Revenue will continue climbing as demand for local and organic produce heightens
New York, NY (PRWEB) January 26, 2015
During the five years to 2015, revenue for the Hydroponic Crop Farming industry has maintained positive growth. Over the five-year period, a growing number of individuals shifted to 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 farmers markets quickly turned to hydroponic farmers to meet their demand. In particular, drought throughout many parts of the United States during the past five years harmed agricultural industries across the board, presenting an opportunity for hydroponic crop farmers. In the five years to 2015, industry revenue is expected to somewhat increase.
No drastic changes are expected within the industry over the next five years. Revenue will continue to increase slowly over the five years to 2020. Vegetable and fruit consumption has plenty of room to grow to meet Americans' dietary standards. IBISWorld expects that industry associations and government spending will help promote healthy eating through vegetable marketing. 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 the domestic industry, as the country increases its hydroponic farming capabilities. Nevertheless, as consumers increasingly purchase locally grown produce, imports will not pose a substantial threat.
Concentration in the Hydroponic Crop Farming industry is high. The three largest companies in the industry, NatureSweet, Houweling's Tomatoes and Village Farms, account for a large percentage of industry revenue. These players benefit from managing their own distribution networks and marketing agreements, which have enabled them to increase their market share over the five years to 2015. In addition, their revenue figures have attracted the attention of large private equity and hedge fund managers, who have helped them access debt markets to fund expansion. In contrast, the rest of the industry is composed of small farms. Consumer demand has helped grow the number and earnings for small hydroponic farms, but their market share is limited because of their production capacity, distribution constraints and smaller localized demand. 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.
As revenue and downstream demand continue to expand in the next five years, the number of enterprises is projected to grow. Over the five years to 2020, the total number of industry firms is expected to increase slowly. Many of these new firms will focus exclusively on growing organic fruits and vegetables to help meet the demand at fresh markets. Meanwhile, other operators will start farms to provide goods solely on a local basis.
For more information, visit IBISWorld’s Hydroponic Crop Farming in the US industry report page.
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IBISWorld industry Report Key Topics
Hydroponics is a method of growing plants using mineral nutrient solutions in water, without soil. Operators in this industry generally grow food crops under glass or protective cover.
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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