Global hydroponics market by crops (tomato, lettuce, cucumber, pepper, marijuana & others)

HYDROPONICS MARKET BY CROPS (TOMATO, LETTUCE, CUCUMBER, PEPPER, MARIJUANA &

OTHERS): A Global Insight Through 2015 to 2020 with Special focus on the U.S. & India Market

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Hydroponics Market By Crops (Tomato, Lettuce, Cucumber, Pepper & Others)

A Global Insight Through 2015 to 2020 with Special focus on the U.S. & India Market

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1 EXECUTIVE SUMMARY

The agriculture sector is one of the oldest and the most established sector for any country’s

economy. The idea of taking crops out of soil and growing in a completely soil-less medium is

still surprising for the mass. Hydroponics is the fastest growing soil-less farming practice at a

global level, wherein a tailored nutrient solution is used for the crop to attain its full growth

with a superior quality in a sustainable manner.

The technique introduced several advantages in terms of increased yield, higher returns on

investment, and protected environment among others, attracting a larger share of producers

as well as investors. The global hydroponics crop value is anticipated to grow from $XX billion

in 2014 to $XX billion in 2020 at an estimated CAGR of XX % from 2015 to 2020.

FIGURE 1

COMPARING THE HYDROPONIC CROP VALUE BY REGION

($MILLION), 2015-2020

XX XX XX XX XX

Americas 2424.39 2643.45 2888.56 3470.68 4085.44

Europe 9,821.71 10,348.11 10,906.31 12,126.90 13,383.78

Growth 5.33% 5.36% 5.39% 5.47% 5.54%

Asia Pacif ic 6,171.93 6,609.60 7,081.29 8,138.50 9,235.75

Growth 7.05% 7.09% 7.14% 7.23% 7.32%

Africa 324.34 348.25 373.97 431.42 490.97

Growth 7.36% 7.37% 7.39% 7.41% 7.44%

South America 98.32 107.13 116.80 139.06 162.38

Growth 8.86% 8.96% 9.03% 9.15% 9.31%

Middle East 74.46 78.55 82.93 92.65 102.71

Growth 5.43% 5.50% 5.58% 5.74% 5.90%

MEA 398.79 426.80 456.91 524.07 593.68

XX

XX

XX

XX

XX

XX

XX

XX

XX

($ M

illi

on

)

Source: BIS Research

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The European region led the global hydroponics market in 2014 with an estimated crop value

of $XX billion and will continue with this dominance growing over $XX billion by 2020 at an

estimated CAGR of XX% through 2015 to 2020.

The Americas will be growing at the highest CAGR, attaining a market size worth $XX billion of

global hydroponic crop value by 2020 at an estimated CAGR of XX% from 2015 to 2020.

Developing countries of Middle East and Africa will continue contributing smaller shares to the

global hydroponic crop value through the forecast period.

Where greenhouse farming is an established concept at a global level, Greenhouse hydroponic

farming is still making home in developing countries of Middle East and Africa and densely

populous regions of Asia Pacific.

There are certain factors which are driving the demand of hydroponically grown crops such as

Copious produce quantity over shorter duration when compared to traditional farming

techniques, profitable farming without “associated” environmental degradations of soil, water,

etc, and increasing use of medicinal plants (and legalization of medical marijuana) among

others. The most attractive feature of using hydroponics instead of conventional farming is

without any doubt the increased yield. The following figure will exemplify the significant

increase in yields when using hydroponics and soil-based farming.

FIGURE 2

COMPARING THE YIELD QUANTITY: HYDROPONICS VS. OPEN FIELD

FARMING


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2 GLOBAL HYDROPONICS MARKET SNAPSHOT

FIGURE 3

ASIA PACIFIC HYDROPONIC CROP VALUE ($MILLION), 2015-2020

XX

XX

XX

XX

XX

XX

XX

XX

2014 2015 2016 2017 2018 2019 2020

($ M

illi

on

)

Tomato

Pepper

Cucumber

Lettuce

Other


Asia Pacific is the second largest market in the global hydroponics market in terms of crop

value. Despite of being one of the most populous regions, the Asia Pacific’s hydroponic crop

value will only increase from $X.XX billion in 2014 to $X.XX billion in 2020 at an estimated

CAGR of X.XX% through the same period.

