When we spoke with Nicole Bent, president of Shelmerdine Garden Centre, the Canadian IGC was in the midst of a province-wide shutdown. Even businesses deemed essential in the spring, like IGCs, are barred from selling any non-essential goods.
“When we heard that, we closed our doors,” she says. “It’s Christmas, we can’t rely on seed sales.”
Shelmerdine is a destination garden center outside Winnipeg, the capital of Manitoba. Much of Bent’s marketing is directed toward city dwellers. In fact, the IGC’s robust online store was designed mainly as a showcase to convince Winnipeggers to make the drive out of the city to the store. However, it was quite handy to have the infrastructure for an online store already in place. This year, when the pandemic forced many businesses to close their doors and change their operating procedures, many were left scrambling to build a system like Shelmerdine’s.
“Once we closed due to COVID, it was, ‘Thank God we had this website already in place,’ so we could just start selling online,” she says.
Bent gets a lot of questions from other IGC owners about her site. She’s hands-on in every aspect of Shelmerdine’s web presence.
“It’s kind of my baby, to be honest with you,” she says. “I design the home page. I write the copy. I pick the colors. So it’s not an accident. A lot of hard work goes into it, and it has a consistent set of design eyes looking at it and planning it. If you want to have a strong web and brand presence, you have to be prepared to put the work into it and to be consistent with it and to invest in it too.”
It’s been a struggle to populate the online store with more and more items that are stocked in the brick-and-mortar store, but Bent believes the effort will pay off as customer behaviors change.
“Even when we are allowed to reopen, I feel that people will be more comfortable placing online orders with us,” she says. “I think that that arm of our business will remain strong now that people are used to the service.”
Shelmerdine Garden Centre set up an online form where customers can order Christmas trees, and make a few requests (i.e. skinny/wide).
A year of strong sales
Despite all the challenges, 2020 has been Shelmerdine’s strongest year yet in terms of sales. In the spring, seeds, tomato plants and anything to do with vegetable gardening was king.
“I consider this a blessing for the horticultural industry because it literally took a pandemic to get people into gardening,” she says. “It’s been there all the time, and I believe that research is showing anybody that starts gardening now intends to continue.”
In the 2020 Christmas season, greenery and poinsettias have been strong sellers. Looking at shopping trends, Bent sees customers returning to basics and the traditional comforts of home.
“ONCE WE CLOSED DUE TO COVID, IT WAS, ‘THANK GOD WE HAD THIS WEBSITE ALREADY IN PLACE,’ SO WE COULD JUST START SELLING ONLINE.” — Nicole Bent
“People can do without fancy soaps and candles, but they can’t do without their Christmas tree,” she says.
The IGC has been innovative in developing ways to keep the business rolling. Even though customers aren’t able to shop for their traditional Christmas tree like they would in a normal year, Bent set up a special order form with detailed instructions explaining the seven-step process, culminating with contactless curbside service or delivery. While it’s a little nerve-wracking to tell customers they can’t pick out their own trees this year, shoppers have been grateful that the business is still open to serve them at all. The phone has been ringing off the hook and Shelmerdine’s online form has been getting a lot of traction as well. It’s another way 2020 has been unique.
“I tell people, ‘When you get the tree home, it’s like opening a present,’” Bent says.
Shelmerdine keeps its branding unique and consistent by refusing to use stock photos.
Building a strong brand
Another factor that differentiates Shelmerdine from other IGCs is the high level of quality photography on display. Bent insisted on a “no stock photos” policy everywhere, from social media to the online store. While stock photos get the message across, they aren’t doing your brand any favors.
“They’re actually our photographs of our products, our store, our team,” she says. “And that really does help to improve your brand presence and tell a story about who you are.”
Bent says one of Shelmerdine’s keys to success is the work its owners put into building the company’s culture. That culture includes charitable donations and fundraisers to help its community and internal initiatives to support its team. Even amidst the challenges of COVID-19, Shelmerdine has taken steps to keep a positive workplace, steps rewarded by excellent staff retention.
“Our internal motto is ‘Work hard and be nice,’” Bent says. “And at the end of the day, I feel that if you do those two things, you’ve had a successful day here at Shelmerdine.”
The veggie boom
Features - Plants
As spring 2020 put fresh spins on gardening, vegetables spelled “victory” for new gardeners.
As late-winter talk about COVID victory gardens circulated the country, customers at Petitti Garden Centers’ nine Northeast Ohio locations took to vegetable gardening. While some growers marketed ‘victory gardening,’ the Northeast Ohio operation took a more direct approach.
“In terms of the actual victory garden, it wasn’t a trend that we saw people rally around. It wasn’t a huge call to action in our area,” says President AJ Petitti. But vegetable gardening itself was a different story. “We picked up about 43% on herbs and veggies compared to last year,” he shares.
