State Of The Industry: Top Trends For 2010

State Of The Industry: Top Trends For 2010

Much of what we can expect to see in 2010 is a progression of what we saw in 2009. Here are the top 10 trends shaping the greenhouse floriculture industry.

1. Supply Chain Correction
The industry had been in a state of oversupply for a long time. The past two years, we’ve seen growers become more conservative with production. One reason for this shift is the advent of pay by scan or vendor managed inventory, where growers only get paid for plants rung through the cash register. The dumpster is no longer a paying customer. Another is fear to committing to too much inventory that’s not presold. Wholesale growers who successfully serve independent retailers are used to driving a lot of sales on speculation, but across the board, our industry is minimizing risk.
This was clearly evident this past poinsettia season. While growers overproduced in 2008 and threw a lot of plants away, in 2009, we heard many reports of being sold out and needing to buy in before December 10.
The supply correction has been painful because so many allied businesses serving growers were built on overproduction, an inflated model. Retail cutbacks also have hurt growers accustomed to growing a lot more. The industry is right sizing itself, which is painful in the short term but will be better long term.

2. Industry Consolidation
We continue to see industry consolidation at all levels and more growers leaving the industry. To some degree, the box stores are forcing this by dramatically reducing their grower vendor base (See “Life After Walmart, page 14.) For those who are seeing gains in business, it is at the expense of other growers because the industry is flat as a whole. The most aggressive businesses are taking market share.
We also are seeing even more dramatic consolidation in companies serving growers. This was especially true on the flower breeding side the past two years, with Syngenta purchasing Goldsmith Seeds and the Yoder name and mum and aster lines. Benary bought Bodger’s seed lines, and a new company, Green Fuse, emerged to represent the vegetative lines. Ball Horticultural Co. also acquired Darwin Plants and Kieft Seeds and entered into an exclusive distribution relationship with Selecta.

3. Growers Working Together
The growers who have emerged as primary vendors for the box stores are now responsible for providing the complete assortment of products, which has required them to buy in. The big grower has now become the big customer for other growers. This has been a lifeline for growers who have lost retail accounts and for growers who would rather not be involved in marketing and merchandising. But there always is the fear that if the larger growers expand production, the contracted growers will be out.
We’re also seeing more growers and garden centers working together at the state or metro level. In Northwest Ohio, Maumee Valley Growers joined together to launch a successful promotion with The Toledo Blade newspaper last spring.

4. Focus On Edibles
Vegetable gardening was definitely a high point last spring and always resonates with challenging economic times. In addition to reducing grocery bills, consumers are interested in eating more healthfully. Herbs and vegetables are an ideal fit for growers pursuing sustainable and organic niches. Consumers seem to care more about organically grown food than flowers, although some certified growers are treating all their production this way. Plug Connection has expanded its grower network producing Organiks. Ball’s Burpee line also includes sustainable packaging options. Beyond vegetables and herbs, nursery growers are doing well with trees and shrubs bearing edible fruit, like blueberries.

5. Emerging Eco Markets
Green roofs and green walls are the rage in urban centers and have been an opportunity for growers who produce sedums. The challenge has been learning the logistics, because this segment of the industry is more like construction than landscaping. Companies are creating modular planted panels to install. Penn State has been researching which plants and methods work best. Beyond these installations, sustainability continues to be a focus for retailers and consumers. More growers are pursuing certifications that validate their sustainable practices. These include VeriFlora, MPS and USDA Certified Organic. Growers are making the investment because they see opportunities to set themselves apart from their competitors. Ball has created a sustainable supply chain that includes plug and liner growers. Walmart is working on creating a sustainability index for products similar to nutrition labeling in food.

6. Alternative Energy
With labor, energy and transportation being a grower’s top three costs, growers are looking at ways to reduce and control their heating costs and be immune to fluctuations in oil-based markets. USDA grants and incentives have made it economically feasible to convert boiler heating systems from natural gas to biomass and biofuels. Others are installing turbines to harness wind power to generate electricity. Viability LLC is a firm that specializes in helping growers secure these grants, which can be as large as $500,000.

