The hydroponics market is anticipated to register a CAGR of 7.8% during the forecast period (2022-2027).
While many industries are contracting because of the COVID-19 pandemic, hydroponic farming is growing in terms of demand. This type of farming practice was expanding across the urban areas even before the pandemic. It is now witnessing a huge growth rate because vertical farms control everything, from seeds to stores. Vertical farms also provide consumers with information about the origin of their food and the way in which it is produced.
Strengthening the food production and distribution systems has become a key concern for the future, which has boosted the need for hydroponics farms over the long term. As per FAO studies, the development of alternate growing systems such as hydroponics is anticipated to play an important role in global food security by supplying safe and nutritious food. In addition, this can also help in tackling the logistical uncertainties in the market. Thus, the need for hydroponics is anticipated to grow during the forecast period.
In terms of crops, leafy vegetables and microgreens have traditionally been the most cultivated hydroponic crops. However, the area under hydroponics in crops that are exotic to warmer climates, such as cherry tomatoes, lettuce, microgreens, and a wide variety of other cool-season crops, has been increasing.
North America is the largest geographic segment of the market studied. Hydroponics is an environment-friendly and profitable technology. It has been promoted by various governments and non-governmental organizations for its benefits in terms of food security. The need for food supply against the explosive population increase by 2050 has catalyzed the growth of the hydroponics market. Additionally, with the increasing success rates associated with the commercial hydroponics industry and the increasing difficulty of growing crops on soil, the hydroponics market is expanding exponentially.
Key Market Trends
Higher Consumption of Salads and Exotic Vegetables
The demand for exotic fruits and vegetables has been constantly growing at a higher rate due to the increased purchasing power of consumers. The cost of these exotic products is high, as most of these products are imported, and thus, several research institutions and universities are focusing on establishing more simplified hydroponics systems to accelerate the production of exotic fruits and vegetables and meet the escalating demand. Increasing awareness among the consumers of eating fresh vegetables may also fuel the market in the future. The demand for exotic vegetables like red and yellow capsicum and red lettuce in food and retail chains, like Burger King and KFC, is anticipated to boost sales during the forecast period.
Also, with the rapid urbanization, the demand for hydroponically grown vegetables and crops has been increasing from several industries such as hotels, restaurants, fast food chains, railway catering, NGOs, and defense, which encourages the farmers to cultivate through hydroponics systems.
North America Dominates the Market
The demand for fresh vegetables and fruits in the region is driving the market demand for hydroponic operations. At present, the hydroponics farms present in the region are family or small business operations that cover approx. 1 acre. Rooftop hydroponic gardens in urban setups like New York are helping the market grow further. The future growth of the hydroponics market in the region depends greatly on the development of hydroponic production systems that are competitive in cost with systems of open-field agriculture. Hydroponic production has gained popularity among commercial vegetable producers since it is an efficient method to control inputs and manage facilitates for disease and pests and not a labor-intensive method to manage larger areas of production. As hydroponics eliminates the need for soil fumigants and can increase yields of popular vegetables, farmers in the region are anticipated to adopt hydroponics as a popular cultivation method. The increasing adoption of hydroponics as a cultivation method is anticipated to drive the market growth.
The global Hydroponics input provider market is consolidated with major layers holding the majority of the market share. Some of the prominent players operating in the market include Koninklijke Philips N.V, Argus Control Systems Ltd, American Hydroponics, Hydrodynamics International, Inc., and Lumigrow, Inc. Partnerships and collaborations has enabled players to enter new markets and also in Research & Developments activities for launching new products that cater to the needs of growers across the globe.
The hydroponic systems output market is highly fragmented, with the top five companies, such as Bright Farms, Inc., FreshBox Farms, Pegasus Agritech, Village Farms International, Inc., and Thanet Earth, among others, cornering just 7.1% of the market share, while the rest of the market is shared among numerous players. Some of which include, Circle Fresh Farms, Green Sense Farms Holdings Inc., Plenty Unlimited Inc., etc.
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1.2 Scope of the Study
4.2 Market Drivers
4.3 Market Restraints
4.4 Porter's Five Forces Analysis
4.4.1 Bargaining Power of Suppliers
4.4.2 Bargaining Power of Buyers
4.4.3 Threat of New Entrants
4.4.4 Threat from Substitutes
4.4.5 Intensity of Competitive Rivalry
5.1.1 Aggregate Hydroponic System
18.104.22.168 Closed System
22.214.171.124 Open System
5.1.2 Liquid Hydroponic System
5.2 Crop Type
5.2.2 Lettuce and Leafy Vegetables
5.2.6 Other Crop Types
5.3.1 North America
126.96.36.199 United States
188.8.131.52 Rest of North America
184.108.40.206 United Kingdom
220.127.116.11 Rest of Europe
18.104.22.168 Rest of Asia-Pacific
5.3.4 South America
22.214.171.124 Rest of South America
5.3.5 Middle-East and Africa
126.96.36.199 Saudi Arabia
188.8.131.52 United Arab Emirates
184.108.40.206 South Africa
220.127.116.11 Rest of Middle-East and Africa
6.2 Market Share Analysis
6.3 Company Profiles
6.3.1 Hydroponic Crop Producers
18.104.22.168 Bright Farms
22.214.171.124 Circle Fresh Farms
126.96.36.199 Hydrodynamics International Inc.
188.8.131.52 Village Farms International Inc.
184.108.40.206 Pegasus Agritech
6.3.2 Input Providers
220.127.116.11 Argus Control Systems Limited
18.104.22.168 Hortisystems UK Ltd
22.214.171.124 Hydrodynamics International Inc
126.96.36.199 Koninklijke Philips NV
188.8.131.52 Kubo Group
184.108.40.206 GreenTech Agro LLC
220.127.116.11 Heliospectra AB
18.104.22.168 American Hydroponics Inc.
22.214.171.124 Lumigrow Inc.
126.96.36.199 General Hydroponics Inc.
188.8.131.52 Terra Tech
184.108.40.206 Thanet Earth
A selection of companies mentioned in this report includes:
- Bright Farms
- Circle Fresh Farms
- Hydrodynamics International Inc.
- Village Farms International Inc.
- Pegasus Agritech
- Argus Control Systems Limited
- Hortisystems UK Ltd
- Hydrodynamics International Inc
- Koninklijke Philips NV
- Kubo Group
- GreenTech Agro LLC
- Heliospectra AB
- American Hydroponics Inc.
- Lumigrow Inc.
- General Hydroponics Inc.
- Terra Tech
- Thanet Earth