Horticulture Lighting Market

[160 Pages Report] The overall horticulture lighting market was valued at USD 2.08 billion in 2017 and is expected to reach USD 6.21 billion by 2023, at a CAGR of 20.61% from 2018 to 2023.

“Latent markets in APAC to fuel the growth of the horticulture lighting market”

APAC is expected to be the fastest-growing market for horticulture lighting. Growing urbanization in the developing countries of this region positively affects the growth of the market owing to the rapid population growth and availability of limited agricultural land. APAC constitutes thriving economies, such as Japan, China, India, and Australia, which are expected to register high growth rates in the market.

Market Dynamics

Drivers

• Rapid population growth and availability of limited agricultural land
• A steady supply of crops despite unfavourable weather conditions for farming across geographies
• Government initiatives to support adoption of energy-efficient LEDs in horticulture
• Increased year-round high-quality yield
• Legalization of cannabis for medicinal purposes

Restraints

• High cost of energy-efficient LED grow light technologies
• Feasibility of cultivating limited number of crop species

Opportunities

• Retrofitting traditional lighting sources with LED grow lights
• Increasing awareness about vertical and indoor farming

Challenges

• Adoption of controlled-environment agriculture technique for large-sized fields
• Requirement for different light spectrums for certain crop varieties
• Scarcity of required technical know-how

The Objectives of the Study are as follows:

• To describe and forecast the market, in terms of offering, technology, lighting type, cultivation, and application
• To describe and forecast the market, in terms of value, by region—North America, Europe, Asia Pacific (APAC), and Rest of the World (RoW)
• To provide detailed information regarding major factors influencing market growth (drivers, restraints, opportunities, and industry-specific challenges)
• To strategically analyze micromarkets with regard to individual growth trends, prospects, and contributions to the total market
• To study the complete value chain of horticulture lighting
• To strategically profile key players and comprehensively analyze their market position in terms of ranking and core competencies, along with detailing competitive landscape for market leaders
• To analyze strategic approaches such as product launches, acquisitions, contracts, agreements, and partnerships in the market

The base year used for this study is 2017, and the forecast period considered is from 2018 to 2023.

Key Questions the Report Answers

• Most of the suppliers have opted product launch and development and acquisition as the key strategies as could be seen from the recent developments. Where will it take the industry in the mid-to-long term?
• Which are the key players in the market, and how intense is the competition?

Research Methodology

The research methodology used to estimate and forecast the global horticulture lighting market begins with obtaining data on key vendor revenues through secondary research. Some of the secondary sources used in this research include various journals and databases such as the International Artificial Grow Light Association (IAGLA), the Association for Vertical Farming, the Japan Plant Factory Association, the International Society for Horticultural Science (ISHS), IEEE journals, Factiva, Hoovers, and OneSource. Multiple on-field discussions have been conducted with key opinion leaders across each major company involved in the development of horticulture lighting for various applications in different regions to understanding the demand for horticulture lighting products in various regions. Then, the overall shipment of horticulture lighting solutions has been calculated based on the technology (fluorescent, HID, LED, and others). The average selling price was then calculated based on diverse types of horticulture lighting products.

The overall market size was arrived at by multiplying the total shipment derived with the average selling price (ASP) of the products. After arriving at the overall market size, the total market has been split into several segments and subsegments, which have then been further verified through primary research by extensively interviewing the key officials in the industry, such as CEOs, VPs, directors, and executives. The market breakdown and data triangulation procedures have been employed to complete the overall market engineering process and arrive at the exact statistics for all segments and subsegments. The breakdown of the profiles of primaries has been depicted in the figure below:

To know about the assumptions considered for the study, download the pdf brochure

The horticulture lighting ecosystem comprises manufacturers, distributors, and service providers, such as Signify (Philips Lighting) (Netherlands), Gavita (Netherlands), GE Lighting (US), Osram (Germany), and Agrolux (Netherlands), Heliospectra (Sweden), Hortilux Schreder (Netherlands), Lumileds (Netherlands), PARsource (US), Illumitex (US), Hubbell (US), Maxigrow (UK), Bridgelux (US), Eye Hortilux (US), Lumigrow (US) for to various applications according to their specific requirements.

