Let the good times roll

Departments - Outlook

July 21, 2021

We’ve all suspected as much – and the Cultivate’21 keynote address confirmed our suspicions – the state of our horticulture industry is very strong, coming off two consecutive seasons of strong product volumes and even stronger sales.

“We’re doing a great job growing healthy and attractive plants, our merchandising and marketing is strong, there’s not a lot of channel confusion right now, and consumers are happy to pay the established retail prices for plants – deep discounting isn’t necessary to hit our sales targets,” AmericanHort President Ken Fisher shared with the first industry gathering since 2019.

That’s great news of course, but it’s not to say we’re entirely on easy street in the greenhouse world. Economist Dr. Charlie Hall also addressed the crowd during the Cultivate keynote, highlighting some of the unique challenges you all will continue to face, even in the strongest of bull markets.

Supply chain disruptions (we are 40,000 truck drivers short of where we need to be currently), ongoing labor constraints (domestic job force quit rates hit an all-time high, 2.7%, in April), and rising input costs (26% increase in plastic goods alone in 2021) alongside rising plant prices (how will consumers, specifically the new plant parents we converted in 2020, react?) will continue to test even the most well-positioned businesses.

And yet, it is arguable that we’re better positioned than ever before to weather this multi-front storm. Growers had more cash, or working capital, for things like facility expansions or paying down debt, than in any previous season that Dr. Hall could recall. And demand from landscapers continues apace as the housing market continues to explode – there are 17% more landscape service providers in the market today than there was prior to the last Great Recession – a good sign that plants will remain in high demand in a hot housing market. Pre-bookings are also way, way up, with cancelled orders down as well.

For an industry that was toiling with how to attract more Millennial and Gen Z consumers, there’s no doubt it’s a good place to be in.

Best of luck with your fall and holiday plant production cycles, and let the good times keep on rolling!

Matthew J. Grassi, Editor | mgrassi@gie.net | 216-393-0362