Demand for quality organic produce will keep rising, fostering this industry's growth
Los Angeles, CA (PRWEB) November 03, 2011
Similar to the past five years, the Hydroponic Crop Farming industry is projected to expand in the next five years, according to latest report from IBISWorld, the nation’s largest publisher of industry research. From 2011 to 2016, revenue is forecast to grow at an average annual rate of 4.4% to $674.9 million. An increased focus on healthy eating habits will boost demand; further, consumers will look to buy more food locally, supporting this growth. Also, the industry will continue to fill the gap, when poor weather conditions hurts fresh field farmers' goods. On the other hand, Mexico is expected to increase its hydroponic crop farming output, which may pose a threat to the industry. Nevertheless, in 2012, revenue is set to rise as more consumers demand local and organic produce.
In the five years since 2006, revenue for the Hydroponic Crop Farming industry has maintained positive growth, indicating that the recession had a minimal effect on participants. During the period, more individuals focused on healthy eating and consuming organic produce, resulting in high demand. In addition, extreme weather conditions damaged many crops for fresh field farmers, so grocery stores and farmer's markets quickly turned to hydroponic farmers to meet their demand. From 2006 to 2011, industry revenue rose at an average of 7.8% per year. Further, in 2011, revenue is expected to increase. Rising food prices are also supporting growth, since food is largely a non-discretionary necessity.
Concentration in the Hydroponic Crop Farming industry is higher at the top, with the two largest companies, Eurofresh Farms and Village Farms International, dominating the market. IBISWorld projects industry concentration will remain steady over the next five years as expansion by the top firms is mitigated by growing consumer demand for locally grown produce.
According to IBISWorld analyst, Mary Gotaas, from 2011 to 2016, revenue in the Hydroponic Crop Farming industry will continue to increase. “Revenue is forecast to rise to $674.9 million,” says Gotaas. “Demand for quality organic produce will keep rising, fostering this industry's growth.” In addition, “poor weather conditions are projected to increase downstream purchasers' reliability on hydroponic farmers.” Mexican imports will pose a small threat to their industry, as the country increases its hydroponic farming capabilities. Nevertheless, as consumers increase their desire to buy locally, Mexican imports will not be too substantial.
As revenue and demand continues to expand in the next five years, the number of enterprises is projected to grow. The number of industry firms is expected to increase to 3,361 companies. Many of these new firms will focus on growing exclusively organic fruit to help meet the demand at fresh markets. Other operators will start farms to solely provide goods on a local basis
For more information, download the full report from IBISWorld on the Hydroponic Crop Farming industry
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