Hydroponics Market Assessment, By Type [Aggregate Hydroponics, Liquid Hydroponic Systems], By Crop Type [Leaf Lettuce, Tomatoes, Peppers, Cucumbers, Strawberries, Watercress, Celery, Herbs], By Farming Method [Indoors, Outdoors], By Region, Opportunities

Hydroponics Market Assessment, By Type [Aggregate Hydroponics, Liquid Hydroponic Systems], By Crop Type [Leaf Lettuce, Tomatoes, Peppers, Cucumbers, Strawberries, Watercress, Celery, Herbs], By Farming Method [Indoors, Outdoors], By Region, Opportunities and Forecast, 2017-2031F

Global hydroponics market is projected to witness a CAGR of 7.62% during the forecast period 2024-2031, growing from USD 4.52 billion in 2023 to USD 8.13 billion in 2031. The global hydroponics market is at the forefront of agricultural innovation, redefining the dynamics of crop cultivation by embracing soil-less, water-based systems. One of the primary drivers propelling the market's growth is the increasing recognition of hydroponics as a sustainable solution to address traditional farming limitations.

Escalating global population, urbanization, and decreasing arable land availability have intensified the need for efficient and space-saving farming methods, positioning hydroponics as a viable alternative. Technology’s ability to maximize resource efficiency, especially water, is a critical factor amid growing concerns about environmental impact and water scarcity.

Innovations in hydroponic systems, including advanced nutrient delivery mechanisms, sensor technologies, and automation, are enhancing precision and control over growing conditions. The heightened control boosts yield and facilitates year-round crop production, mitigating the effects of seasonal variations. Moreover, the market is witnessing a surge in demand driven by the increasing popularity of local and fresh produce, as hydroponics enable cultivation in urban areas and facilitates the establishment of vertical farms.

The convergence of technology and agriculture is evident in the incorporation of data analytics, AI-driven monitoring, and smart farming practices in hydroponic setups, further elevating the efficiency and productivity of the industry. As the global emphasis on sustainable agriculture grows, the hydroponics market is poised for sustained expansion, driven by ongoing innovation, environmental consciousness, and the imperative to meet the demands of a burgeoning global population.

For instance, in December 2022, a new indoor vertical farm capable of producing seven tons of greens daily was announced to open in northeastern Pennsylvania. The farm, to be operated by Crop One Holdings, will be the first of ten farms the company plans to build over the next five years. The Pennsylvania location is expected to surpass the output of Crop One's Dubai farm, which currently produces three tons daily, making it one of the largest hydroponic vertical farms in the world. The farm is set to begin production by mid-2024.

Rising Food Demand and Limited Land Resources

The global hydroponics market is sustained by the intersecting challenges of rising food demand and limited land resources. As the global population expands, particularly in urban areas, the demand for food increases, exerting pressure on traditional agriculture. Hydroponics emerges as a solution to the dilemma by allowing efficient cultivation in limited space, including urban environments and regions with constrained arable land. The method's soil-less approach and resource optimization address the limitations imposed by traditional farming. Hydroponics' ability to deliver high yields in a controlled environment, coupled with its potential for year-round production, position it as a viable response to the pressing need for sustainable and space-efficient agricultural practices, meeting the escalating demand for fresh, locally sourced produce while mitigating the impact on limited land resources.

Growing Demand for Organic and Specialty Crops

The global hydroponics market is witnessing a significant upswing due to the escalating demand for organic and specialty crops. Consumers increasingly prioritize healthier and sustainably produced food, resulting in a surge in the cultivation of organic produce through hydroponic systems. Hydroponics offers a controlled environment, minimizing exposure to pesticides and fostering the production of high-quality organic crops. The method's adaptability facilitates the growth of specialty crops that might face challenges in traditional farming, meeting the diverse preferences of consumers for unique and exotic varieties. With hydroponics providing an efficient and resource-optimized platform for cultivating these crops, it stands at the forefront of meeting the rising demand for organic and specialty produce in a manner that aligns with contemporary health and environmental consciousness.

For example, in September 2023, BrightFarms and Element Farms formed a partnership to introduce Element Farms' indoor-grown spinach to the Northeast under the BrightFarms brand. The collaboration aims to meet the increasing consumer demand for high-quality, locally grown spinach. Element Farms, a sustainable farm based in New Jersey, grows its greens hydroponically and without pesticides in a controlled environment, allowing it to manage light, carbon-dioxide, water, and nutrients given to its crops. The partnership is a significant move for sustainable agriculture, as both companies are recognized as trailblazers in sustainable, controlled environment agriculture (CEA).

