Hydroponics Market

Global Hydroponics Market Size (2023 to 2028)

The global hydroponics market was valued at USD 396.2 million in 2023 and is anticipated to reach USD 860.16 million by 2028, with a CAGR of 16.5% during the forecast period from 2023 to 2028.

Hydroponics is the technique used for plant development, which eliminates the necessity of soil, where water-based nutrient solution is used, which includes an aggregate substrate or growing media such as coconut coir, perlite, and vermiculture. According to USDA, growing plants in water culture without soil is a procedure used by physiologists for studying plant nutrition for more than a century. Many research reports show a 20-25% yield increase using hydroponic technology compared to traditional agriculture techniques. The climatic conditions and land space do not affect the hydroponic system, which is advantageous to farmers who cannot cultivate specific plants due to soil conditions. 

MARKET DRIVERS:

Increasing consumption of leafy vegetables and exotic vegetables free from pesticides is driving the growth of the hydroponics market. The increasing disposable incomes of the people are influencing them to spend more on healthy foods like exotic fruits and vegetables. People are becoming aware of the benefits of consuming fresh vegetables and fruits. The imported exotic fruits and vegetables are high, influencing many research institutes to focus on developing better products with high nutritional value. The increasing investments by the leading market players in research and development activities boost the global hydroponics market growth. Most of the top branded food businesses are demanding fresh, exotic vegetables such as red and yellow capsicum, and lettuce is increasing the growth of the hydroponics market growth. 

The growing awareness among farmers about the benefits of hydroponic technology is boosting the global hydroponics market value. Due to the increased oxygen supply at the roots, the growth rate is higher in plants that use hydroponic technology than traditional agricultural techniques, and crop yields are higher. Hydroponic farming has lower water and nutrition recycling costs and complete control of the growing environment. Increasing urbanization is allowing people to farm their food at home, which is demanding hydroponic technology. 

The growing demand for organic food products due to rising health concerns is expected to accelerate the growth rate of the hydroponics market. In the U.S., hydroponically produced crops are considered and labeled as organic as they meet USDA criteria—the growing popularity of hydroponics for high-profit margins. The increasing demand for hydroponics farming is creating opportunities for the launch of new start-ups and more investors. 

MARKET RESTRAINTS:

Expensive investment for the initial setup of hydroponic farming and high operational costs hampers global market growth. The equipment required for a hydroponic farm, such as HVAC systems, ventilation, control systems, and continuous power supply, costs farmers more than traditional soil culture. The system also facilitates the spread of diseases such as fusarium and verticillium. Complete dependency on the electronic power supply hinders the adoption of hydroponic systems. 

The requirement of skilled personnel to operate hydroponic systems is challenging for the growth of the global market. Due to their low economic status, farmers in emerging countries need more awareness and knowledge of hydroponic farming, hindering the growth of the global hydroponic market. Some regions, such as Europe, do not consider hydroponically farmed crops as organic products. According to a new regulation in 2021, the European Union does not consider hydroponically produced crops as organic and does not label them as such. 

Impact of COVID-19 on the global hydroponics market:

The COVID-19 pandemic impacted the agriculture sector negatively due to lockdown regulations. The strict regulations regarding social distancing and traveling made crop production difficult for farmers. The disruption of the supply chain had a high impact on crops. Adopting indoor farming helped the farmers in crisis, but setting up a hydroponic system is difficult during a pandemic. In the second half of the pandemic, as the regulations eased, agricultural practices resumed, and steady growth in market revenue was observed. 

REPORT COVERAGE:

This research report on the global hydroponics market is segmented and sub-segmented into the following categories.

Global Hydroponic Market - By Equipment:

• HVAC
• LED Grow Light
• Communication Technology
• Irrigation Systems
• Material Handling
• Control Systems

The HVAC system segment dominated the global hydroponics market in 2022 with the largest share, as heating, ventilation, and air conditioning are the primary concerns for healthy plant growth. The system transmits the required temperature through tubes from inside to the surrounding environment. HVAC systems use hot water or steam instead of air to transport the heat. The cost savings and energy efficiency allow the HVAC systems to dominate the market with significant revenue. 

