The hydroponics market is estimated to be valued at USD 8.1 billion in 2019 and is projected to reach USD 16.0 billion by 2025, at a CAGR of 12.1% during the forecast period. The growth of the hydroponics market is driven by factors such as the need to ensure food security for the increasing population through alternative high-yield farming techniques. 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.
Key Market Players
The hydroponics market is divided into two segments-system input providers and hydroponic crop producers. The key players in the hydroponic system input providers market include Signify Holdings (Netherlands), Argus Control Systems (Canada), Heliospectra AB (Sweden), Scotts Miracle Gro (US), American Hydroponics (US), and LumiGrow (US). The key players in the hydroponic crop producer market include Aerofarms (US), Terra Tech Corp (US), Hydroponic Farms (UAE), Triton Foodworks Ltd. (India), Urban cultivator (Canada), Village Farms (Canada), Green Sense Holdings (US), and Iron Ox (US).
Development of innovative hydroponic technologies
With the increased adoption of hydroponics globally, manufacturers and researchers are working on improving the efficiency of hydroponics technology to increase the quality and quantity of the produce. For instance, Preferred Produce, an organic and kosher greenhouse in Deming, New Mexico, introduced a new patented technology that combines hydroponics with aeroponics. It was developed in partnership with Russian scientists. This new patented technology includes a large plastic urn filled with water and includes tubes for circulating oxygen. This new technology was introduced due to the restricted supply of oxygen when plants are submerged in oxygen in a hydroponics system. Thus, by introducing oxygen supplying tubes, sufficient oxygen can be supplied to the plants. The producer tested this system with strawberries, tomatoes, and bell peppers, and the results showed faster and hardier harvests as compared to other techniques.
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Phytoponics, a UK-based hydroponics growing system company, introduced a similar technology called the Hydrosac, in which roots of the plant are held in contact with an oxygenated, nutrient-rich solution. The concentration of liquid nutrients facilitates high growth rates and resource efficiency. The Hydrosac acts like a long thin container connected to a pump and nutrient solution reservoir. Sitting on the fluid’s surface are integrated flotation chambers in which plants sit within a healthy, rot preventing air gap above water. An inbuilt aerator blows oxygen bubbles through the solution to maintain dissolved oxygen levels for healthy roots. The bubbles burst at the surface, spraying a nutrient-rich mist on to the plant roots, nourishing the plant to grow strong.
Are the high prices of hydroponically grown produce challenging the 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. 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.
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