Israel Hydroponics Market By Type (Aggregate Systems and Liquid Systems), By Equipment (HVAC, LED Grow Light, Control Systems, Irrigation Systems, Others), By Input (Nutrient and Growth Media), By Farming Method (Indoor and Outdoor), By Crop Type (Fruits & Vegetables, Flowers & Turfs, Others), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

Israel Hydroponics Market was valued at USD 102.23 Million in 2024 and is expected to reach USD 149.86 Million by 2030 with a CAGR of 6.54% during the forecast period. The Israel hydroponics market is driven by advancements in agricultural technology, water scarcity concerns, and government support for sustainable farming. With limited arable land and a growing population, Israel has turned to hydroponics to maximize crop yields while conserving water. Innovations in controlled-environment agriculture, nutrient-rich solutions, and vertical farming are fueling market growth. Additionally, rising demand for pesticide-free and high-quality produce is encouraging investment in hydroponic systems. The presence of agritech startups and research institutions further accelerates technological developments. Government incentives and policies promoting efficient water use and food security also play a crucial role. As climate change intensifies, hydroponics offers a resilient solution for year-round farming, positioning Israel as a leader in modern agricultural practices.

Key Market Drivers

Water Scarcity and Efficient Utilization

Israel faces severe water scarcity due to its arid climate and limited freshwater resources. With over 60% of its land classified as desert, traditional farming methods that require significant water inputs are not sustainable. Hydroponics, which uses up to 90% less water than soil-based farming, provides an efficient solution. The recirculating systems in hydroponics minimize water wastage, making it an attractive option in a country where water conservation is a priority. The Israeli government has implemented policies and subsidies to support water-efficient agricultural technologies, further propelling the adoption of hydroponics. Additionally, the use of desalinated water and advanced filtration systems ensures that hydroponic farms can operate efficiently even in water-limited environments. As climate change intensifies drought conditions, the need for hydroponic farming will continue to grow, reinforcing its role in Israel’s agricultural landscape.

Government Support and Policies

The Israeli government plays a crucial role in promoting hydroponics through various incentives, research programs, and funding initiatives. Policies supporting controlled-environment agriculture, precision farming, and water-efficient techniques have encouraged farmers and agribusinesses to invest in hydroponics. The government collaborates with universities, research institutes, and startups to develop cutting-edge hydroponic solutions, making Israel a global leader in this sector. Additionally, subsidies and low-interest loans for hydroponic projects have made it financially feasible for small and large-scale farmers to adopt this technology. Regulatory frameworks supporting organic and pesticide-free farming have also boosted hydroponic cultivation, as these systems reduce the need for chemical inputs. Israel’s commitment to food security and sustainability ensures continued governmental support for hydroponics, driving market growth.

Export Opportunities and Global Market Demand

Israel is a major exporter of agricultural products, and hydroponics enhances its ability to supply high-quality produce to international markets. European countries, in particular, demand pesticide-free and sustainably grown vegetables, which hydroponic farms can provide. In February 2022, Ahmedabad-based agritech startup Brio Hydroponics has formed a joint venture with Israeli company Pic-Plast Limited to introduce a rain protection technique, enabling year-round hydroponic cultivation.

The consistent quality, extended shelf life, and eco-friendly nature of hydroponic crops make them attractive for export. Additionally, Israeli companies are exporting hydroponic technology, including irrigation systems, nutrient solutions, and climate-controlled greenhouse designs. The combination of high-tech farming expertise and strong trade relations ensures that Israel remains a key player in the global hydroponics market.

Climate Change and Food Security Concerns

Extreme weather patterns, unpredictable rainfall, and increasing temperatures have made traditional farming more challenging. Hydroponics offers a resilient agricultural method that is not affected by external climate conditions. With controlled-environment systems, farmers can ensure consistent production regardless of weather fluctuations. Israel’s focus on food security has accelerated the shift towards hydroponics, as it guarantees stable crop yields even in extreme conditions. Government and private sector initiatives are working together to expand hydroponic farming as a long-term solution for climate-adaptive agriculture.

Strong Research and Development Ecosystem

Israel’s robust research and development ecosystem is a key driver of hydroponic market growth. Universities, agricultural research centers, and private companies are continuously innovating hydroponic techniques to improve efficiency and sustainability. In December 2022, the Government of Guyana, through the Ministry of Agriculture, signed a Memorandum of Understanding (MoU) with Israeli company KARLICO INC., paving the way for the development of a large-scale hydroponic production system in Guyana.

Institutions such as the Volcani Center and the Hebrew University of Jerusalem conduct extensive studies on hydroponic crop optimization. Collaborations between agritech startups and global investors have resulted in breakthroughs in hydroponic automation, nutrient delivery, and crop genetics. This strong R&D culture ensures that Israel remains at the forefront of hydroponic advancements, driving both local adoption and international market expansion.

