I get many requests to help identify the most attractive investment opportunities in horticulture. In reality, they change all the time and thus, the information I am going to share today in this blog will be valid today with assumption of what the future will bring based on research and/or facts. However, since it is impossible to predict the future, the priorities could change due to unforeseen circumstances.
I must say that it is not a financial advice and for each country in this world this list would be different due to differences in climate, market, economics, availability of labor and other factors.
Before I list the top 10 most attractive subsectors of horticultural business, it is important to look at the overall horticultural investment climate worldwide.
There was good and bad news in the horticultural investments in 2024. The good news was the growing awareness of new digital and resource-efficient technologies, which greatly reduce the risks for investors. These include digital field monitoring systems based on the weather stations, sensors and automation of fertigation; subsurface drip irrigation; drones: both flying and driving, which are basically cobots (collaborative robots); protected cultivation and others. These technologies become more affordable and investment into them offers a very short payback period, but greater knowledge sharing is needed to speed up their adoption.
The bad news is growing level of trade protectionism, causing losses to the industry, stagnating global trade; climate change with more frequent weather anomalies causing higher causing crop losses and market fluctuations and slow down in global economy impacting consumption.
Accordingly, when making investment decisions, it is important to put this information into the context of the country of investment.
Here’s my personal top 10 most attractive investment niches in horticulture, considering only large and established categories.
1. IQF freezing. One can freeze all types of fruits, berries and vegetables and they will be in most cases tastier and more nutritious than these purchased fresh in the supermarkets. Produce for freezing could be harvested fully ripe and it is a perfect solution for HoReCa industry as well as for consumers who cook at home. Also, otherwise perishable fruits and vegetables become perfectly storable for a long time after freezing and very tradable, without any distance limitations. Growing awareness of these benefits drives this market with a high speed. As a result, frozen produce trade is growing by around 7-10% or US $800mn per year – faster than most other segments of horticulture.
2. Blueberries. This category has been growing sustainably for more than 20 years now and yet it is not too late to invest into production of these tasty, healthy and transportable berries. Consumption of blueberries worldwide is still rather low, suggesting that there might still be many years of growth ahead. Blueberries can also be growing in most of the climates in the world and genetics are developing very fast to make them even more tasty, productive and resistant. Importantly, they are very convenient to consumers and can be taken on trips, to school, to work and eaten any time as a snack. Global trade is also growing by an average of 9% or US $450mn per year, which is good news for any investor.
3. Mandarins. A very popular fruit category, which includes also clementines and tangerines is referred to “easy peelers” simply because they are indeed easy to peel. Convenience is again a very important player but the great taste and new varieties with no seeds or very small seeds help this category thrive. Global trade of easy peelers is growing even faster than for blueberries – at 12% or US $400mn per year. However, they can only grow in certain climatic zones, unlike blueberries.
4. Durians. Many people outside of Asia have never heard about this fruit. Yet, it is now the sixth largest category in the produce trade, and it is the fastest growing trade category globally. Each year trade in durians growth by a whopping 26% or US $1.15bn, creating a lot of opportunities. However, there is a risk involved – China is the largest buyer driving the global demand up, but Chinese population is declining, and the country is having economic difficulties, which may slow-down this rapid growth or even reverse in case of economic recession in China.
5. Cherries. Another category where significant share of demand driven by China. However, these fruits always sell well, and they can be shipped in containers to a long distance thanks to modern fruit quality preservation technologies such as MAP packaging and cold chain. Increasing use of protected cultivation in this segment assures premium quality and high productivity, which helps obtain very attractive prices. Global cherry trade is growing by 8% per year or by US $368mn.
6. Raspberries (fresh). Many investors avoid this extremely perishable berry, but many are making very good money growing raspberries. Modern genetics offer very attractive, tasty and rather transportable fruit for fresh consumption and it usually sells at a higher price tag than trendy blueberries. Again, protective cultivation could also be a game-changer. Despite high level perishability, global trade of fresh raspberries and blackberries is growing by 7% or US $250mn per year. As a bonus – frozen raspberries are also in a very high demand internationally.
7. Potatoes. This segment is experiencing a renaissance. The once boring and cheap category, thanks to new modern varieties and new production and post-harvest handling technologies, is becoming very trendy again. Both: industrial and ware potatoes could be attractive depending on the country of production. Global trade is also growing fast – by 8% per year or US $344mn. However, only a very small percentage of potatoes grown is traded internationally.
8. Avocados. This fruit used to be the global leader in terms of investments in horticulture but is no longer the case. While investments into avocado production remain very profitable if suitable land with good access to ample water resources is found, global trade is slowing down, suggesting either certain market saturation or a necessity to lower the prices. These fruits remain rather expensive in most importing countries. There are also serious concerns about the water use in production of avocados, which impacts the demand for this product in some developed countries. However, each year global trade in avocados is growing by 4-5% or US $344mn and it is already the fourth largest trade category on the global produce market.
9. Greenhouse vegetables. This is a high-tech category with a very low production risk, which investors love. However, they often underestimate the market risk. It is a very dynamic category, but many large countries-producers must export. Yet, phytosanitary risks such as the recent ToMv virus, could ruin the whole business when importers close their borders. Global trade in greenhouse tomatoes, cucumbers and peppers is growing by 5-8% per year and is very large but the geography of exports is limited due to products’ perishability. However, protected production in general is one of the most attractive future investment categories as more and more products will be grown “under the roof”.
10. Oranges. Global trade in fresh oranges is not growing at all partly due to the competition with easy peelers. Consequently, it sounds like this segment should be excluded but there is a peculiar situation which changes the perspective a lot. Brazil has been for many years the main supplier of frozen orange juice concentrate (FOJC) with more than 60% global market share. However, citrus greening disease also known as Huanglongbing (HLB) and severe droughts have been continuously reducing production, causing prices for orange juice and oranges skyrocket to new all-time highs. Therefore, I expect that price support in this sector will stay for quite sometime and will help improve profit margins of growers.
This is my version of global investment priorities but there are many others worth looking at. Horticulture is very diverse, and products are numerous. Global trade of various exotic fruits, onions and strawberries is also growing rather rapidly, suggesting that there might be some attractive investment niches.
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