State of the Industry: Changing Habits

Several changing trends and crop shifts have kept growers on their toes in recent years. Without an understanding of what crops are selling more or selling less and where the trends are guiding the industry, growers can find themselves behind the curve.

“When the economy dropped out in 2008 and 2009, we were able to hold our own as an industry goes,” says Preston Cox, owner and manager of Perennial Favorites Nursery. “We had a bad year where we didn’t have much of an increase in sales, but since then we’ve had some steady increases between 10 percent and 15 percent annually. Our industry is recession proof to a certain extent.”

With a still uncertain economy, growers and their customers are changing their habits to reflect differences in the market. Greenhouse Management conducted a State of the Industry survey to see what growers across the country were experiencing.

Here is what growers need to know if they want to understand where the trends and crop shifts are taking the industry.

Crop shifts
Changes in crops have led many growers like Perennial Favorites Nursery to expand and diversify offerings in order to keep up with demand in other areas.

“We have a lot of varieties of not only perennials, but annuals, natives, edibles, ornamental grass and quite a wide diversity of what we grow,” Cox says. “We’re a wholesale grower dealing mainly with independent retail garden centers and some landscaping trade.”

That diversity has allowed Cox to keep up with any changes in his product lines and see where customers’ habits are going. According to the State of the Industry survey, 40.1 percent of growers who responded said they planned to increase production of vegetable starter plants and 24.2 percent said they would increase production of produce.

“One of the trends that seems to be across the nation is in the edibles,” he says. “That’s something we have gotten into in the last three or four years is doing a crop of edibles, and herbs are included in that category as well. We’ve seen that increase 20 to 25 percent each year we’ve been in it.”

Another shift Cox has seen is an increase in perennials. The survey shows that 35.7 percent of growers expect to increase perennial production next year.

“Each year we’re seeing a steady increase there,” he says. “It’s not a big increase, but about 4 or 5 percent each year.”

Not everything has been on the increase however. Cox reported that perennial and annual ornamental grasses dropped off recently. The survey did indicate that 33.3 percent of growers planned to decrease production of annuals and 23.1 percent planned to decrease perennials.

“One of the bleak things we’ve seen the last two years are in perennial and annual ornamental grasses,” he says. “This year they really dropped for us and I don’t really understand why. Most of them are somewhat drought tolerant, but we’ve seen a decrease in popularity the last two to three years.”

Perennial Favorites Nursery is planning to decrease and increase production of certain crops moving forward based on what they’ve recently experienced.

“I’m planning fewer grasses for one, since that has been on the decrease,” Cox says. “Other than that, there isn’t anything else I’m planning to decrease. Everything else is going to stay the same or it’s going to increase. We are planning to increase edibles, especially herbs. We haven’t been able to grow enough herbs the last few years, so we’re looking to increase those, both perennial and annual types.”

These crop shifts are what have been driving a lot of the product decisions for growers.

“What you’re seeing is people being much more conservative in the products that they’re selling,” says Will Healy, senior technical and research manager at Ball Horticultural Co. “They’re looking at stuff they know will sell.”
 

Industry trends
Just as critical as crop shifts are to a grower, so too are general industry trends and how those can affect production plans for the coming year or years.

“The most stunning trend was people aren’t planting extra plants,” Healy says. “If they had an order for 1,000 baskets and they ordered the pots and the pots came in at 980 pots, they didn’t go and order a second pallet. They ordered 980 pots and they planted them up and threw the rest of them away. Three or four years ago, no one would have done that. They would have ordered two pallets, potted them all up and hoped that they would sell.”

What’s happening is people are experiencing that there is no advantage of putting in extra, so therefore they aren’t.

“That really is changing dramatically what the product mix is out there,” Healy says. “People are focusing on exactly what the order is. If there’s not an order or they don’t think they can sell it, they’re just not growing it.”

Another trend that was really stunning this year was people aren’t planting crops early or late.

“Usually you’d walk around greenhouses in January and there’d be plants out in the greenhouses, and by February they’re starting to get full and by March they are full,” he says. “This year you’d walk around in February and there still weren’t any plants. By March people are starting to fill up greenhouses. People planted later and they planted what they had orders for. It’s not really specific to what crops people are growing, but it does speak to the bigger picture of what’s happening out there. We’ve moved from a market where everyone believes in the field of dreams — plant it and they’ll sell it — to a more rational — if I’ve got an order I’m going to grow it.”

Driving factors
These changes across the industry have a couple different driving factors behind them, but the biggest is the economy.

“The economy is No. 1,” Healy says. “It’s the lack of large landscape planting, new gardens, new houses and developments that they need big blocks of color for. That’s just not happening. When was the last time you saw a street corner littered with new house signs? The housing market still not being as strong as it was five years ago is driving the reduced purchasing.”

The economy is also a big factor in the increased vegetable products as well as people wanting to grow their own crops due to disease scares.

“One thing driving the edible market up a little bit is the economy has been struggling, and people can produce some of their own food in gardens, decks and in containers,” Cox says. “Another reason for edibles being on the increase is over the last several years the recent scares with salmonella and things like that. People are growing things on their own and not having the exposure to contamination that they had in the past. I think the economy is the bigger part of it.”

While changes in the economy are shifting how people purchase, the customers themselves are changing their habits.

“Another thing we’ve seen in the last two years are the patio box of annuals; 16- and 18- inch container gardens,” he says. “Most of what we’re growing lends itself to container gardening, whether it’s on decks or patios. My feeling is more of the baby boomers are retiring and they’re giving up single-family homes and going into condos, townhomes and apartments or something like that or maybe they’re just tired of the gardening. Container gardening seems to be on a steady incline for us over the past several years.”

People are changing the habit of what they’re buying and that’s one of the biggest drivers.

“The traditional customers are still coming back, which is good news,” Healy says. “The customers who bought last year are coming back and buying again. The new customers with new beds, new planting areas, new pots, new patios that need new stuff is where a lot of the growth has occurred over the years.”

Healy says a majority of people are purchasing “comfort plants” or plants they know.

“You want to focus on plants people know and plants that are successful,” Healy says. “If people are trying to figure out what to do, they need to look at the trend of, ‘Can I sell this.’ It’s not surprising this trend, because this is really the European experience. If you were traveling through Europe five years ago, this is what they did. They ordered the exact number they needed, they grew it exceptionally, they sold it out and they made money. If they grew 10 more, then they lost money. We’re becoming more European-like in our market.”
 

Gregory Jones is a Cleveland-based freelance writer.