Commercial Greenhouse Market - Growth, Trends, and Forecasts (2023-2028)

Key Highlights

• The commercial greenhouse market is projected to register a CAGR of 8.1 % during the forecast period.
• Greenhouse farming is an excellent way of producing crops that have become popular worldwide. It has numerous benefits like lesser production risks, increased production, year-round growth, etc. The key factor driving the growth of the commercial greenhouse is its capability to provide high-yield production compared to conventional farming techniques. Likewise, the declining arable land due to increasing population, rising demand for food, and sudden environmental changes have also driven the commercial greenhouse market.
• In addition, changing climate conditions throughout traditional farming have led to the acceptance of commercial greenhouses. The adoption of greenhouse farming provides more control over the environment where crops develop. As the farming sector is expanding, farmers worldwide are aiming for higher yields, quality products, and economies of scale. However, the need for precision technology to increase the yield with high quality and high initial investment costs is restraining the growth of the market studied during the coming year.
• Further, government initiatives to promote greenhouse farming are acting as a catalyst for the growth of these commercial greenhouses. For instance, in January 2021, the Ministry of Agriculture and Fisheries endorsed the proposed 450-acre Land We Love Organic Greenhouses project, the largest commercial organic farm to be established in the Caribbean in Mexico, hailing it as impressive and one that will supplement agricultural production in the country. Thus, the needs of the rising population, increasing food demand, the necessity to increase crop yields, and growth in productivity are the factors driving the market studied.

Commercial Greenhouse Market Trends

Decrease in Arable Land

A shortage of agricultural land worldwide is boosting the demand for greenhouse farming. According to the baseline projections in the EU Agriculture Outlook for 2018-2030, agricultural cropland is anticipated to suffer a setback with the region's declining area of arable land. The total arable land in Europe is anticipated to decline at a much higher rate by 2030, primarily attributed to the increasing level of urbanization in the region, which has affected the efficiency of the utilized agricultural area (UAA). As a result, there is a dire need to increase crop yields in the coming decades to keep pace with the food demand driven by population growth and rapid urbanization.

Furthermore, the world has lost a significant portion of its arable land due to erosion or pollution in the past 40 years, with potentially disastrous consequences for the global demand for food. The continual plowing of fields, combined with the heavy use of fertilizers, has degraded soils around the world, with erosion occurring at a pace of up to 100 times greater than the rate of soil formation. It takes around 500 years for just 2.5 cm of topsoil to be created amid unimpeded ecological changes. Many countries, such as Bangladesh, Austria, Chile, and Colombia, are facing a reduction in arable land. The farmers are switching to greenhouse farming for production and to meet the local food demand.

Owing to the continuous decline in the per capita availability of farmland, the practice of increasing productivity is a way out. Thus, there is a need for high-yielding crops that can solve the scarcity of farmland without compromising production volumes. This can be attained through greenhouse farming.

Europe Dominates the Largest Share in Greenhouse Installment

Europe has traditionally been at the forefront of implementing advanced techniques in commercial greenhouse horticulture. The United Kingdom, Spain, Germany, France, and Russia have large areas under greenhouse cultivation. Commercial greenhouse farming is escalating in the United Kingdom, dominated by start-ups, and primarily restricted to horticulture crops. It guarantees yields and reduces the industry's environmental impact while improving the supply of safe, healthy, and nutritious food and minimizing the miles involved in its distribution.

Furthermore, Russia's conversion to greenhouse systems was necessitated by widespread soil depletion, a buildup of soil disease, salinization, high-water tables, and favorable economic returns. Compared to 2020, greenhouse vegetable production in Russia has significantly increased. According to the Ministry of Agriculture, Russian farmers have grown 423 thousand metric tons of vegetables and green crops in winter greenhouses since the beginning of 2021. This is 40.5% higher than in 2020 (301 thousand tons). The greenhouse industry is one of the agricultural business sectors in Russia to receive active government support in recent years. In 2021, about 120 greenhouse projects received soft loans with an interest rate of 5% and reimbursement of investments made in greenhouses' construction, renovation, and equipment.

Additionally, France is one of the leading countries in adopting greenhouse technology and investing in advanced R&D. There has been accelerating development in French greenhouse cultivation. For instance, to deepen its commercial greenhouse expertise, RED Horticulture, a pioneer in plant photobiology, raised an amount of USD 2.9 million from the fund-raising campaign in 2021 to accelerate commercial development and investment in R&D. This project mainly focused on reducing energy consumption and optimizing the use of light in greenhouses. Thus, new initiatives by the market players and governments in Europe to promote various commercial greenhouse techniques are driving market growth during the forecast period.

Commercial Greenhouse Market Competitor Analysis

The commercial greenhouse market is highly fragmented, with numerous large, small, and medium-sized manufacturers. The major players in the commercial greenhouse market include Rough Brothers Inc.​, Richel Group​​, Heliospectra AB, International Greenhouse Company, Argus Control Systems Ltd​, and Certhon​​. These prominent players in the market are involved in strategies such as mergers & acquisitions to increase their market share and get exposed to new ideas and perspectives.

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• The market estimate (ME) sheet in Excel format
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