Plants Sales Are Up For Fourth Straight Year, According To Spring Crops Survey

Spring Crops Survey Chart1The spring of 2016 was largely considered to be a success by 86% of the growers who answered Greenhouse Grower’s annual State Of The Industry Spring Crops Recap Survey. In many parts of the country, growers said excellent weather in very early spring got the season off to a fast start, but heavy rain and less than ideal weather in May made sales lag through peak shipping. Then excellent weather in late spring helped growers make up sales for what turned out to be a lucrative selling season in 2016.

With 103 respondents to the annual survey, 54% were grower retailers, 36% were wholesale growers, and 10% identified themselves as young plant growers.

The most responses came from the Midwest with 26%, followed by the Southeast (22%), and Northeast (18%). But the Southwest (11%), West (5%), and Northwest (4%) also were represented. Fifteen percent of responses came from readers outside of the U.S.

Spring Sales And Shoulder Seasons Continue To Improve

Spring sales have been increasing over at least the past four years as the economy improves and consumers seem to be buying more plants, growers reported.

“The last few years have been good ones for those businesses that survived the great recession. It is awesome that people are using plants more than they were five years ago,” said a wholesale grower from the Northeast.

Indeed, 67% of growers reported sales increases in 2015. In 2016, that number has grown, with 73% of growers reporting year-over-year sales increases. Meanwhile, 10% reported flat sales and 17% reported sales decreases from 2015.

Overall, spring sales met (33%) or exceeded (42%) growers’ expectations in 2016, but the season fell short of expectations for 25% of our survey respondents.

Most growers (74%) said they grew enough product to meet demand, but the areas that fell short included edibles, combinations, hanging baskets, pollinator plants, and early spring items, growers said.

“We missed a considerable number of pre-booked vegetables due to production and timing issues. Had we met these numbers, we would have increased our potted vegetable sales by 47% from 2015,” said a wholesale grower from the Northeast.

The good news is, growers are seeing extended sales in early spring and then after the main spring season into the summer months. But better planning is needed for growers to take advantage of sales from eager customers, as some growers capitalized on early spring sales, then found they had shortages later in the season.

“For the most part the rains came at convenient times, and with a very mild winter, we had brisk early sales and were sold out of best product mix before Mother’s Day. We had to source extra liners to have Mother’s Day sales. Late spring was odd and erratic in terms of what sold versus what did not,” said a grower-retailer in the Southeast.

Spring Crops Survey Chart3Sales Broaden In Traditional And Expanded Markets

Greenhouse producers are seeing growth in a few market areas, but it obviously differs based on their business type. Among grower retailers, 57% saw increased sales in their own retail shop, while other growth areas included landscapers (27%), farm markets (16%), and independent garden centers (14%). Online sales also brought increased sales for 10% of grower-retailers.

For wholesale growers, sales growth was highest at independent garden centers (50%), landscapers (35%), other growers (27%), and supermarket chains (23%). Other growth areas included home improvement chains (15%), events and fundraisers (15%), farm markets (12%), mass merchandisers (11%), and online sales (8%).

And as one might expect, young plant growers saw the most sales growth to other growers (50%).

Meanwhile, sales declines for wholesale growers were felt mostly at independent garden center stores (23%), other growers (18%), and landscapers (13%). Areas in decline for grower retailers were sales to other growers (22%) and independent garden centers (19%).

Growers serving box stores said sales either decreased by less than 5%, remained about the same, or increased slightly.

“Some retailers, and even some of our grower peers, fail to increase prices to meet the increasing costs of production at their operations,” said a wholesale grower from Western Canada.

All Crop Categories See Boost In Sales For 2016

Growers are reporting that they sold more plants in all categories in the Spring Crops Survey, including annuals, perennials, flowering potted plants, and edibles. Based on sales this year, growers said they would increase production of edibles (40%) and perennials (38%) for 2017, as well as growing their own plugs and propagation materials (38%) and more annuals (31%). In the past three years, annuals and edibles were marked as the crops most growers would increase. Across all categories, though, the majority of growers who responded to the survey say they are planning to keep production numbers the same for 2017.

Annuals were still top performers again in 2016, with 56% of growers reporting sales increases over 2015. This is up 3% from 2015, but still not as high as 2014, when 61% reported increased annuals sales. Another 14% said sales remained flat, and for 14%, annuals sales dipped this spring.

“We are glad June weather for Ohio has been great. Our annuals sales are increasing by 0.25% to 0.5% per day,” said a Midwestern grower retailer.

