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continued growth, not affected by recession
New report on Hydroponic Crop Farming in the US
During the five years to 2013, revenue for the Hydroponic Crop Farming industry has maintained positive growth, indicating that the recession had a minimal effect on industry operators. 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, the 2012 drought in the continental United States harmed agricultural industries all across the board, presenting an opportunity for hydroponic crop farmers. Consequently, industry revenue jumped 8.1% due to this unmet demand. In the five years to 2013, industry revenue is expected to increase at an average annual rate of 3.6% to $606.8 million. In 2013 alone, revenue from hydroponic crop farming is anticipated to grow 4.9% as a result of rebounding demand from fruit and vegetable markets.
No drastic changes are expected within the industry over the next five years. Revenue will continue to increase over the five years to 2018. 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," says IBISWorld Industry Analyst Agiimaa Kruchkin. 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 low. The two largest companies are Eurofresh Farms and Village Farms International. 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 2013. 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. According to Kruchkin, "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.
Please click here for more information and the full report.
For more information:
Tel: 1-800-330-3772
www.ibisworld.com
No drastic changes are expected within the industry over the next five years. Revenue will continue to increase over the five years to 2018. 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," says IBISWorld Industry Analyst Agiimaa Kruchkin. 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 low. The two largest companies are Eurofresh Farms and Village Farms International. 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 2013. 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. According to Kruchkin, "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.
Please click here for more information and the full report.
For more information:
Tel: 1-800-330-3772
www.ibisworld.com
Publication date:
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