Hydroponic Market – Opportunities and Challenges

Northbrook, IL, USA, 2019-Oct-14 — /EPR Network/ —

The overall hydroponics system market is projected to grow from USD 8.1 billion in 2019 to USD 16.0 billion by 2025, at a CAGR of 12.1%. Hydroponic systems provide higher yield compared to traditional agricultural techniques, owing to the increase in harvest cycles. Furthermore, hydroponic systems eliminate the use of artificial ripening agents and pesticides, which helps in creating nutritionally superior vegetable products. The market for hydroponics is fragmented at the global level, with multiple innovative start-ups and emerging companies entering the hydroponics market. Major companies have been trying to enter this space, either by developing hydroponic components or by investing in the technology for crop cultivation.

The fruits segment is projected to have the fastest growth rate among other crop types in the hydroponics market. Fruits grown using hydroponics can be grown and harvested throughout the year due to the interior conditions of the greenhouse or indoor farming unit. Water-adaptable fruits such as watermelon, strawberries, cantaloupe, and tomatoes are among the ideal choice of farmers, as they are easier to grow using hydroponic methods. Hydroponics for fruits is majorly used in North American and European countries. Since these fruits have a high market value, farmers are inclined to increase the production of these type of fruits using advanced agriculture technology such as hydroponics, to increase their profit margin.

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The liquid hydroponics systems segment is projected to have the fastest growth rate during the forecast period. In this system, no rigid supporting medium for the plant roots is used. Liquid hydroponic systems can be effective for fast growth and large yield since plants have direct access to oxygen and food in the form of functional mineral compounds.

The Asia Pacific hydroponics market has strong potential to become the leading market in the coming years. The region has also been susceptible to the effects of climate change that have had a profound impact on agriculture produce. The increasing instances of droughts, floods, and other natural disasters in countries such as India, China, and Japan have raised concerns over food security. This has spurred the adoption of indoor hydroponic agriculture in the region. China is projected to be the fastest-growing market for hydroponic farming in the region and has displayed notable growth potential.

Are the high prices of hydroponically grown produce challenging market growth?

The prices of hydroponically grown produce are higher than that of conventionally grown produce, which can be attributed to the high costs of production associated with hydroponic farming. While tax cuts in certain locations can help ease the burden on growers, in developing regions, the high-cost factor is the key reason for the inflated costs of hydroponically grown produce. Against conventionally grown produce, this produce can represent cost inflation of 8%–12% depending upon the produce and the region it is being grown in.

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This cost overrun is a key hindrance to commercial hydroponic growers for whom the high upfront costs represent a low return on investment in the long run. Considering the debate over organic classification, consumers are yet to become aware of the benefits posed by hydroponically grown produce. While the vegetables offer greater nutritional value with regard to standard produce, the high costs of the final produce can discourage some buyers.