Introductory Overview
The rising demand for food on the back of increasing population is one of the major factors expected to propel the market growth over the forecast period. In addition, the decreasing arable land suitable for agriculture due to industrialization and urbanization in the country is also anticipated to impact the market growth. Currently, IOT is transforming the agriculture sector enabling the farmers to practice precision and sustainable farming procedures through different agricultural practices such as hydroponics or collecting data concerning the temperature, energy requirement, moisture, and crop growth with the help of wireless sensors, cameras and micro controllers among other techniques to monitor the crops remotely.
In the U.S., various crops are grown using hydroponics such as, tomatoes, lettuce, spinach, microgreens, and others, out of which, lettuce is among the most widely grown fresh vegetables in the country.
Market Size and Forecast
The global demand for food is increasing owing to the rising population. As the traditional farming utilizes soil as medium, it is becoming difficult for various countries across the world to cater to this large demand owing to decreasing availability of land to grow crops. Therefore, development of new farming techniques, such as hydroponics is anticipated to gain prevalence in the coming future.
Maximized yield and denser vegetation achieved through hydroponics is resulting in its increased demand. In addition, hydroponic systems lead to better- and high-quality crop produce as compared to the conventional agricultural practices. The beneficial parameter of this farming technique pertaining to increase in the overall yield is anticipated to significantly impact the growth of the market.
Growth Highlights – 2018-2027
Recent advancements concerning the developments in hydroponic farming is significantly impacting the demand for hydroponic equipment in the market. These technologies include the implementation and adoption of IoT which is further estimated to automate the various labor-intensive procedures pertaining to hydroponic farming.
Rising consumer awareness on nutritional benefits of various hydroponically grown crops is expected to propel the demand in the coming future. Consumers across the world are interested in having more eco-friendly fresh vegetables owing to strong and well-established inverse relation between consumption of vegetables and some of the chronic ailments.
Hydroponics, a soil free farming technique is practiced for wide variety of crops. With such vast range of crops being grown hydroponically, a proper distribution channel is of utmost importance. Several hydroponic companies are supplying vegetables through different sources such as modern trade, grocery stores, bulk supplier & distributors etc. However, adoption of newer distribution channels is estimated to impact the market growth.
Market Segmentation Synopsis
By Crop-Type
Based on crop type, the market is segmented into lettuce and microgreens, among the lettuce segment holds a major share in the market owing to increased consumer demand for high quality, locally sourced produce and its off-season availability.
Lettuce segment held the largest market share of USD 339.5 million in 2018. It is anticipated to grow at a CAGR of 11.66% during the forecast period. Lettuce is among one the most common hydroponically grown vegetable in the US. There are various hydroponic systems that have been commercially successful for the lettuce production.
Growth Drivers
The US hydroponics market is significantly driven by increased demand for food in tandem with the sustainable techniques to grow them. Moreover, increasing environmental concerns pertaining to climate change along with the rising population is anticipated to decrease the share of arable land in the US over the upcoming years. This is another major factor that is expected to significantly contribute to the growth of hydroponics market in the country.
Hydroponic technique makes the most judicious use of water leading to lesser wastage of water resources. Therefore, adoption of this technique over the coming years is expected to foster the market growth.
In addition, field-grown crops are susceptible to adverse environmental conditions, such as drought and inconsistent rainfall patterns. Nevertheless, the crops grown hydroponically do not get affected by such conditions, which is projected to positively impact the market growth.
Restraints
Soil-less farming is a profitable technique, but few limitations remain substantial, which includes high initial capital investment concerning the hydroponics. This is among one of the vital factors that is estimated to restrain the market growth over the forecast period.
Moreover, the high cost of cultivation associated with hydroponics is majorly due to the extensive equipment required for this technique, which comprises HVAC, intensive lighting, irrigation systems, control systems, nutrient pumps, growing medium, and many others. Hence, the high cost pertaining to these equipment is anticipated to negatively impact the growth of the market.
Competitive Landscape
Bright Agrotech, Cloudponics, Grobo, Iron Ox, SmartBee Controllers, Urban Cultivator, Iron Ox, and Thrive Agritech are among the key market players in the US hydroponics market.
Some of the major manufacturers in the hydroponics market based in the U.S. includes, Amhydro, Freight Farms, Hydrofarm, Inc., and many others. In addition, there is an increase in number of suppliers in the market. Moreover, the customer base is expanding, resulting in extensive customer relationships and wider industrial alliance. This is estimated to result in tough competition for the new market players.
