Potential Market of Smart Indoor Garden in North America

December 5, 2020

Urbanization

Urbanization is a certain trend in the world. UN expected that over 68 per cent of the world’s population will live in urban in 2050 (UN, 2018). In 2016, 23 per cent of the world’s population, over 1.7 billion people lived in the cities where have over 1 million inhabitants (UN, 2016), and this number will be 2.5 billion in 2050 (UN, 2018).

In Canada, over 80 percent of Canadian are living in urban (H. Plecher, 2020). In there, over 27 million Canadians are living in metropolitan areas, and their average age is around 40.5 years (Statistics Canada, 2020).

Urban planners and agricultural leaders have argued that, to respond to demand by increasing population and to avoid harmful pollution, and unaffordable food prices, busy cities need to produce food internally  (Kheir Al-Kodmany, 2018), and vertical farming is one of the solutions.

 

Number of apartments, condos in the U.S. and Canada

In 2001, approximately 5.3 million U.S. households lived in condominiums (U.S. Department of Housing and Urban Development, 2003). In 2019, the U.S. had about 22 million occupied apartments (NMHC, 2020). 

In 2016, condominiums were home to 1.9 million Canadian households (Pete Evans, 2017). In 2019, there are 25,500 new apartments enter the market in over 2.1 million apartment units across Canada (Steve McLean, 2020). 

Expenditures for vegetables in the U.S. and Canada

In the U.S., the Dietary Guidelines for Americans have recommended that every person consume 2.5 cups of vegetables and 2 cups of fruit daily for a 2,000-calorie reference diet. Still, most Americans eat less than the recommendation (Hayden, S., & Noel, B., 2008). A diet high in vegetables is recommended widely by health professionals. Across all 100 cities in the U.S., an average of 18.0 percent of adults reported eating three or more servings of vegetables per day (Gretchen S. Patch et al., 2018). And this number will increase more in the future.

Top 10 Cities in the U.S. with highest percentage of residents consuming 3+ servings of vegetables per day (Tom Karst, 2018):

         1.     San Francisco (27.5%);

         2.     Portland, Ore. (23.7%); 

         3.     St. Petersburg, Fla. (23.3%);

         4.     Washington, D.C. (23%);

         5.     Anchorage, Alaska (23%);

         6.     San Jose, Calif. (22.4%);

         7.     San Antonio, (22.1%);

         8.     Nashville (22%);

         9.     Austin, Texas (21.0%);

         10.   Reno, Nev. (21.5%).


United States Department of Agriculture (USDA) has found a significant relationship between income and expenditure for vegetables; wealthy households have spent more on vegetables and fruit (
Annemarie, K. & Michelle, S., 2017). This reflects that high-income households will concern more to healthy food. In 2019, every U.S. household spent about 876 U.S. dollars on fruits and vegetables, and fresh vegetables occupied 33.72 percent of that number (Shahbandeh M., 2020). However, in 2016 – 2017, the household earning more than $200,000 per year has paid nearly $500 for fresh vegetables (Tom Karst, 2018).

On average, every Canadian household has spent over CA $700 (≈ US $526) per year for vegetables and vegetable preparations (Statistics Canada, 2020). 

Benefit of vegetables

A healthy diet with more vegetables and fruits is likely to reduce some chronic diseases. Moreover, vegetables also provide nutrients vital for your body’s health and maintenance (ChooseMyPlate – USDA, 2020).

Leafy green vegetables are low in calories but packed with vitamins, minerals, and fiber; therefore, it is an important part of a healthy diet. The Health Benefits of eating a diet rich in leafy greens vegetables can reduce the risk of obesity, high blood pressure, heart disease, and mental decline (Autumn Enloe, 2018). Green leafy vegetables and apples, pears are kinds of non-starchy vegetables and fruits that may even promote weight loss (The Harvard T.H. Chan – School of Public Health, 2020). The hunger will decrease because their low glycemic loads prevent blood sugar spikes.

Especially, microgreens contain higher nutrient levels than mature greens. Eating microgreens is linked to a lower risk of many diseases, such as heart disease, Alzheimer’s disease, diabetes, certain cancers (Alina Petre, 2018). 

 

PESTEL analysis

+ Political

As part of the Healthy Menu Choices Act, Toronto’s food services now post the number of calories on the menu for food and drinks (Ontario, 2016). This could affect the purchases of foods in Canada (Kiesha Frue, 2017). However, this will positively impact vegetable consumption because vegetables are one of the healthy choices of people.

+ Economic

Canada has attractive policies to develop innovative technology companies. So, developing a Smart appliance (Smart Indoor Garden) to supply fresh vegetables for households in the busy cities will meet the policies and contribute to Canada’s innovation. The vertical farming solution can play a critical role in the sustainability of food in urban areas (Kheir Al-Kodmany, 2018).

+ Social

Heath diet is a certain trend nowadays. “Canadians are demanding better, safer, healthier food” (GoodLeaf Farms, 2019). So, demand for vegetables and fruits in the busiest cities will increase sharply in the near future.

