaccines halves the time of conventional production. All of these industries are also part of the growing indoor farming ecosystem.

So, what’s data worth to a farmer?

Last year, we asked indoor farmers if they believed they could increase farm yields with data — 90% said yes.

Data does two things for a farm: it helps growers (a) increase yields and (b) drive down operational costs. In our State of Indoor Farming survey, we asked growers how much they believed they could save in operating costs by implementing software to analyze farm data. Their answer? Between about $0.05 and $7 per square foot annually, with cannabis trending at the higher end and floriculture trending lower.

At the weighted average of savings, around $1 per square foot per year, that’s $1.3B in operating cost savings alone.

But data doesn’t just cut down farm costs — more importantly, it helps farmers drive up top-line revenue. Data can help farms increase revenue by more than 20%. How? Insights drive better space optimization, varietal selection, growth speed, seasonality adjustments, and more. That’s a $4.3B increase for both greenhouse horticulture crops and cannabis growers.

Combining operating savings and revenue increases creates a $5.6B addressable market for data in indoor farms, in the US alone.

What’s happening around the world?

The US is a relatively small producer of greenhouse vegetables. In fact, the US represents only about 0.2% of the global greenhouse vegetable market, with the rest of the world producing over $300B of vegetables in greenhouses year-round.

Those vegetables are produced in over 50B square feet of space around the world. The photo in the header of this article shows a satellite image of Almeria, Spain, where there are over 75,000 acres of greenhouses. There are more than 2,000 acres of greenhouse vegetable production in Leamington, Ontario. Major clusters of production like this exist all over the world.

With cost savings and yield increases, that means the global market for data in the indoor greenhouse vegetable industry alone is $120B.

How fast is the market growing?

To feed 9B people by 2050, the FAO estimates a need to raise food production by 70%. This increased capacity has to be met with dwindling resources and finite arable land. On top of this, unpredictable weather and the effects of climate change are threatening food security.

Indoor farming is a way for farmers to protect crops against the risk of weather, while using less resources and producing more per square foot. Because of these factors, the indoor farming industry is growing incredibly fast.

Growth is great, but there is still a massive knowledge gap for new farmers entering the indoor farming industry. Data can close this gap.

At Agrilyst, many of our farmers have already expanded facilities, doubling and sometimes tripling their growing area. They can do this because they have better standard operating procedures and a reliable data set for scaling.

We estimate a market growth of between $3.7 and $6.8B from existing farms expanding operations during the next five years in non-cannabis operations in the US.

The takeaway:

Don’t focus so much on the hype around vertical farming, which generally pigeonholes the industry into high-tech, vertical, venture-backed, enclosed farms. These farms are important to the growth of the industry, but indoor farming is much more than vertical farming alone. Indoor farming is a massive industry that has been around for decades. Data has always existed in this industry (farmers have historical yields, weather and climate data, production and labor data) and is now beginning to change the shape of the industry and help it expand. How we use data to evolve one of the world’s largest legacy industries is definitely worth getting out of bed for.

The bullet points:

  • Controlling your farm environment is a technique that generates over $21B annually in the US and well over $300B globally in crop sales.
  • Data is worth a lot to farms.
  • It helps growers cut costs and increase revenues.
  • That value is worth $5.6B annually to indoor farmers in the US.
  • The global market for data in the greenhouse vegetable industry is worth over $120B globally.
  • Data is helping the industry expand and meet the needs of our growing global population.



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Allison Kopf

Allison Kopf

Founder and CEO of @ArtemisAgTech. She/her