Hydroponics Market Analysis Report By Type, By Crops, By Region And Segment Forecasts From 2019 To 2025

Industry Insights

The global hydroponics market size was worth USD 1.33 billion in 2018 and is expected to grow with a CAGR of 22.52% during the forecast period, from 2019 to 2025. The growing adoption of hydroponics for indoor vegetable farming is a major factor driving the market growth. In addition, the adoption of different farming methods for cannabis cultivation is growing rapidly due to marijuana legalization in several countries such as South Africa, Canada, Czech Republic, and others, which is expected to drive the demand for hydroponics. Further, rising awareness among people about the adverse effect of artificial ripening agents and pesticides on their health is projected to increase the adoption of hydroponics systems as it eliminates the need for such products and helps to provide superior vegetables. Ease of operation and low installation cost are anticipated to drive market growth in the next few years.

Hydroponic cultivation is a method used to grow plants without soil and this cultivation system used mineral solution instead of soil which is put around plant roots. In this cultivation, plants are directly submerged under chemical solution and periodically checked to ensure the proper chemical composition is maintained for plant growth. In this way, the hydroponic method reduces the risk of diseases caused by soil. In addition, plants grown by hydroponic technique produce more yield than plants cultivated in soil due to proper control of nutrients in plants.

The demand for food across the globe is increasing. As per the Food and Agriculture Organization (FAO), the world population is projected to reach around 9.1 billion by 2050, thereby; food production will have to increase by 70%. This scenario is projected to increase demand for an alternative farming method that will give more yield in less time. In Europe and the Asia Pacific, water and land are becoming scarce which is projected to increase the adoption of alternative farming technologies in the next few years.

Development in nutrient film techniques, sensing technologies, climate control, and others are projected to drive hydroponics market growth. Industry players are offering several ways to manage and monitor their crops with the help of sensors, software, mobile application, and web platform. For example, SmartBee Technology, Inc. provides irrigation controls, environmental sensors, water, nutrient sensors, and software that offer real-time data to farmers. Technological advancements such as IoT technology, data monitoring, and collection have enabled automation in farming techniques, which in turn, has positively attributed to the market growth.

Crops Insights

By crops, the market is bifurcated into tomatoes, peppers, cucumbers, lettuce, herbs, and others. In 2018, the tomatoes segment accounted for over 30% market share. It is a major hydroponically cultivated crop worldwide. For tomato hydroponic cultivation, farmers use rock wool, coconut coir, or perlite as growing materials. The Asia Pacific and Europe are expected to cultivate a substantial amount of tomatoes over the forecast period.

Leafy vegetables like spinach, arugula, kale, and lettuce are gaining popularity among hydroponic growers. Out of these, red and green leaf lettuces are also major hydroponically grown vegetables among indoor vegetable growers due to their raw consumption in large quantities. Lettuce hydroponic cultivation is growing in North America due to its increasing demand from fast-food chains and households. The lettuce crop segment is expected to grow at a CAGR of over 25% during the forecast period.

Type Insights

On the basis of types, the hydroponics market is segmented into liquid systems and aggregate systems. In 2018, the aggregate system accounted for the largest market share due to its high adoption among indoor hydroponic farmers, as this system is inexpensive and easy to set up. In this system, solid media like wool, perlite, vermiculite, sawdust, peat, rock, sand, or coconut coir give support to the plants. In aggregate systems, primary technology includes drip systems, wick systems, and ebb & flow systems. Among these technologies, the ebb & flow is a widely used technique as it is easy to set up and inexpensive.

The liquid systems application segment is projected to grow with the highest CAGR during the forecast period. This growth is attributed to the increasing penetration of closed system cultivation among farmers. Nutrient Film Technique (NFT) and Deepwater culture systems are being widely used to cultivate lettuce as well as other leafy vegetables. This system reduces the use of solid medium and roots can directly be submerged into a nutrient solution, thereby, making the cultivation process very easier. As the nutrients are directly given to the plant’s roots, this system expedites growth and gives maximum crop. However, soilless farming can reduce the chances of soilborne diseases, the hazard for spreading of pathogen increases due to recirculating nutrient solutions with closed systems. Hence, to avoid this risk, the liquid system requires high maintenance for changing and monitoring nutrient solutions.

Regional Insights

In 2018, Asia Pacific dominated the global hydroponic market due to the increased adoption of hydroponic in South Korea, China, Australia, and other countries. The market is expected to rise in China and India due to growing urban hydroponic farms. Moreover, North America is expected to witness significant growth over the forecast period due to the increasing adoption of different farming methods in urban areas and the presence of a large number of manufacturers in this region. Some prominent companies present in North America are AeroFarms (U.S.), LumiGrow (U.S.), and AMHYDRO (U.S.), Argus Control Systems Limited (Canada).

In 2018, Europe held the second-largest market share due to the increasing adoption of hydroponics driven by the scarcity of land. In 2010, the European Environment Agency (EEA) has stimulated for building vertical farms to overcome climate change challenges and produce crops in a more eco-friendly way, thereby, expected to drive the regional market growth. The European market is expected to grow with significant CAGR during the forecast period due to the increasing expansion of genetically modified crop technology. However, the lack of availability of essential equipment to set up hydroponic farms and the lack of government support are expected to hamper the market growth in South America, and the Middle East & Africa.

Impact of COVID-19

The COVID-19 has positively impacted the market growth. Lockdowns in several countries have led to a shortage of food and vegetables due to several restrictions for border crosses and increased food losses.

City lockdown has led to increasing awareness regarding the importance of food availability for citizens. Therefore, this outbreak has enforced people in several countries to grow fruits and vegetables in their homes which are expected to drive the market growth. In addition, several benefits of this new technique improve food nutrition and security which will help people to boost their immunity and also curbs climate change impacts. These factors are expected to positively affect market growth during this pandemic situation.

Hydroponics Market Share Insights

Market players include in this industry are Emirates Hydroponics Farms (UAE); AeroFarms (U.S.); AMHYDRO (U.S.); Freight Farms (U.S.); LumiGrow (U.S.); Argus Control Systems Limited (Canada); Signify Holding (the Netherlands); Terra Tech Corp (U.S.); Green Sense Farms Holdings, Inc. (U.S.); Heliospectra AB (Sweden). These companies are adopting several strategies such as mergers and acquisitions. For example, in 2019, U.S.-based hydroponic equipment provider Grow Generation acquired Palm Springs Hydroponics, a California-based company. Through this acquisition, Grow Generation aims to expand its operations to be a leading supplier in California. Moreover, companies are investing in research and development activities to develop new solutions and products in order to strengthen their position in the competitive market. 

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Million Insights has segmented the global hydroponics market report on the basis of type, crops, and region:

• Type Outlook (Revenue, USD Billion, 2014 - 2025)
    • Aggregate Systems
    • Liquid Systems

• Crops Outlook (Revenue, USD Billion, 2014 - 2025)
    • Tomatoes
    • Lettuce
    • Peppers
    • Cucumbers
    • Herbs
    • Other

• Regional Outlook (Revenue, USD Billion, 2014 - 2025)
    • North America
        • The U.S.
        • Canada
        • Mexico
    • Europe
        • Germany
        • U.K.
        • France
    • The Asia Pacific
        • China
        • India
        • Japan
    • Rest of World