The Emerging Hydroponics Industry

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The Emerging Hydroponics Industry: Hydroponics Systems, Issues, Crop Values, and Global Market Forecasts

The global population recently crested 7 billion and is projected to pass 9 billion by 2050. An ever-larger portion of Earth’s residents live in cities without producing their own food. At the same time, our dominant food paradigm is breaking down: climate change, increasing droughts, soil depletion and disease, excess fertilization, phosphorus scarcity, water pollution, chemical overloads, pollinator destruction, and biodiversity loss threaten our business-as-usual approach to food production. In recognition of these concerns, consumers and retailers are increasingly demanding safer, high-quality foods with less unpaid burden on our shared environment and public health. Hydroponics is an agricultural technology and practice that can help  feed the cities of the future while meeting customer demands and ensuring the health of ecological systems that sustain a livable world.

This report provides a competitive assessment of the hydroponic food production market and the forces shaping it, the technologies and skill sets involved, and some key players and their prospects. It also covers important issues and trends affecting agriculture and food security that make hydroponics a viable and growing market—in particular, global phenomena like climate change that transcend any given market or firm—and identifies strategies and tools for risk mitigation and a sustainable, profitable path forward.


There are a variety of risks, challenges, and barriers to ramping up investments in hydroponics, including cost, operational complexity, qualified labor, and energy. This report discusses various challenges to market growth in depth:

Cost: It’s generally more expensive to start up and operate a hydroponics operation than it is to plant seeds in fields. A hydroponic greenhouse can cost anywhere from 2 to 20 times more than soil-based farming and even more with some ultramodern technologies that are gaining ground in the urban food production wave.

Qualified Staff: The agrarian workforce is shrinking: The average age of a farmer (hydroponic or otherwise) is between 50 and 66 years in many developed countries, and it’s increasing in developing countries. Fewer young people are getting into agriculture in any world region. Even among agrarian workers, experienced agricultural engineers and horticulturalists are hard to come by. Even nonmanagerial staff need both agricultural know-how and higher-level training to handle a more complex work environment.

Irrational Exuberance: Tremendous yield potential can blind prospective hydroponic growers and investors to the fundamentals: Hydroponics is not magic, it’s an agricultural system with specific strengths and liabilities. Making the most of the system means having the technical proficiency to deeply understand plant growth and productivity in that system.

Energy Issues: Addressing energy needs is one of the key trials facing the hydroponics industry, particularly in northern latitudes. Heating is a major component of operational costs for greenhouses in northern Europe and other countries with cold winters; heating and other energy used for automation increase the carbon footprint of these operations. The countries for which they provide so much economic, trade, and food security benefits will continue to accelerate their efforts to design more-efficient systems and utilize renewable resources to enhance the sector’s energy security.

Market Growth

Agriculture is a very conservative sector with many barriers to change and an inertia where “traditional” methods persist. Nevertheless, the drivers for transformation are more compelling. Movement toward protected agriculture is already surging worldwide, and soilless cultivation is riding that wave. The worldwide market value of hydroponically produced food will grow at 6.5 percent compound annual growth rate (CAGR) over the five-year forecast period from 2013 to 2018. This is a healthy pace compared to world gross domestic product (GDP) growth, which has ranged from 2.5 to 4.0 percent since the Great Recession, and is forecast at 2.9 percent for 2014.

As shown in the chart, producer value will increase from $17.7 billion to 24.3 billion US dollars (USD). The growth will be relatively steady because of the buffering effect of large and mature European markets and consistency in Asia Pacific, but there will be acceleration over the period thanks to hotter markets in North America and Eastern Europe.

Value of Hydroponic Food Crop Production by Region, World Markets, 2013–2018

Value of Hydroponic Food Crop Production by Region, World Markets, 2013–2018

Report Bundle: PDF document and Microsoft Excel Spreadsheet
Length: 142 pages with accompanying workbook of 21 charts, tables and figures
Authors: Dulcey Simpkins, PhD and Carol L. Stimmel

© Manifest Mind, LLC 2014

Section 1: Executive Summary

1.1           Why Hydroponics? Introduction to the Issues
1.2           Tools for Sustainable Intensification of Agriculture
1.3           Challenges and Barriers to Hydroponics
1.4           Hydroponic Food Production Market Forecast
1.5           The Way Forward

Section 2: Market Drivers and Inhibitors

2.1           Introduction
2.2          Market Drivers
2.2.1         Yield: The Intensification of Agricultural
2.2.2         Arable Land
2.2.3         Water Conservation
2.2.4         Water Quality
2.2.5         Pesticide and Herbicide Reduction
2.2.6        Labor Intensity
2.2.7         Good Jobs, Good on-the-Job Results
2.2.8        Consistent Availability and Quality of Produce
2.2.9         Food Safety and Traceability
2.2.10      Organic and Non-GMO
2.3          Market Inhibitors
2.3.1         Capital Intensity and Risk
2.3.2         Qualified Labor
2.3.3         Energy Requirements
2.3.4         Ease of Doing Business
2.3.5         Disease

