Japan Commercial Greenhouse Market - Forecasts from 2023 to 2028

Japan commercial greenhouse market is projected to witness a compound annual growth rate of 8.93% to grow to US$2.298 billion by 2028, from US$1.262 billion in 2021.

The Japanese commercial greenhouse market is anticipated to rise at a steady pace during the projected period. Japan has a high population density while having little agricultural area. For instance, as per the World Bank statistics, only 12% of Japan's land was dedicated to agriculture in 2020, and in the coming year, this number is expected to decrease further. The country needs a solution to produce more food with less agricultural land, and hence, the penetration of Commercial greenhouses is expected to grow in the coming years. The Japan Commercial Greenhouse Market is growing because of commercial greenhouses' capacity to generate greater yield than conventional farming methods and a decline in arable area per person.

Climate concerns and better efficiency are the driving factors.

Commercial greenhouses make it possible to grow fruits and vegetables in carefully regulated environments, ensuring a year-round supply of high-quality goods and assisting in the fight against climate change, water scarcity, and shortages of available land. Additionally, commercial greenhouses give an option of cultivating crops irrespective of the season. As the G-20 Climate Atlas, Japan faces multiple threats due to climate change. Sectors such as agriculture, infrastructure, tourism, and others might get affected massively due to this. The G-20 report also estimated that Japan might lose 3.72% of its GDP by 2050. In these situations, cultivating plants gets difficult, and hence commercial greenhouse would be the best option to adopt. Additionally, the revenue per square foot increases two to three times owing to commercial greenhouses. These drivers will upsurge the Japanese commercial greenhouse market.

Increasing agriculture products imports

As per the USDA, Japan imported US$ 64.54 billion worth of agriculture products in 2021, among which US$ 14.2 billion was imported from the US. The country is investing a large sum of its GDP in importing agricultural products, which has given rise to commercial greenhouse production. The increased crop production by the commercial greenhouse will help the country to reduce the import values of agricultural products. The fact that the amount of arable land is decreasing annually in Japan is one of the primary causes behind the expansion of greenhouse farming. For instance, as per the world bank, the arable land in Japan was only 11.3% in 2020 in Japan. Therefore, the market for commercial greenhouse farming is being driven by the need to maximize crop output on the land that is currently available to fulfill the rising food demand.

Advantages of free-standing greenhouses

Free-standing greenhouses exhibit significant advantages in the context of agricultural production. Their versatility enables farmers to cultivate a diverse range of crops, providing flexibility to adapt to market demands and mitigate risks associated with monoculture. Moreover, the cost-effectiveness of free-standing greenhouses makes them economically accessible to farmers and agricultural businesses, facilitating broader participation and potentially contributing to increased agricultural productivity. Additionally, their scalability enables expansion by incorporating additional units, allowing companies to grow their operations in response to market dynamics and evolving demands. Further, they can integrate environmentally friendly approaches by adopting energy-efficient systems, water recycling techniques, and reduced reliance on pesticides. This alignment with the escalating call for sustainable agricultural practices underscores their potential as eco-conscious solutions in the industry. Thus, this advantage is further expected to drive the Japanese commercial greenhouses market.

The surge in health awareness and convenience trends

The Japanese commercial greenhouses market has been experiencing a surge in health awareness and convenience trends, which is expected to show significant growth in the coming years. The rise in health awareness and convenience trends in Japan has increased the demand for fruits and vegetables, driving their production scale. For instance, according to Japan's Ministry of Agriculture, Forestry, and Fisheries (MAFF), Japan's cherry production for the marketing year 2022-2023 witnessed an 18% increase in output compared to the previous years. Also, as per the same source, the commercial production of fresh cherries was recorded at 14,000 metric tons in Japan in April 2022, representing an 18.6% increase over 11,800 metric tons recorded in April 2021.

Moreover, as per the consumer survey conducted by the Ministry of Agriculture, Forestry, and Fisheries, in May 2023 involving 18 food industry retailers and 2,000 consumers, 87.5% of the respondents reported a significant increase in the consumer's demand for fruits and vegetables in Japan post the COVID-19.

Market Developments:

• In 2022, the Former Sony Corporation semiconductor factory converted into the world's largest indoor farm in Japan's Miyagi Prefecture, which showcases the potential growth factors of the free-standing segment in the country's commercial greenhouse market.
• Aquatech Co., Ltd., in March 2023, in cooperation with Aichi Kaifu Agricultural Cooperative Association and Nagoya Nishi Seika Co., Ltd., launched Akuponi Co., Ltd., which will operate on a hydroponic system. The new plant is producing 20,000 plants at present but is expected to increase its production in the coming years. The plant is expected to produce leafy vegetables such as lettuce and Italian parsley, along with tilapia (tilapia) and some local specialties.

Market Segmentation:

By Type

• Free Standing
• Gutter Connected

By Component

• High-Tech Commercial Greenhouse
• Heating System
• Heaters
• Valves
• Vents
• Others
• Cooling System
• Fans
• Cooling Pad Systems
• Medium-Tech Commercial Greenhouse
• Heaters
• Cooling Pads
• Thermostats
• Exhaust Fans
• Others
• Low-Tech Greenhouse

By Application

• Fruits and Vegetables
• Flowers and Ornamentals
• Nursery Crops