Greenhouse Industry’s Positive Momentum Looks Like it Will Carry Into 2018
Each year, Greenhouse Grower’s State of the Industry survey provides invaluable insight on the different segments of our industry, how they’re growing and changing, the challenges and opportunities we face in each segment and as a whole, and the outlook on the coming year. It’s always enlightening to see where we stand, and to determine, based on your answers, where we’re going.
Here are some standout observations. Most of these are based on anecdotal answers to the open-ended questions asked in the survey.
Growers and suppliers are making money. Sales are up year over year for most growers and suppliers, and that momentum from growth in 2017 will carry over into 2018. The majority of growers and grower-retailers have increased production year over year to account for increased sales and consumption. That being said, most suppliers indicated they will increase or keep prices the same in 2018, despite growers’ fear of rising production costs.
Growers increased profits in 2017 by raising prices and paying more attention to their operational costs through integration of new processes like open-book management and lean flow. They invested in their operation’s infrastructure and in technology and automation to increase efficiency and reduce labor. They stayed open longer and concentrated on growing sales in shoulder seasons, reduced inventory, and focused more on niche and specialty plants like succulents and foliage crops. More growers and grower-retailers are zeroing in on pull-through marketing via social media and developing experiences for their customers with events and education.
Emerging industries are fueling technology investment. With more suppliers turning their attention to controlled environment agriculture (greenhouse veggies) and cannabis industries, innovations like LED lighting and automation will become more affordable. Meanwhile, more greenhouse growers seem to be showing interest in diversifying their businesses, as well, which could “right size” the ornamentals industry, some suppliers said.
By far, the biggest challenge dogging growers is finding quality labor, as well as experienced growers, and paying them enough to retain them. But just as complicated for some producers is determining where to start with technology investment and implementation in order to provide the greatest increase in efficiency and maximize their return on investment.
Growers and retailers are retiring or closing their doors. We all know that the industry is facing a generational shift, but this year more than others, it seems we’ve seen more growers and retailers say they’ll be retiring in 2018 or in the next two to three years. With only about half of growers reporting in the survey that they have someone in the next generation ready to take over for them, we may see the shuttering of more businesses by 2020.
Horticulture is a great place to be. Over the past few years, I’ve noticed one thing that’s always consistent. No matter what the current economic or political climate, the overarching outlook on our industry as we head into a new calendar year is always overwhelmingly positive. The promise of a new year, a new spring season, and new opportunities to talk to customers and spread their enthusiasm for plants and horticulture, makes the folks in this industry downright giddy. It’s inspiring, so keep sharing that passion and let it fuel your profits for 2018.