Tomatoes will be a prominent crop in the Asia Pacific region; however other crops such as

eggplants and strawberries in Australia will provide a significant contribution to the regions

total crop value. Cucumber will account for a crop value of almost $XX billion by 2020, growing

at a CAGR of XX% through the forecast period.

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3 HYDROPONICS MARKET DYNAMICS

3.1 GLOBAL HYDROPONIC MARKET DRIVERS

FIGURE 4

UNDERSTANDING HOW HYDROPONICS CAN ENSURE FOOD

SECURITY

Able to be established within a city as opposed to rural locations

Uses fewer resources through controlled and precise energy and water consumption

Scalable from home-sized to commercial level

Safer food and better control

Can grow year-round, less dependent on seasons

Produces higher yields faster

Less labor intensive through automation


The above figure states that hydroponics is beneficial as it is less labor intensive provides with

higher yields all year round and ensures better control through fewer resources (energy &

water).

When approximately one in every seven people in the world is a hungry mouth to feed, it is

rather important to understand that hydroponics and other alternatives to agriculture are

pivotal in the fight against global food crisis. Since the food energy requirements in the

developing world is expected to double by the middle of the next century, agricultural

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production and investment will both need to increase. But figures reveal that official aid and

public spending on agriculture in developing countries have fallen sharply in recent years.

3.1.1 HYDROPONICS SYSTEMS ARE LIKE FOOD

FACTORIES WITH APPRECIABLE CONSISTENCY IN QUANTITY AND QUALITY

Traditional farming is a daunting task and is rather imperative in countries such as India,

whose economy is largely dependent on agriculture and its output. With the burgeoning global

population, food shortage, and soaring prices there emerged an alarming need of alternative

yet effective techniques of farming. Hydroponics has so far proven to be one of the most

successful cultivation techniques among other soilless farming methodologies. Apart from a

few vegetables such as potatoes, most of the fruits and vegetables are seasonal. Moreover,

many countries import exotic vegetables such as strawberries, rockets from international

producers since the climatic condition do not favor their cultivation.

3.1.2 INCREASING USE OF MEDICINAL PLANTS (AND

LEGALIZATION OF MEDICAL MARIJUANA)

TABLE 1

COMPARISON OF GROWING MARIJUANA IN SOIL-BASED AND SOIL-

LESS MEDIUM

Parameters Soil-based (Conventional) Soil-less (Hydroponics)

Growth Slower growth than hydroponics Plants are faster to grow

Yield Satisfactory yields, but lesser than

hydroponics

Precise configuration of several

factors such as temperature, etch

increases yield significantly

Level of complexity Easy to grow, not much expertise Slightly complicated, since growers

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Parameters Soil-based (Conventional) Soil-less (Hydroponics)

required must have information about exact

nutrient combinations, growing

conditions, etc.

Disease & Infection Usually detected when the disease or

any other problem spreads

Shows early signs of diseases which

can be easily corrected

Feature of

customization

Once the seeds are sown, only

external modifications can be catered

to

Hydroponics allow the users to

grow the plant with their desired

preference for shape, size, color,

and nutrients


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4 ANALYSIS OF KEY CROPS IN THE GLOBAL

HYDROPONICS MARKET

4.1 TOMATOES

Tomatoes will continue with its trend of market hegemony, maintaining a XX% market value

share of value throughout the forecast period. The net crop value for hydroponic tomatoes was

approximately $X.XX billion in 2014 which is anticipated to grow over $XX.XX billion by 2020

at an estimated CAGR of X.XX% through the forecast period.

TABLE 2

VALUE OF HYDROPONICALLY PRODUCED TOMATOES BY REGION

($MILLION), 2015-2020

Region 2014 2015 2016 2018 2020 CAGR

Americas XX XX XX XX XX XX%

Europe XX XX XX XX XX XX%

Asia Pacific XX XX XX XX XX XX%

MEA XX XX XX XX XX XX%

Total XX XX XX XX XX XX%


The Americas are poised to grow over $X.XX billion through the forecast period. Hydroponic

tomatoes from this region will grow at a CAGR of XX % over the forecast period. Overall value

will grow from nearly $XX billion in 2014 to $XX billion in 2020, an increase of almost XX% in

value. The U.S. will lead the North American market for hydroponically grown tomatoes,

thanks to a large number of players in the country.

