COMMERCIAL GREENHOUSE MARKET ANALYSIS

The global commercial greenhouses market size was valued at US$ 42.36 Billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 6.2% from 2023 to 2030. The global commercial greenhouse market is growing at a significant rate due to rapid urbanization, increasing adoption of modern farming techniques, rising population leading to high demand for fruits and vegetables, and decreasing arable land forcing farmers which is increasing indoor agricultural practices including commercial greenhouses. Furthermore, government interventions such as export subsidies, tariffs or import levies and direct payments to growers are also augmenting growth of the market. Moreover, growing inclination of consumers towards organic food products is creating lucrative opportunities for the commercial greenhouses industry.

Global Commercial Greenhouse Market: Regional Insights

Based on geography, the global commercial greenhouses market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Regionally, North America is expected to dominate the global commercial greenhouse market over the forecast period owing to the increasing advancement in greenhouse cultivation in the US which attracting more farmers to adopt this technology. The US commercial greenhouse market was valued at 5,587.8 units in 2020, and it is estimated to reach 7,548.7 units by 2026, registering a CAGR of 4.9% during the forecast period.

Europe is expected to witness significant growth over the forecast period owing to the growing commercial greenhouse market in UK. The United Kingdom commercial greenhouse market was valued at US$ 923.0 Billion in 2020, and it is estimated to reach US$ 1,332.7 Billion by 2026, registering a CAGR of 5.5% for the forecast period. The United Kingdom accounted for 8.2% of the European commercial greenhouse market in 2020.

Figure 1. Global Commercial Greenhouse Market, By Region, 2023

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Global Commercial Greenhouse Market Drivers:

Decreasing arable land is expected to drive growth of the commercial greenhouse market

According to the baseline projections in the EU Agriculture Outlook for the period 2018-2030, the total arable land in Europe is anticipated to decline at a much higher rate by 2030, primarily attributing to the increasing level of urbanization in the region, which has affected the efficiency of the utilized agricultural area (UAA). So, there is s need to increase the crop yields in the coming years in order to meet the food demand driven by population growth and rapid urbanization.

Growing demand for food to foster market growth

According to the UN estimates, around 10 billion people are anticipated to shift to cities by 2050. This growth, coupled with the rising incomes in developing countries, is leading to dietary changes, such as increasing demand for consumption of high protein and meats, which, in turn, are driving up global food demand. The food demand is anticipated increase around the world from 59% to 98% by 2050. This factor is compelling farmers to adopt modern farming techniques, such as greenhouses, which can enable them to produce a wide range of vegetables at varied climatic conditions.

Global Commercial Greenhouse Market Opportunities:

Growing awareness regarding the advantages of commercial greenhouse is expected to provide significant market growth opportunities. In addition to monitoring and adjusting environmental factors, greenhouses must be well-equipped with irrigation systems. Most growers use overhead sprinklers or micro irrigation systems to irrigate their plants. This helps save on labor costs and ensures that each plant receives the amount of water it needs.

Increasing use of artificial intelligence in greenhouses is expected to serve significant major growth opportunities. This is a relatively new technology that enable farms to make more informed decisions regarding crop production. This is done by using machine learning algorithms to evaluate plant health, detect insects, and predict when a crop will be ready for harvesting.

Global Commercial Greenhouse Market Trends:

Increasing focus of key players on business expansion

Key players are highly focused on expanding their business presence and this trend is expected to be continue in near future as well. For instance, in November 2018, Lumigrow Inc. expanded its business to Europe at GreenTech Amsterdam with the debut of its newest fixture, the LumiGrow TopLight, to bring its smart horticultural experience to European consumers.

Growing investment in the market

By considering the potential in commercial greenhouse cultivation, investors are investing heavily in the start-ups. For instance, in September 2020, US based greenhouse grower Revol Greens, raised USD 68 Billion funding in 2020, to open a lettuce greenhouse plant in Texas, which will be the largest in the world with 20 acres and the ability to expand to 80 acres in total.

Global Commercial Greenhouse Market Restraints:

High initial investment to hamper market growth

Typically, greenhouse produce need high startup costs and raising enough capital. This is one of the greatest challenges for the entrepreneurs. Moreover, the profit margins are very less with specific products, thereby hampering market growth.