Section 3: Technical Issues

3.1          No Single Answer: A Continuum of Agricultural Intensification
3.2          Site Requirements
3.3          Crop Type and Seeds
3.4          Hydroponic System Types
3.4.1         Water-Based Systems
3.4.2         Substrate Systems
3.5          Irrigation and Open Versus Closed Systems
3.6          Fertigation
3.7          Sterilization and Recirculation
3.8          Greenhouses, Ventilation, and Climate Control
3.8.1         Choosing Appropriate Technology for Business Needs and Context
3.9          Processing and Packaging
3.10        Lighting
3.11         On-Site Energy

Section 4: Key Industry Players

4.1          Overview

4.2          Success in the Hydroponics Market
4.2.1         Argus Controls
4.2.2         Association of Belgian Horticultural Cooperatives
4.2.3         BrightFarms
4.2.4         Center for Science in the Public Interest
4.2.5         Circle Fresh Farms
4.2.6        Divemex
4.2.7         Dr. Howard Resh Hydroponic Services
4.2.8        FormFlex
4.2.9         Fresh Studio
4.2.10      Green City Growers Cooperative
4.2.11       Grodan
4.2.12       Hoogendoorn
4.2.13       HortiMaX
4.2.14       Hortiplan
4.2.15       Institute for Simplified Hydroponics
4.2.16      KUBO Greenhouse Projects
4.2.17       Le Gaga
4.2.18      Lufa Farms
4.2.19       NatureSweet
4.2.20        Philips Lighting
4.2.21       Priva
4.2.22      Richel Greenhouse
4.2.23      Rijk Zwaan
4.2.24        Tasty Tom
4.2.25      Thanet Earth
4.2.26        University of Arizona Controlled Environment Agriculture Center
4.2.27      Valoya
4.2.28        VB Group
4.2.29        Village Farms
4.2.30        Wageningen University and Research Centre

Section 5: Market Forecast

5.1          Forecast Introduction
5.2          Factors in the Determination of “Value”
5.3          Competitive Landscape and Cautionary Note
5.4          Assumptions Determining This Forecast
5.5          Worldwide Hydroponics Production Base by Region
5.6          Worldwide Hydroponic Crop Value by Region
5.7          Hydroponic Area by Crop Segment: Current and Forecast
5.8          Hydroponic Crop Value by Segment and Region: Current and Forecast
5.8.1        Hydroponic Tomato Value by Region
5.8.2        Hydroponic Peppers Value by Region
5.8.3        Cucumbers Value by Region
5.8.4        Lettuces Value by Region
5.8.5        Other Crops Value by Region

Section 6: Conclusions and Recommendations

6.1          Conclusions
6.2          Recommendations

Section 7: Company Directory

Section 8: Acronyms and Abbreviations

Section 9: Table of Contents

Section 10: Table of Charts and Figures

Section 11: Sources and Methodology


Chart 1.1 Value of Hydroponic Food Crop Production by Region, World Markets, 2013–2018
Chart 2.1 Yields by Crop Segment: Hydroponic Versus Open Field
Chart 2.2 Variation in Yield of Peppers Among Greenhouses Using Soil or Hydroponics
Chart 5.1 Land Area Under Hydroponic Food Crop Production by Region, World Markets 2013–2018
Chart 5.2 Value of Hydroponic Food Crop Production by Region, World Markets 2013–2018
Chart 5.3 Share of Hydroponic Food Crop Production Value by Region, 2013 Versus 2018
Chart 5.4 Change in Share of Value of Hydroponic Production by 2018, World Markets
Chart 5.5 Area Under Hydroponic Production by Crop Segment, World Markets 2013
Chart 5.6 Value by Hydroponic Crop Segment, World Markets 2013–2018
Chart 5.7 Comparison of Crop Segment Value and Growth, 2013 Versus 2018
Chart 5.8 Hydroponic Tomatoes Value, World Markets 2013–2018
Chart 5.9 Hydroponic Peppers Value, World Markets 2013–2018
Chart 5.10 Hydroponic Cucumbers Value, World Markets 2013–2018
Chart 5.11 Hydroponic Lettuce/Greens Value, World Markets 2013–2018
Chart 5.12 Hydroponic Other Crops Value, World Markets 2013–2018

Table 2.1 Improved Water Performance of Hydroponic Glasshouse Tomatoes over Field Cultivation
Table 2.2 Decline of World Agricultural Population, 1990–2020

Figure 2.1 Molded plastic channels to allow nutrient transmission directly to roots without leaching
Figure 2.2 Photo from space of plastic greenhouses covering 20,000 hectares near Almería
Figure 2.3 Dead Zones Around the World, of Both Known and Unknown
Figure 3.1 Venlo-Style Glasshouses, Westland, The Netherlands