New gardeners account for much of that growth. “We picked up about a 27% increase in customer traffic in terms of transactions,” Petitti says. “Clearly, I think a lot of that was driven by a lot of new gardeners. I think existing gardeners did more because they had more time, but we definitely drew a lot of new customers. They got to experience our stores and our products for the first time. And I think that’s going to carry over, hopefully for years to come.”
Across the grower-retailer’s stores, no single category of edibles or non-edibles stands out. “In terms of variety, just everything went. Demand was just huge this year,” Petitti says. “We grow 90% of what we sell, so fortunately we were able to keep planting and keep producing all along. When everybody was struggling to get product, we were able to make sure we had a continual supply.”
Petitti reports that spring annuals and vegetables both started very strong and went hand-in-hand until mid-July. As vegetables quieted down — typical for summer — other categories stepped in. “But in fall, there [was] renewed interest in cole crops and fall veggies. Obviously, that’s not as strong as what it would be in spring, but it’s still strong,” he says.
Looking to 2021, Petitti expects a strong year. “I don’t see it being as strong as it was last year, so we’re taking our initial 2020 plan and we’re bumping that up,” he says. “I think it’d be really difficult for us to see it increase off of what we saw last year. That was kind of a Cinderella year.”
He advises IGC owners to plan carefully for 2021. “I think it’s really tempting to either go way short or way over in terms of planning — whether you’re buying or whether you’re growing,” he says. “Everybody picked up new customers and there was a great interest in gardening. But I don’t know what’s going to stick, especially as families get busier again, depending on what happens to schooling and activities and all that stuff. I think 2021 is still going to be really strong, but we’re in a little bit of a bubble right now.”
The author is a Minnesota-based freelance writer specializing in the horticulture industry. Reach her at jolene@jolenehansen.com.
6 tips: HVAC Troubleshooting
Features - Production
Plan for the worst so you’re prepared when problems come up.
Although it may sound pessimistic, one constant cannabis companies must plan for is technology failures.
It’s inevitable that something will go wrong when working with live plants, multiple inputs and various technologies to keep them thriving, says Jim Mitchell, an industry consultant. And rather than viewing it as pessimistic, he frames it differently: Planning to fail means you’re prepared and are more likely to survive whatever crisis comes up.
“We often forget about how things fail, but they will. Everything fails at some point in its life,” Mitchell says. “The question is, will it take out your company if it does?”
Among the most important systems in cannabis cultivation are those that regulate heating, ventilation and air conditioning, and related controls. CBT asked three industry experts about the most common problems they see with managing HVAC in cannabis cultivation, troubleshooting tips and what prevention strategies can help stave off trouble in the first place.
Andrew Lange, president, Ascendant Management
Problem: Inability to hit humidity control targets
Possible Solution: Check your sensor locations and move them within the plant canopy.
“A common issue I see is people are unable to hit humidity targets, even when dehumidification equipment is properly sized, because their sensors are in incorrect locations,” Lange says. Some cultivators mount sensors on the walls surrounding the canopy, but that can be several feet away from the actual cannabis, and the readings may not represent the climate the plants are actually experiencing. To check this, use a handheld humidity meter and check at the canopy level and where the sensor is currently mounted and compare, Lange says.
“My suggestion is to mount your sensors in the canopy where you want the actual readings, right next to the plants,” he says. He suggests suspending the sensors from the ceiling using a chain and adjusting the device as the plants grow, targeting either right at the top of the canopy or as close to the top of the canopy as possible. Another solution is to affix the meter on a post that again can be raised as plants grow. “Have your grow team move it up to where it needs to be inside the canopy; that gives you your most accurate reading each time.”
Problem: Thermal stratification
Possible Solution: Add ceiling-mounted fans to get vertical air movement.
“Destratification of air is incredibly important, and it’s something that often gets overlooked,” Lange says. “[The] vertical air movement, where we are moving air up from the floor and pushing it up against the ceiling, does two things: one, it elevates CO2 for us and helps bring that CO2 off the floor where it’s not being used, and [two,] it helps reduce hot spots in the room.” This helps equalize temperatures and bring CO2 up to where it can be used in the canopy.
Dr. Nadia Sabeh, Ph.d., president, Dr. Greenhouse
Problem: Condensation on the walls
Possible Solutions: Check the building envelope for cracks or holes, and seal them; create buffers around entrances into the production area.
Gaps, holes, cracks and other building infiltration issues can lead to climate management control problems, no matter how good your equipment and technology are, Sabeh says. If there are humidity control issues, one place she typically looks first is the ceiling or roof to check for holes or cracks causing outside air to come in. One problematic area is around ductwork, she says.
