State of the Industry Survey Says 2017 Will be a Year of Investment and Growth for Horticulture

State of the Industry Survey Says 2017 Will be a Year of Investment and Growth for HorticultureIt’s safe to say that the industry is guarded looking ahead to 2017. With changes happening in Washington, an economy that is set for growth in the coming years, and growers ready to invest in their businesses, the outlook for horticulture seems positive.

Growers, suppliers, and researchers who took Greenhouse Grower’s 2017 State of the Industry Survey echoed this general cautious optimism in the answers they provided to the questions tailored to their specific influences on the market.

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Greenhouse Grower’s 2017 State Of The Industry Survey included separate questions for growers and suppliers, but also this year for researchers. Of our record 975 respondents, 348 were greenhouse growers; 264 were grower-retailers; 74 were plant brokers or breeders; 104 were manufacturers or suppliers of hard goods; 29 were crop consultants; 83 were university, research, government, or Extension agents; and 73 were allied to the industry in some fashion.

Growers and Suppliers Share Business Indicators and Concerns

State of the Industry Survey Says 2017 Will be a Year of Investment and Growth for HorticultureHorticulture industry suppliers said their 2016 sales were up from 2015, certainly a good indication that the industry is growing and producers are spending. For 30% of suppliers, sales this year are up more than 10%, while 25% reported sales increases between 5% and 10%, and 16% said sales are up less than 5%. Sales are flat year-over-year for 22% of suppliers, and down from 2015 for 2%.

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Growers can expect prices to increase in 2017, as 47% of suppliers said they’ll raise prices somewhere between 1% and 5%, while 9% said prices will be more than 5% higher. Meanwhile 43% of suppliers said they’ll keep prices flat and another 2% expect to lower prices in 2017.

About 70% of grower respondents said their sales grew in 2016 over 2015, and 65% said their production increased in 2016 compared to 2015 production.

Growers are planning to expand their production this year, with 50% — the largest percentage of overall in the past few years — saying that they plan to invest in greenhouse structures and coverings.

Suppliers said growers should become better business people, implement new technology, automate, learn how to improve efficiency, plan ahead, and learn how to ask their customers for more money, among other suggestions.

“Really take a hard look at using numerical data to make informed business decisions,” said one supplier.

Another said,“Look at the total cost of a unit, labor, inventory, freight, carrying cost of inventory, etc., versus just the unit price.”
Many suppliers agreed that growers need to stop undervaluing their products.

“The one-price-fits-all selling model compromises item level profitability,” said a supplier. “A lot of work goes into greenhouse production. Growers should be comfortable asking to be paid for their efforts.”

Growers Look to Change Up Their Crops

State of the Industry Survey Says 2017 Will be a Year of Investment and Growth for HorticultureOverall, the most growers said they plan to increase production of perennials (35%) in 2017, followed by herbs and vegetables (32%), annuals (29%), flowering potted plants (27%), and plugs and propagation material (23%). Interest is rising in woody ornamentals (18%), trees (12%), and potted foliage (11%), as well as greenhouse produce for the fresh market (15%).

There has been little change in the proportion of growers interested in pursuing cannabis production. About 3% of growers said they will pursue this market in 2017 (up from 2% in 2016), while 18% said maybe they’ll consider it in the coming years, and 79% said they have no intentions to grow cannabis.

On the veggie side, currently 20% are growing greenhouse produce for consumer markets, 20% say they plan to increase production in this area in 2017, 15% say they might grow produce in the next few years, and 64% said they are not interested in protected agriculture.

Industry Growing Optimistic About 2017

Engaging millennials in horticultural products is where some of the most exciting growth opportunities lie for the future of the industry, from horticultural suppliers’ perspectives. The growth within the market, and the new ways consumers are starting to use plants is inspiring, they say.

“Gardening and the industry is continually changing,” said a supplier. “It’s no longer about planting your standard annuals, but people are getting involved for health, therapeutic, and other reasons. This brings new opportunities to research and educate, so businesses can survive in this changing industry.”

Another supplier had similar hopes, saying, “The opportunities are endless. There is a giant wave of retail customers just waking up to the world of horticulture. The new generation of creative, do-it-yourselfers value nature and value the efforts to create these products. They are not gardeners, but they are outdoor hobbyists.”State of the Industry Survey Says 2017 Will be a Year of Investment and Growth for Horticulture

Looking forward to the 2017 season, growers are feeling optimistic, as well.

“Excellent market conditions, a growing market share for us, and a generally favorable business environment,” show promise in 2017, one respondent said.

With the last two years of decent spring sales and improving interest in gardening among consumers, the outlook is positive, and growers seem ready to tackle 2017 with gusto.

“We get another shot at perfecting our craft,” said a grower. “There’s nothing like the excitement of filling up all of our greenhouses and watching it all leave.”

Another said, “Spring always comes, and it’s my favorite time of the year. No matter what the status of the economy, the weather, the political situation, or anything else (at least anything we have experienced so far), the urge to plant — spring fever — always comes to a good segment of the populace.”

Suppliers are also hopeful that a changing economy will fuel continued growth in the market, and trends toward improved marketing, and innovations in breeding and equipment technology will streamline production.

“It would appear that our industry is as healthy as it’s been in a number of years,” a supplier said. “The level of optimism alone is exciting and inspiring. Growers generally have a bright outlook moving into 2017.”

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