U.S. greenhouse produce market to flourish

U.S. greenhouse produce market to flourish

Rabobank's Food & Agribusiness Research and Advisory says sales in this market will reach $4 billion in 2020.

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August 27, 2013

The U.S. greenhouse produce industry has been steadily growing over the past decade. This growth, driven in part by the need for more intensive production due to limited land, water and labor, has pushed sales to more than $3 billion and is estimated to reach more than $4 billion by 2020. This is according to Rabobank's Food & Agribusiness Research and Advisory (FAR) group. The report titled "The Growing U.S. Greenhouse Produce Niche -- Capitalizing on High Tech Quality and Consistency", goes on to point out that 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 -- 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," said Barber. "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 noting 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 as well. Success in the niche is expected to continue to favor the most efficient, reliable and experienced producers with advantages in marketing, geography and technology.

Photo courtesy of University of Vermont