The Target Audience:

• Original equipment manufacturers (OEMs)
• Research organizations
• Start-up companies
• System integrators
• Government bodies, venture capitalists, and private equity firms
• Manufacturers of horticulture lighting solutions
• ODM and OEM technology solution providers
• Horticulture lighting distributors and retailers
• Technology standard organizations, forums, alliances, and associations
• Technology investors

“The study answers several questions for the target audiences, primarily which market segments to focus on in next 2 to 5 years for prioritizing the efforts and investments.

Report Scope:

In this report, the market has been segmented into the following categories:

Horticulture Lighting Market, by Offering:

• Hardware
• Software & Services

Horticulture Lighting Market, by Technology:

• Fluorescent Lamps
• High-Intensity Discharge (HID) Lights
• LED Lights
• Other Technologies (Plasma and Induction)

Horticulture Lighting Market, by Lighting Type:

• Toplighting
• Interlighting

Horticulture Lighting Market, by Cultivation:

Get more insight on other
• Fruits & Vegetables
• Floriculture

Horticulture Lighting Market, by Application:

• Greenhouses
• Vertical Farming
• Indoor Farming
• Others (Research and Tissue Culture)

Horticulture lighting Market, by Geography:

• North America (US, Canada, Mexico)
• Europe (the UK, Germany, the Netherlands, Scandinavia (Sweden, Norway, Denmark, Finland, and Iceland), Rest of Europe (France, Switzerland, Russia, and Belgium)
• Asia Pacific (China, Japan, Australia, New Zealand, neighboring islands in the Pacific Ocean, and the Island of New Guinea), and Rest of APAC (Singapore, Taiwan, South Korea, India, Malaysia, Indonesia, and the Philippines)
• Rest of the World (the Middle East, South America, and Africa)

Available Customizations:

With the given market data, MarketsandMarkets offers customizations according to the company’s specific needs. The following customization options are available for the report:

Company Information:

• Detailed analysis and profiles of additional market players

Product Analysis

• Product Matrix, which gives a detailed comparison of the product portfolio of each company

Company Information

• Detailed analysis and profiling of additional market players (up to 5)

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The overall horticulture lighting market is expected to grow from USD 2.43 billion in 2018 to USD 6.21 billion by 2023, at a CAGR of 20.61% from 2018 to 2023. The growth of this market is being fueled by the rapid population growth and availability of limited agricultural land.

The report covers the Market based on offering, technology, lighting type, cultivation, application, and geography. The market based on application is expected to be led by greenhouses. Greenhouses allow horticulture to be practiced in a protected environment, ensuring optimum yield. Greenhouses are designed to trap natural sunlight and humidity and retain them, making it conducive for growing various types of plants.

Horticulture lighting systems consist of both hardware and software. Hardware includes lamps, fixtures, reflectors, reflective films, ballasts, and others. Software includes light controlling software, while services such as planning, installation, and maintenance have also been considered in the report. Hardware holds the largest share of the market compared to software and services as software offerings and services are relatively newer in the market for horticulture lighting.

In 2017, LED lights accounted for the largest share of the market based on technology since these lights are energy-efficient and also have additional benefits such as low heat, compact size, and a long operational life of 30,000 to 50,000 hours.

Toplighting is the most widely used lighting type in indoor cultivation. In this, lamps, with a particular spectrum of light, are positioned above the plants. Interlighting is a relatively new concept in horticulture lighting in which lights are placed inside the canopy of high-wire plants, which directs and focuses growth-stimulating light on the most vital parts of the crop, such as its leaves and veins. Toplighting, being the traditional method of lighting, holds a larger share of the market.