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5 GEOGRAPHICAL ANALYSIS FOR GLOBAL

HYDROPONICS MARKET

5.1 AMERICAS

The hydroponic market for the Americas is the summation of the market figures of North

America and the developing countries of South America. North America is widely being touted

as the game changer in the global hydroponic market, with the presence of market giants such

as the Village Farms International among others.

TABLE 1

VALUE OF HYDROPONIC FOOD CROP PRODUCTION IN THE

AMERICAS, 2015-2020 ($MILLION)

Americas 2014 2015 2016 2018 2020 CAGR

Tomato XX XX XX XX XX XX%

Pepper XX XX XX XX XX XX%

Cucumber XX XX XX XX XX XX%

Lettuce XX XX XX XX XX XX%

Other XX XX XX XX XX XX%

Total XX XX XX XX XX XX%


The Americas with established markets of North America and developing market of South

America will grow at the highest CAGR of X.XX% from 2015 to 2020. The total crop value will

account for $X.XX billion by 2020 growing from $X.X billion in 2014.

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6 INDIAN HYDROPONICS MARKET STATISTICS AND

DYNAMICS

6.1 INDIAN HYDROPONICS MARKET DRIVERS

6.1.1 EVOLVING POPULATION OF MIDDLE CLASS WITH INCREASING DISPOSABLE INCOME

For a market that is as price sensitive as India is, the increasing level of disposable income is

playing a major role in adoption of Hydroponics produce. Earlier, the consumers were hesitant

in spending higher sums of money when it came to buying fruits and vegetables. However,

with the growing awareness about hydroponics and its associated advantages, end-users are

willing to pay a higher cost for similar products otherwise grown traditionally.

India has currently a dominant section of middle class, and therefore is a promising end-user

segment for Hydroponics. Moreover, this particular section of the Indian population is

continuously expanding in terms of figures and therefore there is more of a need to fulfil the

demands with alternative agricultural practices. There is a noticeable price difference between

the hydroponically grown produce and the one grown conventionally and it is difficult to make

every individual understand the benefits of opting soil-less agriculture produce. This is the only

reason that the demand for hydroponically grown fruits and vegetables is very less and hence

the higher price.

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FIGURE 5

PRODUCTION SCENARIO FOR EXOTIC VEGETABLES IN INDIA (2014)

XX%

XX%

Imported

Grown in India


Currently more than XX% of the exotic vegetables consumed in India are imported and only

XX% is grown locally. The unfortunate part is that India has all the resources to grow and even

export large quantities of high end produce, but the slow adoption of soilless farming practices

is largely inhibiting the growth of that idea.

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7 ANALYSING THE INDIAN HYDROPONICS MARKET

7.1 SWOT ANALYSIS FOR HYDROPONICS IN INDIA

The seeds of hydroponics in India were planted in 2008, but it’s only recently that this market

segment has started gaining traction in the country. Since the market is at an incipient stage,

it is important to analyze the driving and restraining factors for hydroponics in India. Moreover,

since strong competition is imposed from the conventional practices of farming, this segment

will touch upon the threats that hydroponics industry faces in the country. Also, the market

opportunities, which have the potential to ramp up the demand of hydroponically grown

produce in India, are analyzed.

FIGURE 6

SWOT ANALYSIS FOR HYDROPONICS IN INDIA

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STRENGTHS

OPPORTUNITIES

WEAKNESSES THREATS

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TABLE 2

COMPARING THE YIELD QUANTITIES FOR CONVENTIONAL,

GREENHOUSE, AND HYDROPONICS FARMING

Name of Crop Production(Tons/Ha)

Particulars Open (Conventional) Greenhouse

(Conventional) Hydroponics

Tomato XX XX XX

Cherry Tomato XX XX XX

Green Capsicum XX XX XX

Colored capsicum XX XX XX

Green Chilly XX XX XX

Cucumber XX XX XX

Iceberg Lettuce XX XX XX

Coriander XX XX XX

French Bean XX XX XX

Squash XX XX XX

Chinese Cabbage XX XX XX

Spinach XX XX XX

Celery XX XX XX

Parsely XX XX XX

Straw berry XX XX XX


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7.2 INDIAN MARKET OPPORTUNITY EVALUATION

7.2.1 LETTUCE

7.2.1.1 Def in ing compet itors

It is important to understand the exact definition of competitors for lettuce in our study. Every

grower/producer and supplier for lettuce in the Indian market is considered as a competitor

since the end product is ultimately lettuce, irrespective of the method adopted to grow it. The

Indian lettuce market enjoys the presence of more than XX key players including both

producers and suppliers.

