The hydroponics market is projected to register a CAGR of 8.5% over the forecast period, 2021-2026.
Considering the force and isolation of COVID 19, strengthening the food production and distribution systems has become a key concern for the future, which has boosted the need for hydroponics farms. 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 2020, North America was the largest geographic segment of the market studied and accounted for a share of around 35.78% of the hydroponics market. 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 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.
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.
Competitive Landscape Global Hydroponics input provider market is consolidated with major layers holding a market share of 53.6% and others holding a share of 46.4%. Some of the prominent players operating in the market includes Koninklijke Philips N.V, Argus Control Systems Ltd, American Hydroponics and Hydrodynamics International, Inc.
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., and Plenty Unlimited Inc., etc.
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