No.2002
10/25/2018

Artificial-Light-Only Plant Factories Market in Japan: Key Research Findings 2018

Yano Research Institute (the President, Takashi Mizukoshi) has conducted a survey on the domestic market of plant factories using only artificial lights and has found out the current status, the trends of market players, and future outlook.


Figure 1. Transition of Size of Domestic Plant Factory Operation Market Using Only Artificial Lights
Figure 1. Transition of Size of Domestic Plant Factory Operation Market Using Only Artificial Lights
Figure 2. Transition of Artificial-Lights-Only Plant Factories Construction Market Size (Accumulated Values)
Figure 2. Transition of Artificial-Lights-Only Plant Factories Construction Market Size (Accumulated Values)

Market Overview

Currently, those plants grown at domestic plant factories using only artificial lights are Batavia lettuce with its massiveness and ice plants needing relatively low amount of light (radiation). The market size of artificial-light-only plant factory operation in FY2017, based on the shipment value at factory vegetable growers, rose to 111.0% of that of the previous fiscal year to attain 5,434 million yen. The market for FY2018 is projected to rise to 109.8% of the preceding fiscal year to achieve 5,969 million yen.

Abnormal weathers in recent years have caused the market price of vegetables grown outdoors to fluctuate. This has triggered wider variety of vegetables to be grown at plant factories. Especially, the demands at supermarkets, convenience stores, and those for business use at restaurants/diners and for ready-made dishes at delicatessens have been expanding.

At supermarkets, those vegetables grown at plant factories are praised for their stable availability and relatively long-lasting quality due to few unwanted bacteria.  Their attempts of in-store food sampling for visitors and in-store cooking for families resulted in invigoration of sales floors and differentiation from other stores, which led to sales promotions. Also, those vegetables have been praised for the uniformity in shape, the good appearance, and the work efficiency brought about by abbreviating washing process at convenience stores, restaurants/diners, and delicatessens, expanding the use of such vegetables for pre-chopped vegetables and summer rolls at delicatessens, as salads and accompanied veggies in meat plates of restaurants and diners, and for sandwiches sold at convenience stores.

Noteworthy Topics

Plant factory business using only artificial lights had once attracted many agricultural ventures to enter the market, after which a series of such companies withdrew from the market without being able to build a profitable business model. However, because LEDs, i.e., save-energy essentials, have become lower in cost, running cost of the business has been reduced to improve the profitability. In addition, production technologies have also become less costly due to AI and high-functional sensors to measure the status of growing plants having become implementable.  These factors have led plant factories to draw renewed attention because of their ability of planned and around-the-year production.

Until FY2016, those plant factories that have gained ground were those middle-size factories with their daily production capacity about 5,000 or less of Batavia lettuce or those small factories with even smaller amount around 1,000 or less.  Since around FY2017, the production facilities have become larger to produce more than 20,000 of amount of lettuce per factory a day.  This has boosted the plant factory construction market size consisting of buildings and indoor facilities.

The market size of construction of artificial-lights-only plant factories (based on accumulated values) is likely to achieve 48,758 million yen, 127.2% of that of the preceding fiscal year, and to attain 60,736 million yen, 124.6% of that of FY2017.  Due to improvement of such production technologies and expansion of demands for veggies made at factories, the market is likely to reach 173,458 million yen by FY2022.

Research Outline

1.Research Period: June to September, 2018
2.Research Object: Enterprises and research institutions in the plant factory business using only artificial lights
3.Research Methogology: Face-to-face interviews by the specialized researchers, surveys via telephone/email, and literature research

What are Artificial-Light-Only Plant Factories?

The plant factories using only artificial lights are the sealed indoor facilities for growing plants using only artificial lights for light sources and using air conditioning and solution culture.  In such plant factories, plants are grown by controlling the environmental factors needed, such as lights, temperature, humidity, CO2 concentration, and etc. This research does not include those plant factories that use both sunlight and artificial lights, and those that do not use any artificial lights.

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