The State Of The Young Plant Market
The young plant market remained relatively stable in 2013, according to Greenhouse Grower’s annual Young Plant Grower Survey. While there was some shifting of position among the Top 20 growers as compared to our 2012 list, the shifts were mainly small, just up or down one position. The exception was Aris Horticulture. The combined total production from its three divisions — Keepsake Plants, Aris and Green Leaf Plants — was 29 to 33 million units, a drop of 47 million plants, which took the company off the Top 20 list this year.
Overall, the results of our survey showed a net loss to the market of 94 million units compared with 2012 among our Top 20 young plant growers. Total production among the Top 20 in 2012 was 2.96 billion plants, so it was a reduction of about 3 percent.
Annuals Continue To Decline
Last year we reported that production of bedding annuals was declining, as indicated by respondents to the survey. The trend continued this year, with the majority of growers who answered this question saying they had cut back on annuals.
However, specialty annuals led the way in categories that are growing, followed by blooming potted plants. Again, this follows the trend reported last year. Perennials seem to be bouncing back a bit, with several growers reporting they are seeing gains in this category.
A Trend Toward Larger Sizes
The majority of young plant growers in our survey say there is a trend toward larger sizes, in particular toward 288 trays.
“Larger size plugs reduce the finish time for the purchaser,” says Bobby Barnitz of Bob’s Market & Greenhouses.
Doug Cole of D.S. Cole Growers agrees, saying he is seeing more interest in larger liners for items that would otherwise need to be started in January or early February.
“More and more growers are moving away from the 512 tray and starting with the 288 tray,” says Bill Swanekamp of Kube-Pak. “Sales of 162 and 102 trays are up, as well.”
However, it depends on the customer, because a few growers see a trend toward smaller sizes and others are seeing increased demand for both small and larger sizes.
“Small sizes are growing in popularity due to the price point and the lower freight costs,” says April Herring of Pacific Plug & Liner.
“For smaller customers, the trend is toward bigger inputs; for larger customers it’s the opposite,” says Paul Karlovich of C. Raker & Sons.
His view is seconded by Andrew Bishop of Green Leaf Plants, who also sees more demand for both smaller and larger sizes. “The distribution is getting flatter across a broader range,” he says.
Handling Late Orders
Every young plant grower has to grapple with the issue of late orders, but our survey respondents deal with the issue in different ways. Some plan for it, growing extra product on speculation; others are pulling away from growing on spec because they find it to be unprofitable.
“The trend is for orders coming in later and later, but as a producer you have to put certain stipulations in to handle those late orders,” Barnitz says. “There is nothing easy about it, because it affects your space allotments and overall efficiencies of how your production is handled.”
“As an organization, we have put procedures in place to deal with the lateness of orders,” says Kathy Pantzlaff of Floral Plant Growers. “We try to make the ship dates for as many late orders as possible. When we cannot meet a required ship date, we present other options to the customer.”
Spec production is still a key strategy for some. Pacific Plug & Liner, for example, grows product on speculation based on previous years’ sales of very popular or new items, says Herring.
“Filling last-minute orders is important to us,” says Larry Silverman of Silverleaf Greenhouses. “We grow quite a bit of spec material during certain times of the year.”
Quality considerations help make decisions on late orders for Gro ‘n Sell.
“Ninety percent of our business is grow-to-order,” says Dave Eastburn of Gro ‘n Sell. “If there is insufficient lead time or deadlines are missed, we don’t attempt to fill the order. The product won’t finish with the correct specs and everyone will be disappointed.”
Gary Knipe of the Keepsake Division of Aris Horticulture, says his division has a bit more flexibility because it produces vegetative cuttings from the company’s own stock.
“We can handle late-season orders by keeping our stock in production longer,” he says.
Freight Costs, Labor And Profit Margins Are Top Concerns
While the challenges are many, three stood out, and they are familiar ones to most growers — not just young plant producers. Careful attention to detail and efficient business practices are how growers are dealing with increased price pressure, labor costs and shortages and skyrocketing freight costs.
“Our customers don’t have any appetite for price increases, so we are constantly striving to lower our production costs,” says Walter Gravagna of Van de Wetering Greenhouses.
“A big challenge is maintaining quality in an environment of relentless pressure on prices,” says Green Leaf’s Bishop.
Staying competive and still remaining profitable is another concern for growers.
“We are looking closer at each quote and at freight charges to make sure that every order going out the door produces profit,” says Tom Van Vugt of Plainview Growers.
Mike Rinck of AG 3, Inc. says his main challenges are finding growers that are detail-oriented, skyrocketing freight charges and overall labor issues.
Nobody has any definitive solutions, but everyone is looking at every detail.
“I don’t know if you solve these issues,” says Silverleaf’s Silverman. “You learn to work hard at controlling costs, whether they be materials, energy or labor. All are challenging in today’s marketplace.”