The Horticulture Lighting market is expected to record a CAGR of 20.61% over the forecast period (2021 - 2026). Effective spectral distribution of light is important for the growth of plants. Increasing awareness about the same is expected to propel the demand for the horticulture lights.
- Weather change is one of the significant causes augmenting the demand for horticulture lights to maintain a controlled agriculture environment. Horticulture lights help in maximizing crop yield and save energy with new lighting solutions. These qualities of horticulture lights and their rising awareness among farmers are likely to gain momentum for the market studied over the forecast period. Increase in the number of food-suppliers and farm start-ups are further expected to encourage the adoption of horticulture lights.
- The importance of LED lighting applications in the horticultural sector is growing with the rising trend of indoor and vertical farming applications. With controllable spectrum and illuminance, LED is widely used in cultivation for several kinds of crops such as tomatoes, herbs, greens, and cucumbers, among others. A South Korean agriculture cultivator, Farm8 has been using LED technology to help plants grow. With this technology, a plant can be grown in around 35 days, when compared to the time taken (i.e. 50 days) by a plant to grow outdoors.
- The growing population across the world is generating additional demand for food, which is difficult to be met only through conventional farming. However, advancements in horticulture lighting enable indoor agriculture to increase crop yield efficiently. Horticulture light acts as the primary light source in indoor farming, in the complete absence or partial of natural light. Companies such as Signify (Philips Lighting) established GrowWise, a city farm facility focusing on cultivating a variety of crops, such as strawberries, leafy vegetables, etc. The company has planned to utilize LED horticulture lights to increase crop production in its indoor farming facilities.
- The coronavirus epidemic has relatively slighter impact on the industry due to oversupply in the past few years. Only the packaging companies suffered a little from lack of manpower during the China lockdowns. Therefore, it is not likely to see much changes in the ecosystem and supply chain structure of the LED industry.
- Nevertheless, the COVID-19 pandemic does drive more application opportunities for the LED industry including germicidal UVC LEDs, social distance controlling infrared sensors, and horticulture lighting to back food supply.
Key Market Trends
LEDs are Expected to Hold a Significant Share
- The LED technology is gaining popularity in the horticultural sector, mainly due to NASA, which continues to conduct plant-growth experiments under LED lighting. It shows immense potential as horticultural lighting fixtures because of low energy consumption, cool operation and the capability to customize the spectral output to emit the specific wavelengths usable by plants.
- These lights are also more cost-efficient than other artificial light sources. LEDs do not burn out like traditional light bulbs but experience minimum lumen depreciation over time. Though light bulbs are liable to fail on average after one year, LEDs can be operated for more than 50,000 hours (depending on the type of application). The increased lifetime ensures high reliability.
- LEDs can emit light in an efficient way that produces much less heat than other lighting fixtures. In most of the indoor farming, heat is considered waste and is removed by an air conditioner or fan, but LEDs can reduce the energy consumption associated with the removal of excess heat by not producing it in the first place.
- UVC LED suppliers used to rely on increased efficiency and competitive prices to receive branding contrast. However, affected by the coronavirus epidemic, UVC LED with disinfecting function is becoming a standard component for home appliance, making its way to the mainstream market.
- IR LEDs with sensing function can be applied for people flow monitoring in public areas, helping individuals to keep social distance when lockdowns lifted. The COVID-19 pandemic has inspired a new application for IR sensing, that is, social distance control. IR sensing technology enables anonymous and accurate track and analyze the flow of people, supporting malls, public building, banks, airports and other venues visited by large amount of people to monitor people flow and maintain safe social distance between individuals.
Europe is Expected to Hold the Largest Share
- Europe accounted for a significant share in the horticulture lighting market and continues to grow with other European countries promoting plant factory and providing subsidies to spur the local demands. The European Union's initiatives to encourage the adoption of LED technology are expected to create more opportunities for the providers of LED lights for the horticulture sector.
- Increasing awareness of benefits and rising demand for food owing to the rising population is expected to drive the adoption of vertical farms in the region. Researchers in the Netherlands are calculating the viability of vertical farming in urban areas. For instance, Staay Food Group built a vertical farm in the country that is using Philips GreenPower LED horticultural lighting.
- LED lighting providers in the region are also developing full range horticultural products and are broadening collaboration with different partners. For instance, in 2019, Osram Opto Semiconductors GmbH launched the Duris S5 purple, which combines key wavelengths of red and blue into a single purple LED that can make horticulture applications more cost-effective.