FIGURE 7

INDIAN LETTUCE PRODUCERS/SUPPLIERS

XX%

XX%

XX%Producer

Producer & Supplier

Supplier


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TABLE 3

COMPARISON OF HYDROPONICALLY AND CONVENTIONALLY GROWN

LETTUCE

Basis Conventional Lettuce Hydroponic Lettuce

Growth The soil lettuce grew XX inches The hydroponics lettuce only

grows XX inches.

Yield

9000 lb

Conventional growing yields only

three heads annually.

21000 lb

Using Hydroponics for growing

lettuce, yields about 64 heads of

lettuce per square foot annually

Growth Duration

It takes a head of lettuce from

seedling to harvest around two

months in soil.

It takes a head of lettuce from

seedling to harvest in around a

month in hydroponics.

Cost The soil system cost $XX. The hydroponics system cost $XX.

Maintenance The soil system simply needs to

be watered as needed.

The hydroponics system required

a lot of maintenance. The pH of

the nutrient solution had to be

checked every 3 days and

changed every 9-14 days. The

nutrient solution level, the air

pump and drip ring also had to be

checked and adjusted.

Space utilization

There is no provision that crops

can be stacked over each other

unlike in hydroponics

Hydroponics saves an incredible

amount of space.

Water Utilization

Production of Lettuce through

conventional means use 125

liters of water per kilogram

Hydroponic lettuce use circulating

nutrient reservoir. It saves around

XX% of the water used in soil

gardening

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Basis Conventional Lettuce Hydroponic Lettuce

It uses 30 liters (large scale) and

19 liters (small scale) of water per

kilogram.

Weeding Regular weeding is required. No soil, no weeds.

Pests & Diseases

Soil borne diseases and pests

plague conventional lettuce

gardening.

Eliminating soil also eliminates a

lot of the different soil borne

diseases and pests.

Land Requirement It can only be done on fertile

land.

It can be built on non-arable lands

and close to major city markets. It

can work in a variety of

environments: urban, suburban,

countryside, desert etc.


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7.2.2 BUYER’S REQUIREMENT

TABLE 4

PRICE COMPARISON FOR CONVENTIONALLY AND HYDROPONICALLY

GROWN LETTUCE

Particulars Hydroponics Lettuce Conventional Lettuce

Average Price of Lettuce $XX-$XX $XX-$XX

Average Price of Cherry Tomato

$XX-$XX $XX-$XX


7.2.2.1 Branding/Labeling

The presence of a brand name or label associated with the product has significant impact on

the consumer attraction towards that product. Especially in the context of fresh food

marketing, branding is an important source of information in consumer decision making.

Branding and labeling a product offers the following benefits which are often demanded or

rather required by the users.

7 . 2 . 2 . 1 .1 P r o du c t Qu a l i t y

Consumers will often pay more for a product that they associate with high quality and

dependability. This is only possible when an establish brand joins hand with local producers

and suppliers

7 . 2 . 2 . 1 .2 C h o i c e

Consumers value the freedom of choosing from among the many offerings in a given product

category, and branding makes this possible by identifying each offering. Especially for a

country like India where it’s very easy to buy fresh fruits and vegetables, brand names add

value to the products making it easier for the consumer to choose a known product.

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8 KEY HYDROPONIC PRODUCERS PROFILE

8.1 VILLAGE FARMS INTERNATIONAL

8.1.1 PRODUCT PORTFOLIO

FIGURE 8

VILLAGE FARMS PRODUCT PORTFOLIO

Product Portfolio

Tomato Cucumber Ball Pepper


Trademarks of Tomatoes Registered

Juicy Beefsteak

Delectable TOV

True Rebel Mix

Lip Smackn’ Grapes

Mini Sensations

Baby Beefs

Savory Roma

Sinfully Sweet

Lip-Smackn’ Grapes

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Heavenly Villagio Marzano

Trademarks of Bell Peppers Registered

Sweet Bells

Trademarks of Cucumbers Registered

Luscious Seedless Long English

Scrumptious Mini

8.1.1.1 Financials

FIGURE 9

VILLAGE FARMS OVERALL FINANCIALS 2011-2013 ($ MILLION)

Source: Village Farms Website, BIS Research

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Data & Analytics

Global hydroponics market by crops (tomato, lettuce, cucumber, pepper, marijuana & others)