The LED grow lights segment has been gaining traction in recent years and is projected to grow significantly in the hydroponics market over the forecast period. Many researchers are experimenting with using variations in the spectrum of LED grow lights to change crop production's flavor, size, and potency. 

Global Hydroponic Market - By Type:

• Aggregate
  • Closed Systems
  • Open Systems
• Liquid
  • Nutrient Film Technique (NFT)
  • Floating Hydroponics
  • Aeroponics

The liquid system segment dominates the hydroponics market and is estimated to register rapid growth with the highest CAGR in the forecast period. Nutrient film technique systems are widely used to cultivate lettuce and other leafy vegetables. The liquid systems eliminate the solid medium, and the plant's roots are directly submerged in the nutrient solution, giving maximum yield. 

Many farmers are highly adopting closed systems, and these methods provide higher yields, which are expected to grow prominently over the forecast period. 

Global Hydroponic Market - By Crop Type:

• Tomato
• Lettuce & Leafy Vegetables
• Cucumber
• Pepper
• Strawberry

The tomato segment dominated the market with the largest revenue share of 45% in 2022. They are highly considered crops for hydroponic cultivation because they have the fastest growing rate and require low water content. Indoor farmers use coconut coir, perlite, and rock wool as the growing materials for tomato cultivation. The lettuce and leafy vegetables segment is estimated to have the highest growth rate over the forecast period, as hydroponically produced red and green lettuce are in high demand among various food businesses. 

Global Hydroponic Market - By Input Type:

• Nutrients
• Growth Medium

The nutrient segment held the largest share in the global hydroponics market in 2022 due to the high requirement for plant growth. Nitrogen, phosphorus, and potassium are the primary nutrients required for plant development. A macronutrient deficiency results in unhealthy crops, and spots appear on the plant leaves with discoloration. Nitrogen is the major component responsible for the green color of the plants. 

Global Hydroponic Market - By Region:

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa

The European region dominated the global hydroponics market, with the most significant share of 40% in 2022. European countries had the most significant number of greenhouses compared to other regions. Netherlands and Spain are the top countries with greenhouse farming. North America held the second position in dominating the hydroponics market due to the region's high demand for fresh fruits and vegetables. In many small businesses and at home, people prefer growing crops with the hydroponic system in the U.S. Rooftop hydroponic systems are more prevalent in the developed countries. Hydroponically produced crops are considered organic in the U.S., mainly boosting the hydroponics market. Asia-Pacific region held the third position in the adoption of hydroponic systems worldwide. The adoption of hydroponic systems in China, Australia, and South Korea is significantly increasing revenue and is expected to dominate over the forecast period. Rapid urbanization is influencing people to adopt new agricultural methods, and the vast investments by the market players are propelling the APAC market growth. 

KEY MARKET PLAYERS:

ScottsMiracle-Gro, Argus Control Systems, LumiGrow, Inc., Hydrodynamics International, American Hydroponics, Advanced Nutrients, Emerald Harvest, Freight Farms, AeroFarms, Green Sense Farms, Gotham Greens, Bright Farms are some of the major key players in this global hydroponics market.

RECENT HAPPENINGS IN THIS MARKET:

• In May 2023, Microbe Life Hydroponics, a subsidiary of Ecological Laboratories, introduced TERPS Plus, a novel fertilizer enhancer designed to enhance the production of cannabinoids and terpenes in cannabis and hemp plants. 
• In June 2022, InFarm partnered with IKEA to grow high-quality herbs inside the restaurants of three IKEA stores in Germany.
• In January 2022, ScottsMiracle-Gro announced its acquisition of Luxx Lighting, strengthening The Hawthrone Gardening Company's industry-leading lighting portfolio and increasing its offerings. 
• In February 2022, Abu Dhabi's leading fresh produce supplier, Silal, an agri-tech company, and AeroFarms signed a Memorandum of Understanding (MoU) for a long-term research and development collaboration regarding the knowledge and technology transfer of advanced farming systems to local farmers.