What are Indoor Vertical Farms?

Introduction

Vertical farming refers to growing crops in stacked layers rather than a single horizontal level. These systems vary in design and often incorporate soilless substrates and hydroponic systems. Vertical farming systems can be used in a range of controlled environment agriculture (CEA) structures, including indoor farms, and sometimes in greenhouses or high tunnels.

In an indoor vertical farm, these systems are used in enclosed spaces where growing conditions, including light, humidity, and temperature, are carefully controlled. These systems allow year-round production near urban areas with reduced influence of outdoor weather. Indoor vertical farms can include container farms, purpose-built indoor facilities, grow cabinets or appliance farms, or retrofitted unutilized buildings (Fig. 1).

Vertical farming is not an entirely new concept. During the 1940s, a Belgian comic strip depicted multi-layered food production structures with added irrigation and lighting (Van Gerrewey et al., 2022). Interest in vertical farming increased in the late 20th and 21st centuries as hydroponics, lighting, and environmental controls improved (Van Gerrewey et al., 2022). Looking at the commercial landscape in the U.S., Geniponics, located in Syracuse, NY, is thought to be one of the first indoor vertical farms that sold produce commercially, though it started as a research study looking at growing vegetables on submarines in 1973 (Mitchell, 2022).

There is not yet a formal system to track the number of indoor vertical farms in the U.S., but industry reports suggest the sector has the potential to expand. Improved production methods and industry knowledge gained over the years are supporting this growth (CEAg World, 2026; Gauthier & Marcelis, 2025).

Why is There a Growing Interest in Indoor Vertical Farms

Interest in indoor vertical farms has increased as urban populations grow, technology improves and becomes more affordable, and demand for local food rises (Al-Kodmany, 2018). Below are some of the potential key benefits of indoor vertical farms:

• Supports year-round local and regional food systems, especially in urban or land- constrained areas.
• Reduces transportation distances (food miles).
• Uses less water and fertilizer.
• Protects crops from some extreme weather events and pest pressures.
• Provide stable yields and, in some cases, produce higher yields per unit ground area.
• Has the capability to improve nutritional and flavor qualities under controlled conditions.

Some Key Challenges Facing Indoor Vertical Farms

Indoor vertical farms have evolved from primarily research systems into commercial operations worldwide, but some important challenges remain for this sector. A few of the key challenges include:

• High start-up cost.
• High energy consumption.
• Systems that perform well at small scales may become less efficient as they grow larger.
• Profitability depends on matching farm size, system design, crops, and technology with market demand.
• Limited practical, easy-to-access production information.
• Equipment failures, power disruptions, or errors in environmental control systems can quickly impact crop yield and health.
• Environmental management within enclosed systems requires careful oversight and technical knowledge.

Interested in Starting an Indoor Vertical Farm? Consider the Market First

Evaluating costs early can help determine if the indoor vertical farm fits your goals and market. Market access should be evaluated before selecting crops or production systems. Many vertical farms prioritize products that align with short production cycles and strong, consistent market demand (Mrozowski & Gkanaviaris, 2024).

As with any other farming venture, building a business plan and enterprise budget that considers feasibility and market studies is an important step. The Extension article,

“Hydroponic Production of Edible Crops: Planning for the Market” (https://www.pubs.ext.vt.edu/SPES/spes-461/spes-461.html) explores market factors that overlap with indoor vertical farms.

General questions may include:

• Is there sustained demand for the selected crop(s)?
• Will products be sold fresh, minimally processed, or as value-added goods?
• What is the transportation distance to primary buyers?
• Are the target markets restaurants, direct-to- consumer, wholesale distributors, institutional buyers (e.g., K-12, colleges/universities, hospitals), or retail grocery outlets?

Despite potential advantages, vertical farming is not universally profitable and may not be appropriate for all producers or markets.

Profitability depends on factors such as facility design, energy costs, crop choice, labor efficiency, and reliable buyers (Ceccanti et al., 2026). Producers are encouraged to conduct thorough feasibility analysis and market assessment before making significant investments in an indoor vertical farm.

Indoor Vertical Farm Structures

The choice of facility influences both capital investment and long-term operating costs.

