Horticulture Lighting Market Size, Share & COVID-19 Impact Analysis, By Type (Top lighting and Interlighting), By Lighting Technology (Fluorescent, High-Pressure Sodium, Metal Halide, LED, and Others) By Application (Indoor Farming, Greenhouse, Vertical Farming, and Others), and Regional Forecasts, 2022-2029

The global horticulture lighting market size was valued at USD 5.41 billion in 2021 and 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 (2022-2029). Europe accounted for a market value of USD 1.89 billion in 2021, with a share of 34.94% in 2021. 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. 

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.

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,

• March 2021– Acuity Brands, Inc. launched Verjure LED horticulture lighting solution that offers higher efficiency for indoor horticulture applications. The developed horticulture lighting Verjure Pro Series LED luminaires were designed to support all stages of plant growth, from vegetables to flowers. This Verjure series is made available in three different outputs and sizes for supporting versatility for various applications such as a greenhouse, indoor warehouse, and vertical racks.

COVID-19 IMPACT

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,  

• In July 2021, Heliospectra AB, an intelligent lighting technology provider for vertical farming, collaborated with MineARC Systems, Inc., manufacturer and supplier-controlled environments. The partnership aimed to provide horticulture LED lighting and its control solutions in the Australian market.

Such rising expansion of the LED lighting manufacturers for horticulture applications is expected to strengthen the market growth.  

LATEST TRENDS

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Increasing Demand for Indoor Farming for a Wide Range of Applications to Aid Horticulture Lighting 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,

• In June 2021, Signify collaborated with Hortipar lighting projects to develop horticultural sectors globally. Hortipar added Philips GreenPower LED grow lights to their portfolio. With this partnership, the company provided high-quality, flexible lighting offerings for horticulture for greenhouse lighting projects.

DRIVING FACTORS

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,

• In February 2022, OSRAM's subsidiary Fluence, a provider of energy-efficient LED solutions, launched its inter-canopy energy-efficient lighting solution named VYNE. This luminaire solution was developed for commercial cannabis and food production with multiple spectral options that enable growers to balance light efficacy and enhance the crop's yield.

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.

RESTRAINING FACTORS

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.

SEGMENTATION

By Type Analysis

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.

By Lighting Technology Analysis

LED Segment to Hold Highest CAGR Owing to Rising Horticulture Productivity 

Based on lighting technology, the horticulture lighting 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.

By Application Analysis

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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.

REGIONAL INSIGHTS

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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 INDUSTRY PLAYERS

Key Players in the Market are Inventing Advanced Horticulture Lighting

The global horticulture lighting 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,

• In June 2021, Signify collaborated with Hortipar to make lighting projects for horticultural products worldwide. Hortipar added Philips GreenPower LED grow lights to its global portfolio. With this partnership, the Hortipar lighting project offered Signify offered its customers a complete horticulture lighting solution for their greenhouse.


• In June 2021, Osram Licht AG launched an advanced horticulture lighting portfolio named Osconiq S 5050. This product addresses the key problems of regular white LEDs, resulting in lower energy costs and efficient lighting for indoor farmers.


• In August 2020, Signify collaborated with Yunnan AiBiDa Greenhouse Technology Co., Ltd. to provide lighting solutions to China's greenhouse floriculture company. Through this partnership, the company aimed to expand Philips's horticulture network in China to serve Chinese floriculture businesses.

List of Key Companies Profiled:

• Bridgelux Inc. (U.S.)


• LumiGrow Inc. (U.S.)


• EYE Hortilux (U.S.)


• Maxigrow Ltd (U.K.)


• Signify Holding (Philips Lighting) (Netherlands)


• GE Lighting (U.S.)


• Hortilux Schreder (Netherlands)


• Osram Licht AG (Germany)


• Gavita International BV (Netherlands)


• Lumileds (U.S.)


• Hubbell Lighting (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• February 2022- California Lightworks, Inc. introduced the latest MegaDrive Vertical series for indoor cannabis cultivators. This patented LED system offers indoor cultivators and greenhouses a return on investment and reduces heat, energy consumption, and carbon footprint.


• December 2021- Signify entered a definitive agreement to acquire ams OSRAM Texas-based Fluence for USD 272 million. This acquisition has strengthened the global agricultural lighting's growth platform and extended its position in North America's horticultural lighting market.


• December 2021- Hortilux partnered with LLC DTK, Russia based firm, to provide them with Hortilux's HPS NXT2 fixtures to meet the lighting requirements for horticulture. The company can install NXT2 1000W fixtures and horticulture lighting for farmers with this partnership.


• July 2021- Heliospectra AB, an intelligent lighting technology provider for vertical farming, collaborated with MineARC Systems, a manufacturer and supplier of controlled environments solutions. With this, the company expanded its controlled lighting and LED lighting solutions in the Australian market.


• March 2020- Signify lighting solutions provider collaborated with Planet Farms Italy-based vertical farm operator in Europe. With this collaboration, the company is expected to provide Philips Greenpower LED modules with Planet Farms to provide horticulture LED lights to its additional five vertical farms. The company has planned to build and expand its operations in countries such as the U.K., Switzerland, and other European regions.

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The horticulture lighting market 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.

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