Edibles are the next biggest category, with 47% of growers who produced edibles reporting that sales increased over 2015; last year 48% reported increased sales over 2014. Meanwhile, 15% of growers said that edibles sales were the same, and 19% said sales decreased.

“It looks especially promising for many smaller growers like us when we hear so many individuals and some businesses get serious about buying local. The growing trend I’m seeing is most restaurants and informed consumers are caring more about where their produce comes from. Buying local is truly starting to mean more, and it’s good news for us,” said a grower in the Northeast.

Flowering potted plants continue to increase in sales for 42% of growers, compared to 48% in 2015. For 29% of growers, flowering potted sales were flat over 2015, and only 10% saw decreases in sales this year.

For the second consecutive year, the smallest growth category was container perennials, with 39% of growers saying sales increased over 2015, compared to 41% growth in 2015 over 2014 sales. Sales were flat over 2015 for 18% of growers, and only 8% reported reduced sales.

Spring Crops Survey Chart2Growers Most Concerned Over Weather, Labor

There are two factors that cause endless worry for growers, and unfortunately, both are almost completely beyond their control. Weather and labor are perennially the number one and number two struggles that challenge growers’ all-important spring seasons. While they have accepted their fate as far as the wildly unpredictable weather goes, growers are becoming increasingly concerned as the labor gap continues to widen.

Most growers rated the weather moderately cooperative (37%) or moderately uncooperative (32%), while 18% of growers said it was extremely bad and 13% rated it excellent.

“We had an entire week of rain the last week of April (we would have blown April ‘15 out of the park if we had normal weather), May was exceptional with fantastic weather, and we have had a hot, dry June, with more 90-degree days than in all of 2015. Unfortunately, you cannot control the weather, [just] market to bring people in the store and stay positive,” said a Midwestern grower-retailer.

In the West, growers who have been impacted by drought are working to recover from the past few years, despite as-of-yet unsettled weather patterns.

Approaching the weather with a positive attitude actually made a tangible difference in sales and the season’s outcome, according to a wholesale grower in the Northeast.

“Despite the weather, the overall season was good. Throughout the season, we remained positive that people would eventually plant their flowers. This positive attitude paid off. On the wholesale sales side, the customers who complained about the rough weather had lousy springs. Those who dealt with the rough weather in a more positive manner seemed to have good seasons.”

The ongoing labor shortage has been especially rough on growers and grower retailers this spring. It is an issue that most growers are worried could make or break their businesses if they don’t find a solution soon.

“Labor is going to be the end of our industry. If we do not solve this problem [including] the immigration issues, our industry will not survive. We must fix this or none of the other problems will matter,” said a grower retailer in the Northwest.

Beyond general labor, growers are also worried about recruiting and retaining skilled and educated young people, because it is hard to attract them in an industry with historically low pay and the manual labor that’s still often required.

“Finding employees who have the work ethic it takes to make it through spring is a real challenge. We are trying to keep the seasonal ones coming back each year,” said a wholesale grower in the Midwest.

There are answers to the labor problem, however. Growers are finding the need to automate their operations, increase wages, both for full-time and temporary workers, and improve recruiting and retention efforts.

“Availability of quality, seasonal labor continues to be a headwind we have to address,” said a wholesale grower in the Southeast. “We are addressing the issue with three initiatives:
1) Automation. The more tasks we can automate, the more efficiently we can get things done in the busy season, thus reducing the reliance on seasonal labor.
2) Leadership Training for our Managers. With a more limited pool of seasonal employees, the key is retention, so our managers are going through leadership training to help improve retention.
3) New Recruitment Initiatives. We are starting to recruit earlier in the season, providing short-term incentives, and assuring the entire team knows we cannot achieve our goals without the seasonal team.”

What Will 2017 Bring?

Growers know the labor issue is likely to get more serious before it gets better, so 35% said staffing is their biggest challenge as they look forward to Spring 2017.

Following labor, top concerns include weather (27%), competition (14%), and the economy (9%). Other concerns are regulation, marketing, drought, transportation, and access to credit.

Ultimately, it is up to each operation, no matter what size it is, to do whatever it takes to stay in business, said a grower-retailer in the Northwest.

“I think we have huge opportunities to grow. Grow great product, raise your prices, pay people more, find a way to ‘sell’ the higher prices. Use a better pot, a better tag, have a better salesperson (one who knows how to smile). Be more! You can and will have to find a way to compete, and you must make a dime, or it’s just a matter of time until you shut the gate.”

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