Indoor vertical farms may operate within several types of structures depending on available infrastructure, space, capital investment, and production goals. Each has different advantages and constraints related to construction cost, environmental control, scalability, and proximity to consumers (Al- Kodmany, 2018) (Table 1).

Crops Suited for Indoor Vertical Farm Production

A variety of crops can be successfully produced in indoor vertical farms, including leafy greens, herbs, other specialty crops, and, in some systems, fodder or protein-related crops (Ahamed et al., 2023). However, profitability varies widely depending on crop growth habits, market value, and labor needs and availability (Table 2). Most commercial vertical farms focus on crops with short production cycles, compact growth habits, and strong local market demand, such as leafy greens, herbs, and microgreens (Mrozowski & Gkanaviaris, 2024).

Some fruiting crops can be produced in vertically stacked systems; however, crop architecture and growth habit strongly influence system suitability. Compact or dwarf cultivars may be better suited for vertical production than large vining crops because they typically require less structural support and can be managed within smaller production spaces (Tharpe et al., 2026). Fruiting crops generally require greater light intensity and longer production periods than many leafy or specialty crops, which can increase both energy use and labor inputs (Zhuang et al., 2025). Today, most commercial operations are concentrated on high-value specialty crops, but the range of crops suitable for vertical production continues to expand.

Table 2. Crops Produced Commercially in Indoor Vertical Farms

Core Components of an Indoor Vertical Farm

The core components of an indoor vertical farm are typically selected to make the best use of space, crops, and available resources.

Growing Systems

Indoor vertical farms commonly utilize soilless production methods, such as hydroponics, media beds, or, less frequently, aquaponics.

Hydroponic systems allow control over nutrient delivery and often reuse water and fertilizer.

More information on hydroponic crop production is available in the VCE publication series on hydroponic production of edible crops (https://www.pubs.ext.vt.edu/content/pubs_ext_ vt_edu/en/SPES/spes-462/spes-462.html). The primary hydroponic systems used in indoor vertical farms include:

• Nutrient film technique (NFT): Thin film running through a channel.
• Aeroponics: Fine mist delivered to roots.
• Ebb and flow: Temporary flooding of the root zone.

Production systems in vertical farms are arranged in different structural configurations (Figure 2). Common system layouts include:

• Stacked rack systems, where horizontal growing channels are arranged in multiple tiers.
• Vertical tower systems, where plants grow around cylindrical structures.
• Vertical wall systems, where plants grow along upright panels or modular wall units.
• A-frame gutter systems, where growing channels are arranged in angled frames (more commonly used in greenhouse environments).

The best system configuration depends on the facility, crops, lighting, automation, irrigation, drainage, and access to labor. System choice affects water use, labor needs, and disease risk.

Substrates

The hydroponic or soilless substrate type used in indoor vertical farms varies. Some of the most common include rockwool, foam, coconut coir, hemp/bamboo mats, hydrogels, and peat- based mixes. These substrates differ in how they hold and drain water, which impacts irrigation frequency and root development.

Environmental Management and Cultural Practices

Indoor vertical farms depend on managing the environment and cultural practices to produce consistent crops (Table 3). Growers must closely monitor water, nutrients, light, temperature, humidity, airflow, and pests. Some operations use simple timers and manual monitoring. Others use sensors and automated controls to manage lighting, irrigation, climate, nutrients, and post-harvest so that human interaction with the plants is very limited.

Automation can reduce labor demands and improve consistency, but it requires greater technical knowledge and regular oversight. Regardless of the level of automation, successful vertical farming requires trained workers who understand the system, plant needs, and food safety practices.

Energy and Regulation Considerations for Indoor Vertical Farms

Indoor vertical farming systems need a reliable energy supply and awareness of applicable regulations. These farms rely on sole-source lighting and other climate control and monitoring equipment, making electricity often one of the largest operating expenses. Electrical rates, equipment efficiency, and access to backup power all affect costs and long‑term feasibility. Regions with lower electricity costs or access to renewable energy sources may offer economic advantages, while high or variable energy prices can limit scalability.

