Market Overview

The Europe indoor farming market size was valued at USD 14.76 Billion in 2025 and is forecasted to reach USD 32.03 Billion by 2034, growing at a CAGR of 8.99% during 2026-2034. This growth is driven by urbanization, demand for pesticide-free produce, and sustainable practices. Technological advancements and government support enhance efficiency and adoption of controlled environment agriculture.

Study Assumption Years

• Base Year: 2025
• Historical Period: 2020-2025
• Forecast Period: 2026-2034

Europe Indoor Farming Market Key Takeaways

• Market Size: USD 14.76 Billion in 2025
• CAGR: 8.99% from 2026 to 2034
• Forecast Period: 2026-2034
• Greenhouse facilities dominate with a 47.09% market share in 2025 due to established infrastructure and superior energy efficiency.
• Fruits, vegetables, and herbs lead crop types with a 96.56% share, reflecting strong consumer demand for fresh, locally sourced produce.
• Hardware is the largest component segment at 89.22%, driven by investment in LED lighting, HVAC, climate, and irrigation technologies.
• Soil-based growing systems hold a 41.63% share, favored for traditional greenhouse cultivation methods.
• Germany is the largest country market with 24% share, supported by government initiatives and urban investments in controlled environment agriculture.

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Market Growth Factors

The indoor farming market in Europe is driven by consumer demand for pesticide-free and locally-grown food. European consumers place a premium on vegetables and herbs produced without synthetic pesticides; they are willing to pay a premium price for produce they can trace as sustainable. Indoor farms can also be placed near urban locations to ensure that products are as fresh as possible and to reduce transportation emissions, while selling to supermarket chains increases availability. For example, many salads are imported during the winter months into the United Kingdom.

Government policies and sustainability initiatives such as the European Green Deal and the European Common Agricultural Policy toward financing, tax breaks, and research funding for resource-efficient indoor farming are additional growth factors. National programs fund agricultural innovation, and they adapt projects for the climate. These projects set the stage for controlled-environment agriculture. City planning increasingly integrates indoor farms into buildings. Separately, development agencies are promoting agricultural technology clusters, consisting of private firms and institutions that promote innovation while decreasing investment risks.

Advancements in LED horticultural lighting and automation for modern indoor farming, including light spectra for photosynthesis maximization and energy conservation, robotics for picking produce, Artificial Intelligence (AI) environmental manipulation and cloud computing platforms for lighting, nutrients and control of indoor climate through robotic devices have been developed to address the labor shortage, improve quality and to achieve more uniform indoor farming. Machine learning software is also capable of optimizing parameters for crop growth in real-time, reducing operating costs.

Market Segmentation

Facility Type

• Greenhouse: Holds 47.09% share in 2025, benefiting from established infrastructure, lower energy needs, and proven economics that enable year-round cultivation of diverse high-value crops under natural sunlight.
• Indoor Vertical Farms
• Container Farms
• Indoor Deep Water Culture
• Others

Crop Type

• Fruits, Vegetables, and Herbs: Command 96.56% market share in 2025 driven by sustained demand for fresh, locally produced edible crops such as tomatoes, cucumbers, lettuce, herbs, and emerging indoor strawberries cultivated with advanced LED lighting.
• Flowers and Ornamentals
• Others

Component

• Hardware: Largest segment with 89.22% share, encompassing LED lighting, HVAC, climate control, irrigation, and structural components essential for controlled environment agriculture setup.
• Software: Includes web-based and cloud-based farm management platforms facilitating automation and monitoring.

Growing System

• Soil-based: Dominates with 41.63% share, favored for traditional greenhouse operations using natural soil or substrates benefiting from controlled climate.
• Aeroponics
• Hydroponics: Fastest-growing method, increasingly adopted for leafy greens and herbs with precise nutrient delivery obviating soil usage.
• Aquaponics
• Hybrid

Country

• Germany: Leads with 24% market share, supported by government incentives, technological infrastructure, zoning approvals for urban greenhouses and vertical farms, and strong retail networks.
• France
• United Kingdom
• Italy
• Spain
• Others

Regional Insights

Germany dominates the Europe indoor farming market with a 24% share in 2025. Backed by strong government support, advanced technology hubs in Berlin, Hamburg, and Munich drive growth through rooftop greenhouses and vertical farming. State-backed programs encourage smart sensor adoption, making Germany the continent's fastest-growing market, outpacing regional averages. Its manufacturing base and proximity to R&D facilitate innovation and domestic supply partnerships.

Recent Developments & News

In November 2023, Urban Crop Solutions launched modernized vertical farming technology at BASF's Limburgerhof facility in Germany, enhancing agricultural precision and productivity. In November 2024, Hazera inaugurated a five-hectare high-tech R&D greenhouse in Made, Netherlands, focused on developing disease-resistant tomatoes with superior flavor. Additionally, in January 2025, Avisomo secured EUR 5 Million in Series A funding to expand vertical farming operations across European markets, including Germany, reflecting strong investor confidence despite economic uncertainties.

Key Players

• Urban Crop Solutions
• BASF
• Hazera
• Avisomo
• Priva
• Skytree

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