Horticulture lights are being used for the cultivation of fruits and vegetable, and floriculture. The fruits and vegetables segment includes tomatoes, lettuce, basil, mint, mustard greens, collard greens, strawberries, and cucumbers. The floriculture segment includes roses, cannabis, African violets, poinsettia, and begonia. The cultivation of fruits and vegetables is done on a larger scale compared to floriculture; hence the fruits and vegetables segment held a larger share of the market in 2017.

Demand for horticulture lighting systems in vertical farming applications is expected to increase during the forecast period. The rise in the growth of the vertical farming industry can be attributed to the interest shown by larger corporations in vertical farming operations. Toshiba (Japan) and Panasonic (Japan) have started providing financial and technical assistance to growers for setting up vertical farms. Such developments in vertical farming are boosting the market growth. Hence, the vertical farming application is expected to witness the highest CAGR in the market during the forecast period.

Europe is expected to continue to account for the largest share of the market, in terms of value, in the coming years owing to the increased adoption of horticulture lighting in greenhouses, vertical farming, and indoor farming applications. The European Union’s initiatives to boost the adoption of LED grow lights are expected to create more opportunities for the manufacturers of LED modules and lamps in that region. Signify (Philips Lighting) (Netherlands) and Gavita (Netherlands) are the most prominent Europe-based lighting companies.

Rapid population growth and availability of limited agricultural land to drive the industry forward

Greenhouses

Greenhouses allow horticulture to be practiced in a protected environment, ensuring optimum yield. Greenhouses are designed to trap natural sunlight and humidity and retain them, making it conducive for growing various types of plants. Polyhouses/polytunnels are greenhouses made of polyethylene. Plants can be grown either by using soil as a base or by adopting the hydroponic technique. Plants grown in greenhouses are protected from external factors (dirt and natural elements), and with proper care, they can be protected from insects and pests as well. Thus, the greenhouses application accounted for the largest share of the market in 2017.

Vertical Farming

Vertical farming is changing the outlook of food production. Increased use of LED horticulture lights is encouraging cultivators to adopt vertical farming on a large scale. In vertical farming, plants are stacked in layers one above the other, utilizing the available space in the best possible way. Consumer demand for high-quality, locally developed food that is free of pesticides and other harmful chemicals is increasing. With vertical farming, space is not a constraint, and cultivators can grow crops even in a square foot of area. Despite changing climatic conditions, vertical farming also allows cultivators to grow all types of crops throughout the year.

Indoor Farming

The ever-growing population worldwide is generating additional demand for food, which cannot be met only through conventional or outdoor farming. However, advancements in horticulture lighting technologies allow indoor farming to increase crop yield efficiently. Horticulture light systems act as the primary light source in indoor farming, in the partial or complete absence of natural light. Signify (Philips Lighting) (Netherlands) has established GrowWise, a city farm facility focusing on cultivating a variety of crops, such as strawberries, potatoes, herbs, and leafy vegetables. The company plans to use LED horticulture lights to increase crop production in its indoor farming facilities.

The key restraining factors impacting horticulture lighting market growth include the high cost of energy-efficient LED grow lights and the feasibility of cultivating a limited number of crop species. The impact of this restraint is high at present; however, in the future, the impact is expected to subside as the prices of LEDs are decreasing day by day.

A few major companies operating in the horticulture lighting market are Signify (Philips Lighting) (Netherlands), Gavita (Netherlands), GE Lighting (US), Osram (Germany), and Agrolux (Netherlands), Heliospectra (Sweden), Hortilux Schreder (Netherlands), Lumileds (Netherlands), PARsource (US), Illumitex (US), Hubbell (US), Maxigrow (UK), Bridgelux (US), Eye Hortilux (US), and Lumigrow (US).

Critical questions that the report answers:

• Where will all the current developments take the industry in the mid-to-long term?
• Will the suppliers continue to explore new avenues in the market? 
• What are the upcoming products and technologies in horticulture lighting?

To speak to our analyst for a discussion on the above findings, click Speak to Analyst