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The global horticulture lighting market size was valued at USD 5.41 billion in 2021. The market is projected to grow from USD 6.19 billion in 2022 to USD 19.87 billion by 2029, exhibiting a CAGR of 18.1% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with lighting products and horticulture solutions experiencing a slight decline in demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market declined by 1.0% in 2020 compared to 2019.
The report comprises various horticulture lighting products from key players such as Bridgelux Inc., Hortilux Schreder, EYE Hortilux, LumiGrow Inc., Signify Holding (Philips Lighting), GE Lighting, Osram Licht AG, and others. These players offer various horticulture lighting products for growing plants. For instance, Samsung Electronics Ltd. offers indoor and horticulture lighting solutions such as LM301H EVO, LM301H and others for leafy greens, and other white LEDs. In addition, LEDiL lighting solutions provider offers DAHLIA-TL110 models of the Horticultural lightings. These lightings with a specific wavelength effectively suppress the growth of microbes on crops. This helps to cultivate fresher crops with an extended shelf-life that benefits consumers directly. Everlight Electronics Co. Ltd. launched the 3030-ELB, 3535-ELC, 2835-ELB, 5630X-ELB, and LED lights ELB series. These products offer optimized illumination for farmers to enhance crop yields.
The leading players are developing advanced technology-based temperature-controlled lighting for plant growth. For instance,
Transportation and Supply Chain Disruptions Hindered Market Growth
Globally, several countries' governments have imposed lockdowns led by labor shortages, transportation disruptions, and limited access to the local markets. This factor has significantly impacted the production activities for harvest processing, distribution, and cultivation of horticultural products in urban areas. Moreover, traditional farming is currently facing the unprecedented challenge of feeding a rapidly expanding population of around 6.7 billion people to live in urban areas by 2050. The COVID-19 pandemic has negatively impacted the food supply chain, creating ample opportunity for indoor agricultural infrastructure around the globe. Globally, horticultural LED revenue slightly declined by 1.0%, showing USD 4.78 billion in 2020.
Horticulture LED lighting is used for indoor household farming that allows consumers to grow their food during the lockdown and enhances food security. Rising combined, both market-driven agriculture transformation using horticulture LED lighting is increasing rapidly.
Post pandemic, the demand for horticulture farming is expected to increase rapidly due to a surge in awareness about indoor farming among consumers. People around the globe were implementing vertical farming to grow their food to eat. Thus, key players planned to launch advanced technology-based indoor lighting through partnerships and collaborations. For instance,
Such rising expansion of the LED lighting manufacturers for horticulture applications is expected to strengthen the market growth.
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Increasing Demand for Indoor Farming for a Wide Range of Applications to Aid Market Growth
The rising demand for cultivating nutritious and healthy food at home is increasing rapidly around the globe. Indoor farming is gaining popularity in the growing urban areas to meet the demand for food scarcity. According to Investor's PitchBook, in the last quarter of 2021, more than 11 indoor farming venture capital companies were funded over USD 489.6 million, which was more than 7% compared to the previous quarter in 2020. Consumers around the globe are prioritizing the growth of the horticulture sector to meet the food scarcity demand and promote horticultural exports globally. In addition, rapid improvement of lighting technology with higher luminaire efficiencies is gaining the potential opportunity for the horticultural lighting market growth.
Further, post COVID-19 pandemic has inspired new applications for IR sensing to cultivate plants in a controlled environment. IR sensing technology based on artificial lights enables accurate tracking and analysis of plants' growth.
The emergence of innovative agriculture technology for vertical farming based on LED lighting for conditioned weather helps tackle the global food shortage problem. Several leading players are developing advanced LED lighting for worldwide farming and food requirements. For instance,
Increasing Urbanization, Increased Food Costs, and Environmental Deterioration Aids the Market Growth
Rising rapid urbanization brings the opportunity for horticultural production to meet the food demand, which is expected to strengthen market growth. Also, agricultural practitioners and farmers are adopting horticulture farming owing to the lack of availability of irrigation water for farms and increased food costs. According to the U.S. Department of Agriculture, the Consumer Price Index increased 8.5% in July 2022. This CPI and food prices increased by 1.1% from June 2022 to July 2022, and food prices increased by 10.9% in July 2021. Further, the supply of horticultural products to urban areas is increasing owing to rising consumer demand for natural and healthy foods.
