The pesticide-free and organic nature of hydroponic vegetable growth has spurred demand
Los Angeles, CA (PRWEB) November 05, 2012
In the five years since 2007, revenue for the Hydroponic Growing Equipment Stores industry has grown aggressively, with virtually no signs of slowdown due to the recession. During the period, more individuals focused on healthy eating and consuming organic produce. Produce that is grown in a hydroponically often time meets organic standards and rarely uses pesticides. “As a result, industry retailers experienced a spike in demand from both small farms and individuals that wanted to set up a hydroponic greenhouse to grow organic foods,” says IBISWorld industry analyst Nima Samadi. In addition, the medical marijuana boom in certain states fueled rising interest in hydroponic growing methods, encouraging consumers and businesses with the relevant accreditations to try their hand at this nascent industry and purchase hydroponic growing equipment. From 2007 to 2012, industry revenue will rise at an average of 7.7% per year, with revenue expected to increase 7.4% to $542.6 million in 2012.
This growth is expected to continue through 2017. Demand for quality organic produce will keep rising, fostering demand for hydroponic growing equipment and the stores that sell it. Furthermore, according to See Change Strategy LLC, the medical marijuana market could reach $8.9 billion by 2016 (compared with $1.7 billion in 2011). In addition, about 25.0 million Americans are potentially eligible to use medical marijuana based on their diagnoses, yet fewer than 800,000 currently do. As the medical marijuana industry continues to grow and more eligible patients opt for alternative treatment options like marijuana, a rising amount of medical marijuana will need to be produced to keep up with demand. According to Samadi, those producers, whether they are large scale growers or patients that are growing for personal use, will increasingly turn to hydroponic growing equipment and hydroponic equipment retailers to grow high quality medical marijuana. As revenue and demand continue to expand during the next five years, the number of industry establishments is projected to grow strongly. IBISWorld also expects profitability to continue to grow over the next five years as new products emerge, consumer demand stays stable and retail prices increase.
The Hydroponic Growing Equipment Stores industry carries a very low level of market share concentration, as there are no firms that currently hold a market share over 1.0%. The industry is characterized by its widespread, fragmented nature, with roughly 1,630 retail outlets spanning across the United States. Some firms operate more than one establishment; however, the majority of the industry is dominated by independent storefronts. Over the next five years, IBISWorld expects concentration to remain low and relatively unchanged as new firms enter the industry without many existing firms expanding locations. For more information, visit IBISWorld’s Hydroponic Growing Equipment Stores in the US industry report page.
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IBISWorld industry Report Key Topics
This industry is primarily engaged in selling hydroponic growing equipment. Hydroponics is a method of growing plants using mineral nutrient solutions in water, without soil.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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