- With strawberries ranking among the most sought-after seasonal fruits in Europe, Hungarian lighting technology group Tungsram has set out to further fortify its expertise in commercial strawberry growing. The Budapest-based company has teamed up with the University of Reading, one of the most prestigious higher education institutions in the field of horticulture in the UK, to gauge the benefits of using LED lighting for strawberry cultivation.
- Signify is expanding its collaboration with Planet Farms, a European operator of vertical farms based in Italy. Thanks to the latest agreement, Europe’s largest vertical farm will boost the quality and yield of the crops using the Philips GreenPower LED production module managed by the Philips GrowWise Control System.
The Horticulture Lighting market is competitive, and many companies have entered the market to share the expanding opportunities when the demands in the general lighting are relatively weak. Companies are increasing their market presence by introducing new products, entering into partnerships, or by entering into strategic acquisitions.
- July 2020 - The European Commission has approved the acquisition of Osram by Austrian optical sensor maker AMS, ruling that the combination of the two companies poses no competitive threat in the European Economic Area.
- September 2020 - Fluence Bioengineering, an Osram business unit referred to as Fluence by Osram, has announced a new solid-state lighting (SSL) distribution partnership with Israel-base Remy 108 Ltd, primarily focused on the burgeoning legalized cannabis market in Israel.
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1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Overview
4.2 Assessment of Impact of COVID-19 on the Market
4.3 Market Drivers
4.3.1 Growing Population and Availability of Limited Agricultural Land
4.3.2 Government Initiatives to Support Adoption of LEDs in Horticulture
4.4 Market Restraints
4.4.1 High Cost of LED Grow Light Technologies
4.5 Value Chain Analysis
4.6 Porters Five Force Analysis
4.6.1 Threat of New Entrants
4.6.2 Bargaining Power of Buyers/Consumers
4.6.3 Bargaining Power of Suppliers
4.6.4 Threat of Substitute Products
4.6.5 Intensity of Competitive Rivalry
4.7 Stakeholder Analysis
4.7.1 Opportunities in LED Drivers
4.7.2 Opportunities in LED Fixtures
5 MARKET SEGMENTATION
5.1 Lighting Type
5.2 Lighting Technology
5.2.2 HID (MH (Metal Halide) and HPS (High Pressure Sodium) Light)
5.2.3 Other Lighting Technologies
5.3 Application Type (Qualitative)
5.3.1 Vegetables and Fruits
5.3.3 City Farming
5.4.1 North America
5.4.3 Asia Pacific
5.4.4 Rest of the World
6 COMPETITIVE LANDSCAPE
6.1 Company Profiles
6.1.1 Royal Philips Electronics BV
6.1.2 Heliospectra AB
6.1.3 OSRAM GmbH
6.1.4 Illumitex Inc.
6.1.5 LumiGrow Inc.
6.1.6 Everlight Electronics Co. Ltd
6.1.7 Gavita International BV
6.1.8 Epistar Corp.
6.1.9 Grow LED Hydro
6.1.10 LEDiL Oy
6.1.11 Samsung Electronics Co. Ltd
6.1.12 Hubbell Inc.
6.1.13 Cree Inc.
6.1.14 Signify Holding (Koninklijke Philips NV)
6.1.15 Lumileds Holding BV
7 INVESTMENT ANALYSIS
8 FUTURE OF THE MARKET
Secondary Research Information is collected from a number of publicly available as well as paid databases. Public sources involve publications by different associations and governments, annual reports and statements of companies, white papers and research publications by recognized industry experts and renowned academia etc. Paid data sources include third party authentic industry databases.
Once data collection is done through secondary research, primary interviews are conducted with different stakeholders across the value chain like manufacturers, distributors, ingredient/input suppliers, end customers and other key opinion leaders of the industry. Primary research is used both to validate the data points obtained from secondary research and to fill in the data gaps after secondary research.
The market engineering phase involves analyzing the data collected, market breakdown and forecasting. Macroeconomic indicators and bottom-up and top-down approaches are used to arrive at a complete set of data points that give way to valuable qualitative and quantitative insights. Each data point is verified by the process of data triangulation to validate the numbers and arrive at close estimates.
The market engineered data is verified and validated by a number of experts, both in-house and external.
REPORT WRITING/ PRESENTATION
After the data is curated by the mentioned highly sophisticated process, the analysts begin to write the report. Garnering insights from data and forecasts, insights are drawn to visualize the entire ecosystem in a single report.