Because power interruptions can quickly affect crop health in tightly controlled systems, growers should also consider system redundancy and contingency planning during facility design.

In addition to energy planning, indoor vertical farms must navigate local, state, and federal regulations. These may include zoning and land‑use requirements, building and safety codes, environmental and waste‑management rules, food safety standards, and labor laws.

Regulatory requirements vary by location, and early communication with local planners, utilities, building departments, and economic development offices can help clarify permitting needs and reduce delays.

Current Indoor Vertical Farm Industry Trends

The indoor vertical farm industry has grown rapidly due to new technology, urbanization, and demand for local food. Early growth in the indoor vertical farm industry was supported by substantial venture capital investment, but more recent developments have placed greater emphasis on economic sustainability (Bunge et al., 2022).

Industry Challenges and Changes: In recent years, the indoor vertical farming industry has grown, but it has also faced challenges. Rising costs of energy, infrastructure, and labor have made it difficult for some operations to remain profitable (Baumont de Oliveira et al., 2022). As a result, many operations have adjusted their production strategies and size to improve efficiency and stay economically sustainable. Industry reports suggest the sector is moving from rapid growth toward a focus on efficiency and long-term sustainability (Aborujilah, 2025). This focus includes getting back to horticulture basics instead of technological advancement.

New Technologies: Modern systems increasingly incorporate automation, environmental sensors, robotics, and data- driven tools to monitor crop growth and optimize resource use. Artificial intelligence and machine learning are also being explored to improve environmental control and support crop management decisions. Together, these technologies may support data-driven decision- making, improve crop consistency, and reduce labor requirements (Rathor et al., 2024).

Diversification of Crops: While microgreens, baby greens, and leafy greens remain the dominant crops produced in indoor vertical farms, researchers and producers are increasingly exploring a wider range of crops for commercial production (Van Gerrewey et al., 2022). This includes other specialty crops such as strawberries, micro vegetables, and edible flowers, as well as plants used for pharmaceutical, nutraceutical, and other non- food applications (Table 2). Interest is also growing in producing crops that are difficult to grow consistently in the field and could benefit from the environmental control provided by indoor vertical farming.

Integration with Local Food Systems: Another emerging trend for indoor vertical farms is integrating production systems into urban and regional food supply chains. Vertical farms are often located near population centers, enabling producers to supply grocery retailers, restaurants, and institutional buyers with greater consistency and coordination within regional supply chains. Some vertical farms have also implemented alternative approaches, including on-site production in restaurants.

Future Outlook: Despite recent financial challenges in the industry, indoor vertical farming continues to be explored in regions with limited agricultural land, extreme climates, or urban populations (Al-Kodmany, 2018). Continued research, introduction of new technologies, and improved production strategies may help address current limitations and expand the range of crops that can be produced. As the industry continues to evolve, successful vertical farming operations will likely depend on balancing innovation, economic feasibility, crop selection, production knowledge, and access to reliable markets.

Summary

Indoor vertical farming is a type of CEA where crops are grown in stacked layers under carefully managed conditions. Vertical farms can support year-round production and make efficient use of limited space. Indoor vertical farming continues to be explored by growers, researchers, and industry groups for various applications. These systems offer benefits such as efficient water and land use and proximity to markets. However, they require careful planning due to high costs, energy needs, and crop limitations. As the indoor vertical farming industry continues to develop, new research and technology may broaden how these systems are used and what they can produce. However, successful indoor vertical farms must balance technology, crop knowledge, costs, and market access. Indoor vertical farming is one part of a larger agricultural system. When implemented appropriately, vertical farming can complement existing agricultural systems by providing additional production opportunities.

References

Additional Resources

Introduction to Microgreen Production in Indoor Vertical Farms and Greenhouses. VCE Publication. SPES-756NP. https://www.pubs.ext.vt.edu/SPES/spes-756.html

What is Controlled Environment Agriculture? VCE Publication. SPES-751NP. https://www.pubs.ext.vt.edu/content/pubs_ext_vt_edu/en/SPES/spes-751.html

Controlled Environment Agriculture Innovation Center Additional Resources webpage: https://ceaic.org/extension-education/additional-resources/