United States Plant Factory Market By Facility Type (Greenhouses, Indoor Farms, Others), By Light (Artificial Light and Sunlight), By Growing System (Soil-Based, Non-Soil-Based, Hybrid), By Type (Fruits & Vegetables, Ornamental Plants & Flowers, Others {Plantation Crops, Forage Crops, etc.}), By Region, Competition, Forecast & Opportunities, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 1491.91 Million
CAGR (2026-2031)	10.49%
Fastest Growing Segment	Indoor Farms
Largest Market	West
Market Size (2031)	USD 2714.44 Million

Market Overview

The United States Plant Factory Market will grow from USD 1491.91 Million in 2025 to USD 2714.44 Million by 2031 at a 10.49% CAGR. Plant factories, defined as closed controlled environment agriculture (CEA) facilities, utilize artificial lighting, climate control, and hydroponic systems to cultivate crops year-round independent of external weather conditions. The United States market is primarily propelled by the increasing demand for local food security and the necessity for consistent supply chains resilient to climate variability. Additionally, the sector is bolstered by a strategic shift toward sustainability; according to the Resource Innovation Institute, in 2024, industry analysis highlighted that the number of agricultural operations utilizing renewable energy systems increased by 15% compared to the previous census. These drivers collectively underscore the market's focus on enhancing urban food resilience and resource optimization.

However, the industry faces a significant challenge regarding high operational expenditures, specifically the energy intensity required for artificial lighting and HVAC systems. The substantial electricity demand needed to replicate sunlight and maintain optimal growing conditions creates a barrier to profitability and scalability for many operators. This financial strain is exacerbated by volatile energy prices, which can severely impact margins and deter potential investment. Consequently, achieving energy efficiency remains the most critical impediment to the widespread expansion of the United States plant factory market.

Key Market Drivers

Advancements in LED lighting and environment control technologies serve as a primary catalyst, directly addressing the industry's critical need for operational efficiency. By integrating precise climate management systems, operators can regulate inputs to reduce the energy intensity that has historically hampered profitability. This technological maturation is evident in recent financial improvements among key market players. According to Local Bounti Corporation, August 2025, in the 'Second Quarter 2025 Financial Results', the company delivered approximately $7 million in annualized expense reductions across its operations, attributed largely to disciplined cost management and its proprietary Stack & Flow Technology. Such innovations are essential for stabilizing margins and proving the economic viability of vertical farming models against volatile energy costs.

Concurrently, the expansion of urbanization and the demand for localized food supply chains are necessitating a shift toward decentralized production facilities situated closer to major population centers. This driver is fueling substantial capital allocation toward large-scale infrastructure projects designed to mitigate long-distance transportation risks. According to Little Leaf Farms, June 2025, in a corporate press release, the company announced the construction of a new 215-acre campus in Tennessee, reinforcing its status with over 50% market share among United States indoor lettuce growers. This expansion reflects broader resilience in sector capitalization; according to Contain Inc., in 2025, total investment in the indoor agriculture space reached $847 million in 2024. These investments underscore a strategic commitment to securing resilient, regionally sourced food networks.

Download Free Sample Report

Key Market Challenges

The primary challenge hampering the growth of the "United States Plant Factory Market" is the high operational expenditure driven by intense energy requirements. Plant factories function as fully enclosed systems that must artificially generate every environmental variable, necessitating continuous electricity for high-intensity LED lighting and industrial climate control units. This absolute reliance on grid power creates a heavy fixed cost burden that persists regardless of crop yield or market pricing. Such energy intensity makes the unit economics of indoor farming precarious, often preventing facilities from competing on price with conventionally grown produce.

This cost dynamic creates a substantial barrier to scalability and long-term financial viability. High monthly utility bills erode profit margins, making it difficult for operators to generate the returns necessary to attract capital for expansion. According to the Resource Innovation Institute, in 2024, benchmarking data revealed that energy costs for indoor farms consistently represented between 25% and 30% of total operating expenses. This financial strain forces many operators to limit their production capacity, thereby slowing the overall growth trajectory of the sector.

Key Market Trends

The United States Plant Factory Market is increasingly defined by a strategic diversification into high-margin crops, moving beyond the sector's historic reliance on leafy greens to improve profitability. Operators are aggressively retrofitting facilities to cultivate high-value produce such as berries and tomatoes, which offer superior pricing power and distinct unit economics compared to commoditized lettuces. This pivot allows companies to differentiate their portfolios and capture premium market segments by delivering consistent quality independent of seasonal constraints. According to Plenty Unlimited Inc., September 2024, in a corporate press release, the company opened a new commercial-scale facility in Richmond, Virginia, which is designed to produce more than 4 million pounds of strawberries annually using advanced vertical towers.