Limited Arable Land and Urban Farming Trends

With a significant portion of its land being desert, Israel has limited arable land for traditional farming. Hydroponics enables high-yield crop production in non-traditional spaces, including rooftops, warehouses, and urban environments. The rise of urban farming has led to the development of vertical farming and hydroponic greenhouses, allowing fresh produce to be grown close to consumers. Cities like Tel Aviv are witnessing a surge in hydroponic setups, reducing transportation costs and ensuring farm-to-table freshness. The ability to cultivate crops in controlled environments without soil makes hydroponics a viable solution for maximizing agricultural output despite land constraints.

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Key Market Challenges

High Initial Investment and Operational Costs

Hydroponic farming requires significant capital investment for setting up infrastructure, including climate-controlled greenhouses, LED lighting, nutrient delivery systems, and automated monitoring technologies. The cost of these advanced systems can be a barrier for small and medium-sized farmers who lack access to sufficient funding. Additionally, ongoing operational costs—such as energy consumption for lighting and climate control—can be high, especially in large-scale hydroponic farms. Although government subsidies and private investments help offset some of these expenses, financial constraints remain a major challenge to widespread adoption. Farmers must carefully balance the cost of technology with expected returns, making it difficult for some to transition from traditional farming methods.

Technical Complexity and Knowledge Gaps

Hydroponic farming requires a deep understanding of plant nutrition, water chemistry, climate control, and system maintenance. Unlike traditional soil farming, where plants draw nutrients naturally, hydroponics demands precise nutrient management, pH balancing, and monitoring of environmental conditions. Many farmers lack the necessary expertise to operate hydroponic systems efficiently, leading to suboptimal yields or system failures. While Israel has strong research institutions and training programs, the knowledge gap still poses a challenge, particularly for new entrants. Without proper training, mistakes in nutrient formulation, oxygenation, or pest control can lead to crop loss, discouraging farmers from adopting hydroponic methods.

Dependence on Technology and Energy Supply

Hydroponic farms rely heavily on technology, including automated irrigation systems, sensors, and climate control mechanisms. Any disruption in these technologies—due to power failures, system malfunctions, or software issues—can have immediate consequences on crop health. Additionally, hydroponic farms require a consistent electricity supply to maintain optimal growing conditions, making them vulnerable to energy shortages or rising electricity costs. In a country like Israel, where energy prices fluctuate, maintaining profitability while covering high energy expenses can be a challenge. Farmers need backup power sources, efficient energy management strategies, and alternative solutions such as solar-powered systems to mitigate these risks.

Key Market Trends

Technological Advancements in Agritech

Israel is known for its strong agritech sector, which has significantly contributed to the growth of hydroponics. Advanced automation, AI-driven monitoring systems, and IoT-enabled nutrient management have transformed hydroponic farming into a highly efficient, data-driven industry. In April 2022, Agritech startup Brio Hydroponics, in collaboration with Israeli firm PIC-Plast Limited, has launched India's first 3-layer retractable, patented Rain Protection Technology Nethouse to tackle the climatic challenges faced by the Indian farming sector.

Technologies like precision irrigation, climate control, and LED grow lights optimize plant growth, increasing yields while reducing resource consumption. Israeli startups and research institutions are continuously developing innovations such as AI-based crop monitoring, vertical farming solutions, and bioengineered nutrients. The integration of robotics in harvesting and automated nutrient delivery further enhances operational efficiency. These advancements not only make hydroponics more profitable but also ensure that Israel remains a global leader in smart agriculture.

Rising Demand for Pesticide-Free and Organic Produce

Consumer awareness regarding health and food safety has increased demand for pesticide-free and organic produce. Hydroponic farming eliminates the need for soil, reducing the risk of soil-borne diseases and pests, which in turn minimizes pesticide use. In December 2024, Israel’s Industry & Economy Minister, during a visit to India, explored collaborations in startups, with a focus on space and quantum technology. Discussions also covered joint innovation initiatives in the agriculture and health sectors, strengthening bilateral cooperation.

Controlled-environment farming also allows for year-round production of high-quality vegetables, ensuring a stable supply of fresh produce. Israeli consumers, as well as international markets, prefer hydroponically grown crops due to their superior taste, texture, and nutritional value. Supermarkets and restaurants are increasingly sourcing hydroponic produce to meet consumer demand for sustainable and chemical-free food. This shift in consumer preference is driving the expansion of hydroponic farms across Israel.

Segmental Insights

Equipment Insights

Based on the Equipment, irrigation systems dominated the Israel hydroponics market. Given Israel’s harsh climate, limited water resources, and advanced expertise in precision agriculture, efficient irrigation technologies have become the backbone of hydroponic farming in the country. With a strong emphasis on water conservation and controlled nutrient delivery, irrigation systems play the most critical role in optimizing plant growth, reducing resource waste, and ensuring sustainable food production. The integration of smart irrigation technologies, automation, and data-driven monitoring has further solidified irrigation systems as the dominant hydroponic component in Israel.

