1.1 Definition and scope of study

Hydroponics refers to the activity of growing plants "above ground" on a base of "neutral" and "inert" substrate (clay balls, rockwool, etc.). Although in the strict sense of the term, hydroponics refers to a particular form of soilless cultivation, it is often assimilated with all soilless farming techniques. Variants of hydroponics, such as aeroponics, aquaponics and bioponics, have been developing in recent years. The main applications for hydroponics are horticulture and the cultivation of certain types of vegetables and fruit.

Hydroponics offers many advantages in that it provides solutions to the world's water shortages, as well as to the problems of pollution and land erosion. Since it does not require access to land, it also has interesting applications in urban agriculture, as underlined by the rise of vertical urban farms. What's more, hydroponic systems offer higher yields than traditional farming techniques, not least because the right nutrients are delivered directly to the plants' roots. Hydroponics generally does not require the use of artificial ripening agents and pesticides, which can help create nutritionally superior plant products.

Globally, the hydroponics market is fragmented, with many agritech start-ups entering the market, such as AeroFarm (USA) or InFarm (Germany). It is estimated to beworth $12.64 billion in 2023, and is expected to grow at a compound growth rate (CAGR) of 13.7% between 2023 and 2033, reaching a value of $45.66 billion in 2033 [Future Market Insights] . This growth is driven by the world's growing population, which is spearheading demand for agricultural and food products on the market.

In France, some fruit and vegetable growers see this as an opportunity: 90% of tomatoes are said to be produced hydroponically in France today[Franceinfo]. In fact, the trade balance for fruit and vegetables and also horticultural products has always been negative between 2016 and 2021, testifying to France's dependence on them. [France Agrimer]

As the capital cost of hydroponics is high, the crops produced are often sold at higher prices, and until now have tended to targetniche markets. Many hopes are pinned on hydroponics, and some even see it as a technique that could revolutionize tomorrow's agriculture. However, the high cost of hydroponics, particularly energy, is a real brake on the development of certain players. For example, over the past 2 years, many start-ups creating urban farms have gone into receivership, seeing their investors pull out.[Le Monde]

1.2 The global hydroponics market: current situation and main characteristics

Size of the global hydroponics market

The global hydroponics market is estimated to be worth $**.** billion in ****, and will grow at a compound growth rate (***) of **. *% between **** and ****, reaching a value of $**.** billion in ****. [***]

The hydroponics market is being driven by the world's growing population, which is spearheading demand for agricultural ...

1.3 Hydroponics, a possible response to a major global challenge: feeding a growing population while combating global warming

The world's population is set to reach ** billion by ****. Producing more food with limited resources, while trying to reduce greenhouse gas emissions, seems like a difficult equation to solve. Hydroponics may offer a solution to these problems, according to the FAO.

Hydroponics enables more intensive, "soil-less" production, as it takes up ...

1.4 The hydroponics market in France

The hydroponics market represents a sub-segment of the following markets: fruit & vegetables and horticulture. As we do not have the necessary data to estimate the hydroponics market, we briefly analyze the fruit and vegetable and horticulture markets below.

The fruit and vegetable market in France

Iterfel is an organization that brings ...

1.5 Foreign trade in horticultural products, fruit and vegetables

France dependent on fruit and vegetable imports....

The chart below highlights that France imports more fruit and vegetables than it exports, which could leave room for French hydroponic fruit and vegetable growers. Indeed, its trade balance remained negative from **** to ****, rising from -$*.** billion to -$*.** billion .

Trade balance for fruit ...

1.6 2022 : Agricool urban farm placed in receivership

Second blow for French Tech. After Sigfox, Agricool was placed in receivership on January ** by the Bobigny Commercial Court. In June ****, the Agricool urban farm will be sold for **,*** euros. [***]

The Bobigny Commercial Court has approved the takeover bid from Vif Systems. This Lyon-based company designs and installs farms, containers and ...

2.1 Analysis of demand for fruit and vegetables in France

French demand in general

In theFMCG and self-service fresh produce market, the volume of household purchases for home consumption declined in **** (***), though remaining above their pre-**** level. [***]

The table below is taken from FranceAgriMer's report on household purchases of fresh fruit and vegetables:

Source: ****

After a year of record purchases for ...

