Vegetable demand drives global seeds growth

The global vegetable seeds market, valued at around $8 billion in 2022, is the largest crop sector after corn and soybean.

As much as 80% of global vegetable seed sales are cornered by 10 countries: China, India, Japan, South Korea, France, Italy, Spain, the US, Mexico and Brazil.

Population and economic growth, urbanization, dietary changes and technology are driving the growth of the vegetable seeds market.

A key characteristic of this sector is its highly fragmented market, with over 40 different vegetable crops coming in different categories, species and families. This provides both opportunities, such as the ability to establish strong positions in particular niches, and challenges, particularly with respect to the organization and supply of complex product ranges

Despite the fragmentation, the vegetable seeds market is highly competitive, with 12 companies having annual sales of more than $100 million. Most companies supply more than 30 crop species, while eight specialize in vegetable seeds.

Research and development expenditure is in the sector is high, ranging from 15% to 30% of sales for most companies. This reflects the rapidly evolving technology, such as new genomic traits and the many for innovation, whether relating to crop yields or to characteristics such as taste, health benefits, appearance and shelf life.

Recent examples of technological advances include:

• Health/nutritional brand: Takii Europe's Gishiso PR tomato (phytorich range), containing twice as much lycopene as regular tomatoes
• Brands for snacking: Rijk Zwaan's SN!BS brand, a line of small healthy snack vegetables to eat on the go
• Processing/industry-focused brands: Easyleaf lettuce from Enza Zaden; one cut lettuce variety. All steps in the value chain can be carried out mechanically
• Brands for supermarket shelves: TomAzur from Enza Zaden and partners, long-lasting , attractively-colored tomatoes with longer shelf life
• Other concept brands: Bejo Zaden's Coolwrap, a concept cabbage variety with mild flavor and a square flatleaf designed for use in a wrap, sandwich or sushi
• Brands for enhanced tastes: Pairwise's Conscious Foodsmarket by end of 2023 with its green blend entering in range through retail and restaurants

R&D spending has also resulted in successful developments of hybrids over the years. Today, 80%-90% of vegetable species come from hybrid seeds, with the rest being open-pollinated. In fact, the first hybrid vegetable seeds for tomatoes and onions were introduced in the 1930s, shortly after the introduction of hybrid maize.

The growth of the vegetable seed market relies on various factors, including trends in domestic consumption and exports, and the growth in protected agriculture or controlled-environment agriculture – ranging from basic polytunnels to sophisticated greenhouse structures – that impact production intensity and seed prices.

Protected agriculture still accounts for a relatively small area, but its yields is often four to five times higher than those in open-field production. China has the largest area of protected agriculture, followed by India, Spain, Mexico and Japan.

S&P Global Commodity Insights digs deeper into this sector, examining key players, as well as the trends and policies affecting the sector's development in its latest Global Vegetable Seed Markets report.