Israel has long been a global leader in irrigation technology, particularly in drip irrigation and precision watering systems. The country’s innovations in micro-irrigation, nutrient management, and water recycling have positioned it as a pioneer in water-efficient farming techniques. Hydroponic systems heavily rely on precise irrigation methods to deliver water and nutrients directly to plant roots, eliminating wastage and improving crop productivity. Israeli companies like Netafim, a world leader in drip irrigation, have played a key role in developing hydroponic irrigation solutions that optimize water use while maximizing yields. These advancements have led to widespread adoption of irrigation technologies, making them the dominant component in the hydroponics sector. With Israel facing severe water scarcity and an arid climate, hydroponic farming must rely on irrigation systems that minimize water consumption. Unlike traditional soil-based agriculture, where water can be lost through evaporation and runoff, hydroponic irrigation systems use recirculating nutrient delivery methods to conserve water. Techniques such as drip irrigation, ebb and flow systems, and nutrient film technique (NFT) ensure that plants receive the exact amount of water needed for optimal growth. By reducing water waste by up to 90% compared to conventional farming, hydroponic irrigation systems align perfectly with Israel’s national water conservation goals, further driving their market dominance.

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Regional Insights

The Negev Desert dominated the Israel hydroponics market. This is primarily due to its arid climate, scarcity of arable land, and the necessity for innovative agricultural solutions to support food production. Covering more than 60% of Israel’s total land area, the Negev Desert presents harsh environmental conditions that make traditional soil-based farming highly challenging. However, Israel has turned this adversity into an opportunity by investing heavily in hydroponic farming, transforming the Negev into a global hub for agricultural innovation and desert farming technologies.

One of the primary reasons for the dominance of hydroponics in the Negev Desert is the acute water scarcity in the region. With minimal rainfall and limited access to freshwater resources, farmers in the Negev have embraced hydroponics as a water-efficient alternative to traditional farming. Hydroponic systems use up to 90% less water than soil-based agriculture by recycling nutrient solutions and minimizing evaporation losses. The Israeli government, in collaboration with research institutions like the Volcani Center and Ben-Gurion University’s Jacob Blaustein Institute for Desert Research, has spearheaded efforts to develop advanced irrigation and hydroponic systems tailored to desert conditions. The introduction of closed-loop hydroponic setups, precision fertigation techniques, and desalinated water usage has further strengthened the Negev’s position as the leader in Israel’s hydroponics sector.

Another factor driving hydroponic dominance in the Negev is the scarcity of fertile soil. Unlike the Mediterranean Coastal Plain, which has more arable land, the Negev’s sandy and rocky terrain makes conventional farming nearly impossible. Hydroponics eliminates the need for soil altogether, allowing crops to be grown in controlled environments using nutrient-rich water solutions. This has led to a significant increase in high-yield hydroponic farms, greenhouses, and vertical farming operations in the region. Advanced greenhouse technologies, including climate-controlled hydroponic facilities, have enabled year-round cultivation of vegetables, herbs, and medicinal plants, further driving the market’s growth.

Recent Developments

• In June 2023, Israeli AgTech startup Growee has secured a new funding round, backed by prominent impact angel investors, the Israeli Innovation Authority, and the Israeli Ministry of Economy. Specializing in advanced technology for small-scale hydroponics growers, the company has already established a strong presence in over 20 countries. With this latest investment, Growee is now focusing on expanding into the North American market, aiming to bring its innovative solutions to a wider audience.
• In October 2023, across cities like Basel, Copenhagen, and Paris, rooftops are transforming into lush green spaces, showcasing a growing trend in urban agriculture. These green roofs, now mandatory for newly built and renovated structures in several European cities, are flourishing with vegetables and other vegetation. Embracing this shift, an Israeli AgTech company has developed hydroponic-based agrivoltaic kits, integrating renewable energy and sustainable farming to maximize urban cultivation potential.
• In March 2023, Israel-based hydroponics company, KARLIGO INC, is moving ahead with its USD 15.7M project as its first shipment of supplies is expected to arrive in Guyana within the next six weeks.
• In August 2024, 188 Green Farm has invested 15 billion VND to establish 12 state-of-the-art greenhouses, incorporating cutting-edge recirculating hydroponic technology from Israel and the Netherlands. This advanced system enables the cultivation of hydroponic vegetables and a variety of fruits, ensuring efficient resource use, higher yields, and sustainable farming practices.

Key Market Players

• GrowPonics Limited
• LivinGreen
• Teshuva Agricultural Projects Ltd.
• TAPKIT Hydroponic Systems Ltd.
• Vertical Field
• PhyTech
• Ariel Global Links
• Yagur Farm

Report Scope:

In this report, the Israel Hydroponics Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

·       Israel Hydroponics Market, By Type:

o   Aggregate Systems

o   Liquid Systems

·       Israel Hydroponics Market, By Equipment:

o   HVAC

o   LED Grow Light

o   Control Systems

o   Irrigation Systems

o   Others

·       Israel Hydroponics Market, By Input:

o   Nutrient

o   Growth Media

·       Israel Hydroponics Market, By Farming Method:

o   Indoor

o   Outdoor

·       Israel Hydroponics Market, By Crop Type:

o   Fruits & Vegetables

o   Flowers & Turfs

o   Others

            ·       Israel Hydroponics Market, By Region:

o   The Mediterranean Coastal Plain

o   The Central Hills

o   The Jordan Rift Valley

o   The Negev Desert

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Israel Hydroponics Market.

Available Customizations:

Israel Hydroponics Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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