The pesticide-free, organic nature of hydroponically grown produce has spurred demand.
New York, NY (PRWEB) February 11, 2014
The Hydroponic Growing Equipment Stores industry has grown aggressively over the past five years, with virtually no signs of damage resulting from the recession. During the five years to 2014, more individuals began to focus on healthy eating and consuming organic produce. Produce that is grown hydroponically often meets organic standards and rarely uses pesticides. Consequently, industry retailers experienced a spike in demand due to small farms and individuals seeking to set up hydroponic greenhouses to grow organic foods. From 2009 to 2014, industry revenue is anticipated to rise at an annualized rate, with revenue expected to increase in 2014.
Given that hydroponically grown produce typically consists of premium products, industry operators are able to charge high prices for quality hydroponic systems. As a result, industry profit margins have steadily increased over the past five years as demand has accelerated. In 2014, profit is anticipated to total a significant share of revenue and will continue to increase over the next five years.
In addition to demand for organic produce, a boom resulting from the growing prevalence of medical marijuana and marijuana legalization in certain states has fueled rising interest in hydroponic growing methods. Changing conditions in the marijuana industry have encouraged consumers and businesses with the necessary accreditations to try their hands at this nascent industry and purchase hydroponic growing equipment. Furthermore, Colorado and Washington State legalized recreational marijuana consumption in 2012, creating new markets for marijuana cultivation.
The Hydroponic Growing Equipment Stores industry carries a very low level of market share concentration, with no single firm holding more than a small portion of market share (see IBISWorld report OD6013 for major player market shares). Industry revenue is forecast to rise per year in the five years to 2019. The popularity of quality organic produce will rise, fostering demand for industry products. Furthermore, according to See Change Strategy LLC, the medical marijuana market could jump from 2011 to 2016. As the medical marijuana industry continues to grow and eligible patients opt for alternative treatments, according to IBISWorld Industry Analyst David Yang, “more medical marijuana will need to be produced to keep up with demand.” In addition, “a large number of Americans are potentially eligible to use medical marijuana based on their diagnoses, although fewer than 800,000 currently do,” says Yang. Producers, whether they are large-scale growers or patients growing for personal use, will increasingly turn to hydroponic equipment retailers to procure high-quality medical marijuana.
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
The Hydroponic Growing Equipment Stores 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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