+ Technological

Internet of Things (IoT), Affiliate Intelligence (A.I.), hydroponics development will be an opportunity to produce smart appliances for households at a lower price.

+ Environmental

Smart Indoor Garden is a kind of vertical farm. This contributes to significantly increase food production while reducing the environmental footprint by reducing land, water, chemical, and fertilizer use (Krista Stark, 2019).

+ Legal

Standard of safe vegetables; Seeds Regulations.


SWOT analysis

+ Strengths

  • High-end technologies
  • Auto-grow
  • High know-how embedded in
  • High level of food safety
  • High quality
  • High efficiency
  • Less water usage
  • Shorter growing time
  • Year-round crop production
  • No weather-related crop failure 

+ Weaknesses

  • The high price of Smart Indoor Garden
  • Continuous power supply 

+ Opportunities

  • Government’s Support for technology innovation
  • Niche market
  • Health diet lifestyle trends
  • IoT, AI, hydroponics, Led grow light
  • Laws in favor of the vertical farm
  • Environmental footprint
  • Energy efficient 

+ Threats

  • Competition from greenhouses, vertical farm
  • Selling difficulties
  • Arguments against hydroponics
  • If a disease appears, all vegetables in the device will be affected
  • Without soil, so if the system fails, vegetable death will occur rapidly

Market Opportunity of Smart Indoor Garden

  • Customer problems:

1. Do not have time and space for the garden

Most homeowners love gardens; however, homeowners of apartments and condos in the cities do not have space for gardens. Moreover, most of them are young, love technology; but are busy officers, so they do not have time for the garden.

2. Unhealthy/unsafe foods

A lot of research has proved the cancer risks from processed foods and other bad effects of fast foods. Moreover, safe vegetables during pandemic Covid-19 is a significant concern of households. Nowadays, people are more concerned about healthy meals; therefore, fresh and nutrient vegetables or fungi/mushrooms will be in high demand for households.

3. Do not have green space on the desk to de-stress from work; love indoor plants, but it often dies in a period due to lack of water or light

Most apartments, condos, or offices do not have green space. Officers often face stress from works. We know that gardening will help us to destress. So, if the officer has indoor plants or a terrarium on the desk will help them destress when taking only several relaxed minutes to look at and take care of them. We often grow indoor plants or flowers on desks, in-home, but most indoor plants will die after a period because of lack of light or watering was forgotten.

  • Smart Indoor Garden’s solution: 

Smart Indoor Garden will help users to grow enjoyed and nutrient vegetables or fungi (mushroom) in-home automatically with less time, less space, and little to no effort at an efficient cost. Benefit from Smart Indoor Garden will equal the price of the device after less than 2 years.

1. It is a Smart-grow appliance. Homeowners can grow to enjoy vegetables, herbs, or fungi/mushrooms on it without soil and no green-thumb, take less time and less space.

2. It supplies safe and nutrient vegetables or fungi from “farm to table” for households’ healthy meals. Users do not concern about safe food, especially during pandemic happening. Vegetables or fungi can be grown 365 days a year in apartments or condos.

3. It will bring greens and nature to home. The user only waits to enjoy harvested products but does not need to remember when should water or light them. The app will remind us on the smartphone if it needs to be re-filled water and nutrient liquid; all other things are auto. 

Conclusion

Urbanization is happening all over the world. In the cities in the U.S. and Canada, millions of households are living in apartments and condominiums. In 2019, on average, the number of new apartment units per year in Canada and the U.S. were about 25,000 and over 600,000, respectively. Besides that, high-income households will consume more vegetables for healthy. And heath diet is also a social trend nowadays. The Dietary Guidelines for Americans have recommended that every person consume 2.5 cups of vegetables and 2 cups of fruit daily for a 2,000-calorie reference diet; however, most Americans eat less than the recommendation. Therefore, the vegetables demand of households in the big cities will increase sharply soon.

Based on collected data and the above analysis, Canada and the U.S. market will be a potential niche market for developing Smart Indoor Garden – where supply fresh, safe, and nutrient vegetables for households in their apartment or condominium. If one percent of total Canadian & American homeowner of apartments buy Smart Indoor Garden, the demand for Smart Indoor Garden will be over 200,000 units. However, this demand is going to increase sharply in the near future, especially the impact of the pandemic of Covid-19.

 

Further Reading

Nov 6, 2020 / Indoor Farm

Indoor Farming Market

In 2017, the Global Indoor Farming market accounted for $106.6 billion and is expected to reach $171.12 billion by 2026, growing at a CAGR of 5.4 % during the forecast period. North America accounted for the largest market share in 2019. The US is a major contributor to the share in the region, followed by Canada and Mexico.

Nov 6, 2020 / Microgreens

Microgreens’ Nutrient and Health Benefits

Microgreens contain larger amounts of vitamins, minerals and antioxidants than their more mature counterparts. Microgreens deliver a concentrated dose of nutrients and beneficial plant compounds. As a result, they may reduce the risk of certain diseases.

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