Commercial greenhouse structure use high energy

Greenhouse used for vegetables, fruits, flowers or herbs require significant electricity to heat and cool the structure. In order to minimize energy consumption. Also, an extensive knowledge of horticulture and agriculture is required for successful operation of a greenhouse. All these factors are expected to hinder the market growth.                                  

Figure 2. Global Commercial Greenhouse Market, By Type, 2023

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Global Commercial Greenhouse Market Segmentation:

The global commercial greenhouses market report is segmented into equipment type, crop type, greenhouse type, and geography

Based on Equipment Type, the market is segmented into heating systems, cooling systems, and other equipment types. Out of which, heating systems is expected to promising type in the global market over the forecast period. They are one of the key component of greenhouses and hold largest market share. The heating systems segment was valued at USD 440.2 Billion in 2020, and it is projected to reach US$ 787.4 Billion by 2026, witnessing a CAGR of 9.8% during the forecast period.

Cooling systems segment is also expected to witness significant growth in the near future and this is owing to the growing demand from few countries of Asia Pacific and Middle East which require heavy cooling equipment as these countries have high temperatures which limit crop growth.

Based on Crop Type, the market is segmented into Fruits and Vegetables, Flowers and Ornamentals, Nursery Crops, and Other Crop Types. Out of which, Fruits and Vegetables is expected to dominate the global market over the forecast period. The fruits and vegetable segment was valued at US$ 20,836.6 Billion in 2020, and it is projected to reach US$ 29,905.5 Billion by 2026, witnessing a CAGR of 6.1% during the forecast period.

Flowers and Ornamentals segment is also expected to witness significant growth in the near future. The flowers and ornamentals segment was valued at US$ 5,096.4 Billion in 2020, and it is projected to reach US$ 7,440.7 Billion by 2026, witnessing a CAGR of 6.4% during the forecast period.

Based on Greenhouse Type, the market is segmented into Glass Greenhouses and Plastic Greenhouses. Out of which, Glass Greenhouses is expected to dominate the global market over the forecast period and this is attributed to their visual appeal and also it allow most amount of light to pass through. The glass greenhouse segment was valued at US$ 1,004.1 Billion in 2020, and it is projected to reach US$ 1,773.6 Billion by 2026, witnessing a CAGR of 9.6% during the forecast period.

Plastic Greenhouses segment is also expected to witness significant growth in the near future. The plastic greenhouse segment was valued at US$ 656.9 Billion in 2020, and it is projected to reach US$ 1,189.8 Billion by 2026, witnessing a CAGR of 10.1% during the forecast period.

Global Commercial Greenhouse Market: Key Developments

In November 2019, LumiGrow, in partnership with Scanit Technologies, launched the LumiGrow SporeCamTM sensors, which can capture, inspect, and classify harmful airborne spores for diseases such as Powdery Mildew and Botrytis. The result is commercial greenhouse growers can optimize disease management practices, minimize yield losses, and monitor the effectiveness of their treatments.

In August 2019, LumiGrow launched TopLight Hybrid smart fixture. The LumiGrow Hybrid spectrum is an enriched white spectrum that takes the best of HPS and metal-halide strategies and improves upon them by boosting the red and blue for both commercial greenhouse and indoor crop production.

In May 2020, Certhon collaborated with DENSO Corporations, Japan, and established a joint venture called DENSO AgriTech Solutions, Inc. This joint venture will help the company to sell its greenhouse products to Japan and other Asian countries.

In June 2018, Certhon officially  inaugurated  the  new innovation center in Rome. This innovation center will help the company to explore the opportunities in effective cultivation of greenhouse crops.

In January 2019, Argus Control Systems Ltd partnered with Hydrofarm Holdings Group Inc. to provide advanced environmental systems and services for horticultural production in the United States and Canada.

Global Commercial Greenhouse Market: Key Companies Insights

The global commercial greenhouses market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis. Some of the key players in the global commercial greenhouses market are Richel Group, Argus Control Systems Ltd, Rough Brothers Inc., Certhon, Logiqs BV, Lumigrow Inc., Nexus Corporation, Hort Americas, Heliospectra AB, and Agra Tech Inc.

*Definition: Commercial greenhouse are used worldwide in many different types of crop production for the purpose of growing crops at a time and place that cannot be accomplished outdoors. They are also utilized in order to produce crops of a quality that cannot be produced at the same level under natural conditions.