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Published August 19, 2013, 11:21 AM

US greenhouse produce market to grow

The market for greenhouse-grown produce is expected to reach $4 billion by 2020.

By: Marketwired,

FRESNO, Calif. — Though still in its early stages, the U.S. greenhouse industry has been steadily growing in the past decade.

This growth, driven in part by the need for more intensive production because of limited land, water and labor, has pushed sales to more than $3 billion and is estimated to reach $4 billion by 2020. This is according to Rabobank’s Food & Agribusiness Research and Advisory group.

The report, “The Growing U.S. Greenhouse Produce Niche — Capitalizing on High Tech Quality and Consistency,” says reducing the cost of high-tech greenhouse installations and differentiating from lower cost Mexican shadehouse and low-tech greenhouse competition will be the key to future growth.

The report, authored by Karen Halliburton Barber, senior analyst in produce at FAR, addresses a variety of opportunities for the industry as it grows. “There is a growing preference among U.S. retail and foodservice buyers for greenhouse produce,” Barber says. “These buyers are seeking the quality and reliability of supply that greenhouse products provide.”

Although greenhouse produce is estimated to only represent 1 to 2 percent of overall U.S. fresh fruit and vegetable production, there are important trends to keep an eye on. Greenhouse tomatoes today account for as much as 70 percent of sales. This concentration in business is an indication that the key challenges noted in the report, costs and competition, are not insurmountable.

The report concludes that growth in greenhouse production is likely to continue in the near term. A core challenge to that growth will be educating the consumer while differentiating high-tech greenhouse products from lower-tech products. Stricter labeling laws, as well as greater awareness of certification programs already in place in the U.S. and Canada, can aid in this education. Success in the niche is expected to continue to favor the most efficient, reliable and experienced producers with advantages in marketing, geography and technology.