Suppliers Will Increase Prices, Grower Education For 2015

Suppliers Will Increase Prices, Grower Education For 2015

SOI-Analysis1Vendors answered questions on Greenhouse Grower’s State Of The Industry Survey, too, and a common thread among them for 2015 is optimism.

Seventy-three percent of our (84) supplier respondents report that their sales were up in 2014, and 13 percent report flat sales, compared to 2013.

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Expectations for 2015 are high, with 89 percent of suppliers saying they expect sales growth in 2015, compared to just 62 percent projecting increased growth in 2014.

Some of that growth will come from increased prices, as 55 percent say they expect to raise prices in 2015. Another 37 percent of vendors say they’ll keep their prices the same and 8 percent say they expect to lower prices. Growers should budget for cost increases of up to 5 percent, based on these projections.

To defray input cost increases, growers need to take advantage of the savings opportunities suppliers offer through early ordering discounts. The key to this is in one word: Planning.

“Plan better,” says Tyler Chandler of Winfield Solutions LLC. “There are opportunities throughout the year to take advantage of significant savings if we are able to forecast better.”

“Order in advance, not last-minute,” says Steve Beall of Landmark Plastic. “Provide a forecast for the season, from which purchase orders can be generated to ensure on-time delivery.”

Growers also need to know their expenses, increase prices, forecast and track budgets and be more organized, vendors say.

“Growers should raise their prices to keep up with cost increases,” says Kurt Messick of Messick Co. “Many have no safety net.”

Terry Higgins of OHP, Inc., advises, “See the big picture. Think long term and plan long term.”

Price is only one part of the equation, and growers should give more consideration to the services offered as part of suppliers’ product price structure. Suppliers say they are willing to help growers, and the number one way they plan to do that in 2015 is through better education about their products and how to use them effectively, as well as incorporating technology for streamlined efficiency. Other ways vendors will help are with improved product selection and early order programs.

A few concerns for the next year among suppliers are similar to growers,’ including increased transportation costs and availability, drought, less availability of labor, consolidation among larger growers and increased price pressure from the big box stores.

Overall, however, suppliers are also optimistic about the opportunities 2015 has in store. With signals for an economic recovery, strong sales in 2014, a sense that younger consumers are beginning to embrace our products and emerging markets in edibles, ornamentals and medicinal plants, enthusiasm is high that sales will increase for growers and suppliers.

“We have eco-friendly products, and our industry has tremendous potential to take advantage of this movement and integrate our products into it,” Messick says.

Read what’s on growers’ minds in “Growers Are Optimistic For A Strong Year In 2015.”