Technological Advancements and Innovation

Technological advancements and continuous innovation play a pivotal role in propelling the global hydroponics market forward. The integration of cutting-edge technologies has transformed hydroponics into a sophisticated and efficient cultivation method. Precision monitoring systems, automated controls, and sensor technologies enable growers to optimize environmental conditions, ensuring precise nutrient delivery and fostering optimal plant growth. Additionally, advancements in nutrient formulations contribute to enhanced crop yields and nutritional quality. The incorporation of data analytics and artificial intelligence facilitates real-time decision-making, improving overall operational efficiency. Smart hydroponic systems further empower farmers with remote monitoring and control capabilities, allowing for increased flexibility and responsiveness. As the industry continues to evolve, these technological developments elevate productivity and sustainability and position hydroponics as a frontrunner in modern, technology-driven agriculture.

For instance, in December 2023, Pure Food Technology created a groundbreaking hydroponic, robotic, solar-powered prototype. The innovation requires 95% less water and yields 100 times more plant-based crops than traditional farming methods. The company aims to scale up the vertical farm technology to reduce UAE's USD 7.7 billion vegetable food import bill and achieve self-sufficiency in plant-based food production. The technology is driven by artificial intelligence, solar energy, and robotics, which is the world's first of its kind and has been patented in the UAE.

Government Regulations

Government regulations play a crucial role in shaping the hydroponics market. As the industry gains prominence, regulatory frameworks are evolving to ensure safety, quality, and environmental standards. Many countries are recognizing hydroponics as a viable agricultural method and are establishing guidelines for nutrient solutions, water quality, and overall system management. Additionally, governments are increasingly acknowledging the potential of hydroponics in addressing food security concerns, especially in urban areas. Incentives, subsidies, and supportive policies are being introduced to encourage farmers to adopt hydroponic practices. However, the regulatory landscape varies, and compliance requirements differ across regions, influencing market dynamics. Continued collaboration between governments and the hydroponics industry is essential to foster a conducive environment for sustainable growth, innovation, and widespread adoption of advanced farming technique.

For example, in January 2024, the Indian government offered subsidies to farmers who embrace hydroponic farming with an aim of promote sustainable agriculture and increasing food production in the country. The amount of subsidy vary based on the type of hydroponic setup, size of the farm, and the crops being grown. These subsidies are provided through various government schemes such as the National Horticulture Board National Mission on Micro Irrigation and others. The National Horticulture Board provides the subsidy for hydroponic farm set up under Scheme-1, and the exact subsidy varies for each state.

Future Market Scenario (2024 – 2031F)

Every household in Tier I, II, and III cities will eventually use fresh and hygienic produce due to the controlled environment and precision farming of hydroponics, which reduces dependency on monsoons. The staggered and controlled production of hydroponics allows for regulated demand and supply of produce, leading to consistent prices and availability of vegetables. The dual benefit of hydroponic farming affects both customers and farmers positively.

Hydroponics farming is a promising solution for conserving water in agriculture, which is critical as water scarcity become an increasing worldwide concern. Traditional soil-based farming methods often require large amounts of water, with much of it being wasted through evaporation and runoff. Hydroponics, on the contrary, uses water much more efficiently, with studies showing water savings of up to 90% compared to conventional farming methods.

Key Players Landscape and Outlook

The global hydroponics market features a dynamic landscape with key players driving innovation and market expansion. Industry leaders such as BrightFarms and Thanet Earth Limited contribute significantly to the market's growth through technological advancements, research initiatives, and strategic collaborations. With a focus on sustainable and high-yield agriculture, these players are investing in cutting-edge solutions, including advanced nutrient formulations, precision monitoring systems, and automation technologies. Moreover, established agricultural companies, such as Village Farms International, Inc., are leveraging their expertise to enhance hydroponic practices. The outlook for the global hydroponics market remains optimistic, marked by continued investment in R&D, strategic partnerships, and the increasing adoption of hydroponic systems across diverse agricultural applications.

For instance, in August 2023, the Punjab Agricultural University (PAU), India, obtained a national patent for its indigenous hybrid hydroponics technology, which is a significant advancement in India's agricultural innovation. The national patent was granted for the innovative improvement of water and nutrient delivery in pot-based substrate hydroponics, which combines two distinct soilless technologies. The technology, known as Hybrid Hydroponics Technology (HHT), aims to make soilless farming more accessible for adoption in both rural and urban settings, for commercial production and domestic rooftop gardening.

For instance, in May 2023, AeroFarms announced a national expansion with Amazon Fresh, by making its products available online and at all Amazon Fresh grocery store locations. The partnership follows AeroFarms' successful national launch with Whole Foods Market in 2022, where it became the first indoor leafy greens grower to be part of Whole Foods Market's Global Planogram.

[4:50 PM] Shraddha Jain

In 2022, Freight Farms announced a USD 17.5 million Series B3 funding round, co-led by Aliaxis SA and Ospraie Ag Science, to bolster its efforts in enabling universal access to food cultivation with its adaptable, modular container farms and farm automation software. Spark Capital, Stage 1 Ventures, and Alkaline Partners also participated in the round. Freight Farms specializes in vertical hydroponic farming within shipping containers, aiming to foster resilient and self-sustaining communities capable of year-round production of fresh, local, and nutritious food.