Personal Indoor Farming: Market Size and Exit Opportunities

If a company builds the best ‘consumer indoor farming product’ company possible, how big and valuable would it be?

Well, here’s one way to look at it:

Take the existing gardening market in the US, and assume that some percent (here, 0.5%) into climates not suitable for outdoor gardening, mostly constrained by urban space or weather. These are obviously worldwide trends. You get this:

If just 1 of 200 existing US gardeners buys a $1,000 indoor farming appliance and spends $30/month on supplies from you, your company will do $200M in hardware revenue and initiate $72M in high-margin annual recurring revenue.

The 63% increase in food gardening with millennials over the past five years leads me to believe that’s a conservative estimate.

A lot of people want to grow their own food.

And a lot of them live in cities, or in places that experience cold winters (or droughts, for that matter).

It’s not directly related, but indoor agriculture as a whole (according to this report) is “a $500m+ industry in the US, according to market research firm IBISWorld, but we estimate the potential market at more like $9bn. We define indoor agriculture as growing produce and raising fish in warehouses, containers and greenhouses using hydroponic, aeroponic, and aquaponic techniques.”

Right now, the vast majority of that $500m+ market is commercial-scale farming. I expect consumer in-home farming will branch off from commercial indoor farming as awareness grows and the category matures.

Here’s a spreadsheet that walks through one way I’ve calculated a $16B TAM for food growing appliances like Grove’s first product, the Grove Ecosystem. This is in the “Farming Appliance” category, specifically for city-dwelling (“Metro early adopter” = MEA), lifestyle-focused Early Adopters.

In the above spreadsheet, I include a tab for the opportunity I project for the magic bullet — a automated, hyper-productive appliance that achieves relative ubiquity in the US (note all companies in the space are several years from developing this appliance).

Exit opportunities

The entire business, product-set, customer-set, and brand is especially valuable to:

  1. The public — Any company that develops this category into a big, profitable business will have the opportunity to become a public company through public offerings.
  2. Appliance manufacturers — R&D and business units from many of the major appliance manufacturers, from Arçelik to IKEA (who already developed a small, inexpensive unit) to Whirlpool are prototyping and assessing the consumer indoor farming appliance space. As consumer awareness of this product/appliance category matures, several of these manufacturers and brands will try to build their own devices/appliances, potentially spurring M&A activity to the top category startups. Here’s a wikipedia list of the top home appliance manufacturers.
  3. Indoor farming distributors — Sunlight Supply & Hydrofarm are the biggest in terms of wholesale revenue and are large enough for positive M&A outcomes. Their current end customers are mostly DIY-oriented folks growing cannabis, but rising demand for consumer indoor food farming is on their radar and they’re looking to distribute (or potentially acquire) appropriate all-in-one devices & appliances.

The IP and data generated from building a company in this category (particularly larger, more automated, sensor-equipped products) is especially valuable to:

  1. Traditional greenhouse companies
  2. Plant-manufacturing/commercial indoor farming facilities
  3. Space habitation (on ships, moon, Mars, and beyond)

For these projects, the most valuable component is the plant-growth data generated from having thousands (or more) black box devices in consumers hands. No companies in this category have enough sheer data YET to be statistically significant, but several startups have growing datasets and great anecdotes that offer insights.


Bringing people closer to fresh food and to nature in their homes is massive opportunity. If you share in that belief, or you’re intrigued, let’s be in touch!

Thanks for reading,

Gabe

Email: gabe@grovelabs.io
Twitter: @gblanchet3

Additional Reading

If you’re interested in this analysis, I recommend reading this overview of ‘personal indoor farming’

My brainstorm on ‘Composition of a great team for consumer indoor farming companies

Liz’s post on ‘Your Grove Is Not A Device

My brainstorm on ‘small, hobby indoor gardening device companies

My analysis of the competitive landscape