Increasing adoption and development of environmentally friendly and energy-efficient LEDs in horticulture to maximize crop yield and reduce energy consumption drives market growth. According to the DesignLights Consortium Organization, the efficiency of sustainable indoor farming could save up to around USD 240 million of energy annually through horticultural lighting optimization. Also, leading players are developing energy-efficient lighting for horticulture applications to meet the growing demand for food. For instance,
Such development of advanced technologies-based LEDs by the key players related to smart agriculture is expected to drive the global horticulture lighting market growth.
High Cost Associated with Manufacturing Which Requires Huge Capital that Hinders the Market Growth
These lighting devices are increasing as more people realize the benefits of horticultural lighting. Plants are grown indoors using a variety of artificial light sources. In the past, HPS and electric ballasts were often used as efficient light sources for indoor agriculture. LEDs are popular today because they remove the limitations of high-pressure sodium (HPS), fluorescent (FL) lamps, metal halides, and electric ballasts. The initial investment required to purchase quality LED lights is greater than the initial investment required to purchase traditional lighting technologies such as fluorescent bulbs and HID (High-Intensity Discharge) lamps. Each LED light unit has an LED array specially designed for horticulture.
Toplighting is expected to Dominate the Market Owing to Strong Demand across the Greenhouse Farming
The market scope includes toplighting and interlighting. Toplighting is expected to have the largest share in 2021. This factor is primarily attributed to the rising adoption and demand for horticulture lighting solutions for greenhouse farming around the globe. According to the Food and Agriculture Organization of the United Nations Report in January 2019, globally, the greenhouse vegetable land reached around 496,800 hectares. Greenhouse crop production is increasing around the globe, with an estimated 405,000 hector of greenhouses all over the continents. Such an increase in the adoption and greenhouse land in the world is expected to strengthen the global horticulture market growth.
Further, vertical farming is expected to grow with the highest CAGR during the forecast period owing to a surge in indoor farming adoption among consumers. According to the International Society for Horticultural Science, the global indoor farming market was valued at around USD 32.3 billion in 2020, with growing demand from emerging countries such as Germany, China, Singapore, Japan, the U.S., and the U.K. simultaneously.
LED Segment to Hold Highest CAGR Owing to Rising Horticulture Productivity
Based on lighting technology, the market scope includes fluorescent, high-pressure sodium (HPS), metal halide, LED, and others (plasma, xenon, and induction lighting). Among these, LED is expected to have the largest share in 2021. This factor is primarily due to a surge in horticulture productivity in developed countries such as U.S., U.K., Germany, France, Italy, and others. Also, LEDs help reduce the energy consumption required to cultivate plants for vertical farming, indoor farming, and others. According to the U.S. Department of Energy, on average, LEDs accounted for around 38% of the cultivation facility's total energy consumption.
Also, high-pressure sodium (HPS) are growing with the moderate CAGR during the forecast period. This factor is primarily owing to its capacity to reduce electricity consumption by around 35.0% compared to the HPS lamps.
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Rising Demand For Food Grains Such As Cereals, Wheat, Rice, Oats, around the Globe Owing to Surge in Global Population Drives Market Growth
The market scope includes indoor, greenhouse, vertical, and other fields (Floriculture). The greenhouse is expected to have the largest share in 2021. This factor is primarily attributed to the rising adoption of these lightings across greenhouse farming around the globe. Also, the increasing demand for food to meet the world's growing population is expected to drive market growth. According to the Food and Agriculture Organization of the United Nations Report, in 2021, global cereals production reached more than 927 million tons, increasing production by around 5% compared to 2020. Such an increase in global cereals production was achieved using greenhouse farming, creating a massive demand for the horticulture lighting market.