7. Gardening Versus Decorating
The trend has been people getting away from the time and work involved with gardening and buying larger plants, patio planters and baskets for instant gratification. Proven Winners has done the best job capitalizing on this trend with its new 30-Second Planter, which is a fully planted paper pulp insert that can be dropped into patio planters. Proven Winners also is emphasizing outdoor living in all of its imagery and promotions.
With every trend there is a counter trend, such as people returning to traditional gardening, especially with vegetables and community gardens. The recession also brought a resurgence in do-it-yourself.

8. Water Issues
Although a good portion of the Southeast received a lot of rain last year, water issues are still big in California and Florida. And in many places throughout the country, all it takes is a few dry years to create a drought situation. In Southern California, growers who participate in the state’s Interim Agricultural Water Program have had to reduce their consumption by 30 percent. Citizens have been asked to conserve voluntarily. In addition to consumption, runoff filled with nitrates has been a big concern in Florida. Growers are learning how to use less fertilizer and reduce their water use

9. Internet Technology & Social Media
In addition to building comprehensive websites and generating e-newsletters, more growers and garden center retailers are getting involved with social media via Facebook and Twitter. The idea is to build that one-to-one customer relationship and communicate more often. It’s an attractive alternative or supplement to cost-intensive printed promotions and catalogs. Innovators in blooming potted plants are finding ways to make the consumer more engaged with the plant they purchased. Holtkamp Greenhouses rolled out a MyViolet.com program for African Violets this fall. Consumers can go to the website and enter a code unique to the plant and find extensive care and diagnostic information.

10. Collective Marketing
There is always a great deal of interest in collective marketing for the greater industry but there never has been a will to pay for it. The latest proposal is a grassroots initiative from our columnist Laurie Scullin and Frank Zaunscherb called Plant Life, focused on the benefits plants bring to our lives, contrasting life without plants with a much fuller life with plants. Industry members support the idea but have yet to back it with dollars.
One grassroots initiative that’s heading into its ninth year is America In Bloom (AIB), a revitalization program and contest that engages cities in plantings. More than 170 cities and 37 states have participated to date.

Leave a Reply

4 comments on “State Of The Industry: Top Trends For 2010

  1. I would be careful in recommending Viability LLC as firm specializing in helping farmers obtain grants. Our firm hired them at a substantial price to process our various elible grant requests. Ultimately the final application to the USDA combined two different types of requests which, if submitted individually were eligible for funding, but because Viability submitted them under a single application it made our application ineligible and therefore it was not approved. We discovered later that the instructions in applying for these grants clearly state how to submit the requests however Viability’s response to us was that they thought the odds were good that the joint requests might be approved. They did not refund any of the fee we paid them and because of the timing of constuction of the improvements, they were no longer eligible for subsequent grant funds.

  2. I see grant applications requests all the time.
    Don’t know how to apply for them.
    Most I gather are competative.
    I have also heard of grant writer’s that charge fees. I dont know why they should charge fees since they should be included in the grant budget.
    Thats if you get approved then they share the same risk as the one asking for the grant. Slim chance right!

  3. I would be careful in recommending Viability LLC as firm specializing in helping farmers obtain grants. Our firm hired them at a substantial price to process our various elible grant requests. Ultimately the final application to the USDA combined two different types of requests which, if submitted individually were eligible for funding, but because Viability submitted them under a single application it made our application ineligible and therefore it was not approved. We discovered later that the instructions in applying for these grants clearly state how to submit the requests however Viability’s response to us was that they thought the odds were good that the joint requests might be approved. They did not refund any of the fee we paid them and because of the timing of constuction of the improvements, they were no longer eligible for subsequent grant funds.

  4. I see grant applications requests all the time.
    Don’t know how to apply for them.
    Most I gather are competative.
    I have also heard of grant writer’s that charge fees. I dont know why they should charge fees since they should be included in the grant budget.
    Thats if you get approved then they share the same risk as the one asking for the grant. Slim chance right!

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