2022 SPECIALTY CROP AUTOMATION REPORT
3.1.1 INTRODUCTION TO CEA
Controlled environment agriculture is the production of produce inside controlled environment structures, ranging from simple shade and hoop houses to greenhouses or indoor vertical farms. These CEA systems are designed to provide optimal growing conditions for crops and prevent disease and pest damage. Vertical farms and greenhouses are the primary exterior systems that the indoor farming industry relies on. Apart from the exterior system, CEA can use different growing technologies, such as soil-based, hydroponic, aeroponic, aquaponic and aquaculture. Most of the systems adopt hydroponic systems, where crops are grown with roots bathed in nutrient-dense water. Today, CEA is estimated at less than 2 percent of the total U.S. fresh produce market, with most of the CEA market supplied by traditional greenhouses, which have been around for years. This potential for growth beyond 2 percent has led to an unprecedented level of investment in the industry over the last few years.
According to Crunchbase, close to $6 Billion has been raised in North America since 2015, leading to the emergence of many greenhouse and vertical farm start-ups. However, the CEA market is also presented with some difficult-to-overcome barriers, such as nascent technology, limited product variety, competition from incumbent players and challenging economics, even more so in the context of rising energy prices and input material costs. Furthermore, the current volatile and highly uncertain economic and geopolitical climate present significant headwinds for CEA ventures. Altogether, the CEA market is expected to grow at double digit growth rates annually until 2025, with greenhouses expected to remain dominant. The remainder of the chapter expands on the CEA market segmentation, market assessment, key players, economic comparison and takeaways for traditional growers.
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