Europe Horticulture Lighting Market Size, 2021 (USD Billion)
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Geographically, the market share is fragmented into five chief regions: Asia Pacific, North America, the Middle East & Africa, Europe, and South America. They are further classified into countries.
Europe is anticipated to account for the largest market share in the global market during the forecast period, owing to the presence of leading lighting manufacturers such as Osram Licht AG, Gavita, Valoya, and others. In addition, Countries such as Spain, the Netherlands, France, and Italy have large greenhouse cultivation areas. These countries use LED grow lights for supplemental growth of plants for indoor farming. According to the European Commission Organization, the EU's production of harvested maize and corn was around 67.8 million tons in 2020, which was about a 5.0% increase in the harvested area to 9.4 million hectares despite the COVID-19 pandemic. Such an increase in the cultivation of food grains and fruits & vegetables to meet the growing food demand in European countries has promoted the growth of this market.
North America is expected to grow at a moderate CAGR during the forecast period. This factor is owing to the rising demand from the waste recycling plants with the early adoption and development of the advanced technology-based sorter in this region. This January, Upward Farms promised to build what it said would be the world's largest indoor vertical farm, a 250,000-square-foot behemoth in Pennsylvania slated to open in early 2023. For instance,
Asia Pacific is expected to grow with the highest CAGR due to rising food demand in populated countries such as India and China. In the Asia Pacific, the agriculture sector is a crucial part of development, accounting for around 4% of the global gross domestic product (GDP). In addition, some of the least developing countries in the Asia Pacific region accounted for over 25% of the GDP. Further, the Asia Pacific region has a suitable climate for cultivating fruits, vegetables, and food grains. In addition, horticulture lighting helps cultivate the plants, reducing the additional labor requirements for harvesting the land.
South America's countries' governments are promoting the initiatives and funding for horticulture production owing to the growing demand for food. For instance,
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The Middle East and Africa are growing with moderate CAGR owing to the rising adoption of vertical and indoor farming in the Gulf Countries. Additionally, many governments of these countries are promoting the growth of the horticulture sector as a strategy for meeting regional food demand.
Key Players in the Market are Inventing Advanced Horticulture Lighting
The global market is consolidated with leading players such as Signify Holding (Philips Lighting), GE Lighting, Hortilux Schreder, Osram Licht AG, and others. These crucial players are investing and inventing advanced lighting by adopting corporate strategies such as partnerships, mergers, acquisitions, and collaborations. For instance,
An Infographic Representation of Horticulture Lighting Market
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The global market research report offers qualitative and quantitative insights into the market and a detailed analysis of the size & growth rate for all possible segments in the market. It also elaborates on market research, dynamics, emerging trends, and the competitive landscape. Key insights offered in the report are the adoption of automation by individual segments, recent industry developments such as partnerships, mergers & acquisitions, consolidated SWOT analysis of key players, business strategies of leading market players, macro and micro-economic indicators, and key industry trend analysis.
Value (USD billion)
By Type, By Lighting Technology, By Application, and By Region
By Lighting Technology
The global market is predicted to reach USD 19.87 billion by 2029.
In 2021, the market value stood at USD 5.41 billion.
The market is projected to grow at a CAGR of 18.1% during the forecast period (2022-2029).
The interlighting segment is expected to show the highest CAGR during the forecast period.
Europe dominated the market owing to the rising vertical and greenhouse farming in emerging countries such as Germany, Italy, France, and others
By application, the greenhouse segment leads the market owing to the growing cultivation of food grains, fruits & vegetables, and others.
High costs associated with manufacturing horticulture lighting for vertical farming and greenhouse applications restrain the markets growth.
Increasing urbanization, food costs, and environmental deterioration aid market growth.
Some of the top players in the market are Signify Holding (Philips Lighting), GE Lighting, Hortilux Schreder, Osram Licht AG, and others.
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