2.2 Analysis of demand for horticultural products

Trend in French spending on horticultural products

In ****, **% of households purchased at least one outdoor plant (***), down on recent years due to a decline in average quantities purchased and average budget per purchasing household.

Average basket of outdoor plants in volume and value per purchasing household France, ****-****, in units, in ...

2.3 Hydroponics, a solution at the crossroads of several demand trends?

Determinants of demand for fresh fruit and vegetables

With hydroponics players often positioning themselves on fresh fruit and vegetables, the graph below highlights that two purchasing criteria prevail: seasonality (***).

Main criteria when buying fresh fruit and vegetables France, ****, in Source: ****

With regard to"seasonality", hydroponics doesn't normally depend on the seasons ...

2.4 Agricultural market trends in France

Changing profile of farmers

The profile of farmers has changed significantly over the past decade, with an aging population of farmers and a lack of generational renewal.

According to the French Ministry of Agriculture, ***,*** farms have disappeared in the last ten years, a drop of **%, even though the agricultural surface area ...

3.1 Segmentation and dynamics of hydroponics players

Market segmentation and player typology

Three ways of segmenting the hydroponics market (***) are proposed below.

A first way is to distinguish between players who offer solutions for implementing hydroponic production systems, in which case their offer is aimed at producers such as urban farms. GHE is a good example, and also ...

3.2 The production process for hydroponics and its derivatives

General definition

Strictly speaking, hydroponics is the simplest soil-less cultivation technique, and one of the first to have been developed. In a broader sense, it encompasses various techniques (***).

The term " hydroponics" comes from the Greek "hydro" meaning water, and "ponos" meaning work. It is thus an "above-ground" form of agriculture that ...

3.3 The cost structure and the question of profitability

Main cost items

It all depends, of course, on the sophistication of the system installed, as the heterogeneous nature of hydroponic cultivation makes it difficult to carry out a pertinent analysis valid everywhere.

Installation (***).

The energy required to power LED and aeration systems. Here too, prices can vary widely depending on ...

3.4 Urban agriculture: a prime location for hydroponics?

One of the most popular applications for hydroponics is urban agriculture, particularly through the installation of vertical urban farms. Urban agriculture is a solution recommended by the FAO and the UN to meet food security needs. It also responds well to the challenges of urbanization, especially as it can have both ...

3.5 Out of town, hydroponics competes with traditional greenhouses for larger-scale productions

There are also hydroponic farms (***) in the countryside for products such as tomatoes and lettuces. This requires larger-scale production.

In France, for example, **% of tomatoes are grown above ground using hydroponic techniques [***].France produced around *** tonnes of tomatoes in ****, so *** tonnes of tomatoes would be produced hydroponically. France's biggest tomato producer ...

4.1 Main products that can be grown hydroponically

Source: ****

Hydroponics is particularly well suited to growing certain vegetables (***), fruit and horticultural produce.

On the other hand, many products cannot be grown using this "soil-less" logic, as they require soil. This is the case for certain fruits such as apples and pears, as well as most cereals and potatoes. These ...

4.2 Getting started with hydroponics? Steps to follow

Steps to follow before starting hydroponics according to GHE (***)

General Hydroponics Europe offers a method for producing plants yourself using the hydroponics technique. The company also sells and installs customized hydroponic growing systems. It also offers a wide range of fertilizers, supplements and pH regulators for hydroponics. The company is a ...

4.3 Supply trends in urban vertical farms

Trends among urban farms

We can imagine a typology of three types of vertical urban farms, which respond to different trends in demand and operate thanks to different business models.

Low-tech, open-air urban farms, which don't necessarily focus solely on yield, because the problem with growing crops in the city is ...

5.1 Regulatory framework

The traditional regulatory framework for fruit and vegetable trading activities

Decree **.**** of **/**/**** lays down health regulations for fruit and vegetables. They must be: of sound quality, clean, whole and have reached a sufficient degree of development and maturity; Decree n°**-**** of **/**/**** modified by decree n°**-*** of **/**/**** The treatment products ...