Concurrently, the industry is experiencing a phase of strategic consolidation and market correction, driven by the exit of unviable business models that prioritized rapid expansion over financial sustainability. This trend highlights a maturation of the sector where capital is concentrating around operators with proven operational efficiency, while those unable to manage the high fixed costs of artificial lighting and climate control are forced to cease operations. The stark reality of this competitive shakeout is evident in recent high-profile closures. According to AgFunderNews, November 2024, in the article 'Indoor ag unicorn Bowery shuts down', Bowery Farming, previously a market leader with a valuation of $2.3 billion, ceased operations after failing to secure the necessary capital to sustain its business model.

Segmental Insights

The Indoor Farms segment stands out as the fastest-growing category within the United States Plant Factory Market. This rapid expansion is primarily driven by the capability to cultivate crops throughout the year regardless of external weather conditions. These facilities offer controlled environments that maximize yield and ensure consistent quality, effectively addressing national food security concerns. Additionally, the United States Department of Agriculture actively supports this sector through grants aimed at enhancing urban agriculture and sustainable food systems. Consequently, the ability to produce fresh vegetables near population centers without seasonal limitations fuels the accelerated adoption of indoor farming.

Regional Insights

The West United States maintains a leading position in the domestic plant factory market driven by the critical need for water conservation in arid zones. High adoption rates of controlled environment agriculture allow producers in states like California to overcome persistent drought challenges while adhering to sustainability standards recognized by the United States Department of Agriculture. Additionally, the region hosts a dense network of agricultural technology firms that streamline facility operations through automation. This combination of climatic necessity and technological resource availability ensures the West remains the central region for industry development.

Recent Developments

• In April 2025, Oishii Farm Corporation launched a new strawberry varietal named the "Nikko" berry, expanding its portfolio of vertically farmed fruit beyond its initial luxury offerings. This new product was positioned as the company's most affordable strawberry to date, featuring a flavor profile with balanced sweetness and refreshing acidity. The launch was made possible by advancements in the company's propagation and growing technologies, which achieved higher yields per plant compared to previous cultivars. The introduction of this variety aimed to make high-quality, pesticide-free indoor-grown berries accessible to a wider segment of the mass market through varied retail partners.
• In September 2024, Plenty Unlimited Inc. opened a commercial-scale indoor vertical farm in Richmond, Virginia, dedicated exclusively to the production of strawberries. The facility, developed in partnership with Driscoll’s, utilizes 30-foot-tall growing towers and advanced AI-driven environmental controls to produce up to 4 million pounds of berries annually in less than 40,000 square feet of space. This launch represented the world's first indoor vertical farm designed to grow berries at scale, addressing the challenge of providing consistent, peak-season flavor year-round. The first crop from this farm was scheduled to reach grocery shelves in the region shortly after the facility's inauguration.
• In July 2024, Local Bounti Corporation expanded its commercial distribution network through a strengthened partnership with Sam's Club, a major division of Walmart Inc. The indoor agriculture company commenced shipping leafy greens from its newly operational facility in Mount Pleasant, Texas, to six of the retailer's regional distribution centers. This collaboration allowed the company to increase the availability of its sustainable produce, including its living butter lettuce and other salad blends, to a broader consumer base. The distribution expansion leveraged the increased production capacity from the Texas site, which utilizes the company's proprietary Stack & Flow Technology to optimize crop yields and unit economics.
• In June 2024, Soli Organic Inc. opened a new controlled environment agriculture facility in San Antonio, Texas, designed to supply organic produce to retailers across the Southwestern United States. This site, described as the company's first soil-based vertical farm in the state, spans 140,000 square feet and features six vertical layers of growing capacity. The facility was established to cultivate over ten different crops, including various herbs like basil and cilantro, as well as salad greens such as spinach and romaine. The opening marked a significant step in the company's strategy to shift production capacity from field-grown methods to indoor farming systems that utilize significantly less land and water.

Key Market Players

• Gotham Greens Farms LLC
• Bowery Farming Inc.
• Freight Farms
• Plenty Unlimited Inc.
• AeroFarms, LLC
• BrightFarms Inc.
• Iron Ox, Inc.
• AppHarvest, Inc.
• Vertical Harvest Farms
• Dream Harvesting Farming Company LLC

By Facility Type	By Light	By Growing System	By Type	By Region
Greenhouses Indoor Farms Others	Artificial Light Sunlight	Soil-Based Non-Soil-Based Hybrid	Fruits & Vegetables Ornamental Plants & Flowers Others {Plantation Crops Forage Crops etc.}	Northeast Midwest South West

Report Scope:

In this report, the United States Plant Factory Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• United States Plant Factory Market, By Facility Type:

• Greenhouses
• Indoor Farms
• Others

• United States Plant Factory Market, By Light:

• Artificial Light
• Sunlight

• United States Plant Factory Market, By Growing System:

• Soil-Based
• Non-Soil-Based
• Hybrid

• United States Plant Factory Market, By Type:

• Fruits & Vegetables
• Ornamental Plants & Flowers
• Others {Plantation Crops
• Forage Crops
• etc.}

• United States Plant Factory Market, By Region:

• Northeast
• Midwest
• South
• West