“What’s causing the humidity control issues? Well, they didn’t seal up the hole that the duct is coming through on the roof, and so it’s really cold here on the ceiling in the winter,” Sabeh says. “And so it’s not necessarily that rain is coming through, but because of that cold temperature up at the roof or if it’s a ceiling, you have this humid room and it's condensing. And then they seal it up, and it’s all good.” Sabeh says an infrared camera can reveal pockets of cool and hot air in a room to help find gaps that are not easily seen.
Another place outside air can travel in is from entrances or delivery areas where there are no dividers between the outside and the production space. “It could even be as simple as an air curtain, but there needs to be something that creates a separation because when you open that door, you lose control of that interior space,” Sabeh says. “So you want to create some sort of buffer.” Another way to prevent control issues is to not allow deliveries directly into the production area.
Problem: HVAC equipment cycles off automatically, causing fluctuations in temperature and humidity.
Possible Solutions: Fix communication between sensors and automation system; check manufacturer for instructions on use; check system size; invest in more sensors.
“We have one project now, and they can’t figure out why the equipment cycles on and off every 90 minutes. And you can just see these spikes, and for five minutes, the equipment is off. I find that a lot of the troubleshooting issues around HVAC is about control,” Sabeh says. “This is really an area that needs more attention.”
When equipment cycles off and on, Sabeh says one potential reason is that the HVAC system is too large for the space. “The classic case of oversized equipment is that it cycles on and off, which not only causes wear and tear on the equipment, but you’re going to see a bunch of fluctuations in temperature and humidity as that unit is turning off and on.” Humidity control issues also can be a sign of undersized equipment, she says. Often problems stem from a lack of training on how to use the equipment, however. Sabeh recommends working with suppliers that will provide information and training at the outset.
Another area to check is sensors; it might be that there are not enough sensors to provide accurate information to the environmental control systems. Although it can be expensive, Sabeh says, investing in sensors and monitoring systems that track and store historical data is essential to successfully troubleshooting HVAC problems.
“The more data, the better,” Sabeh says. “Same with sensors. It’s always that sensor you wish you had.”
Jim Mitchell, industry consultant
Problem: Unprepared for component or system failures
Possible Solution: Keep backup equipment on hand and test it; implement a “redundancy strategy.”
Mitchell says that cultivators often store extra HVAC parts so they can replace primary components quickly or switch to backup units, but it’s also important to test backup equipment, include components as part of a regular maintenance program and replace parts regularly.
“You don’t want a surprise when your primary goes down and you go to your backup and no one has checked it,” Mitchell says, adding that the same goes for filtration systems, coils, fan belts, motors, and other key parts.
But, what if the electricity that powers the HVAC system fails?
In his experience as a consultant to cannabis cultivators, he’s seen the worst happen due to factors out of the company’s control, like power outages or, in one particularly unlucky case, when a natural gas supplier in Michigan had an equipment failure at its plant, shutting down systems for multiple hours in the middle of February.
“I’ve consulted with quite a few companies on how to kind of harden their HVAC system, having the backup generator is critical but so is having backup fuel for the backup generator,” he says. “It’s just a matter of going through that list of things that are critical to your operation and saying, ‘well, where do we need to have this layer of redundancy or backup that goes into it?’”
Mitchell says planning for a cultivation crisis is similar to fire drill training — what is the rescue plan if there is a catastrophic situation in your growing operation?
Developing contracts and relationships with suppliers to provide “rescue units” that supply inputs like heat, water or air conditioning is key, he says.
“Those are all critical to the life of the plant,” Mitchell says, and the electricity or water lines that supply those inputs also come into play. “So ... identify [what’s critical to the life of the plant], and rank them as to how important they are on a scale of one to 10.”
Problem: System warnings don’t seem to match up with conditions in room.
Possible Solution: Check labels and wiring when systems are installed.
“You have to make sure your control system is set up and was installed correctly,” Mitchell says. Because of crossed wires, pipes or mislabeled controls, he’s seen situations where alarms are indicating a problem in one flowering room where the issue is actually occurring in the other. “I can’t stress enough [the importance of] conditioning your system when it’s brand new and going over everything with a fine-tooth comb one at a time to make sure that all your systems are installed correctly and are working to specifications.”
This article originally ran in Cannabis Business Times.
Greenhouse hemp: Success hinges on genetics
Features - Plants
Perhaps just as crucial as setting up the perfect growing conditions in your greenhouse, selecting the proper cultivars can often be the difference between a good or a bad experience with hemp crops.
Hemp Solutions Minnesota produced 40 tons of dried CBD and CBG flower and biomass across indoor, outdoor, and greenhouse production systems in 2020.
Photos Courtesy of Hemp Solutions Minnesota
Greenhouse hemp producers find themselves grappling with one of the most important decisions for any commercial cannabis operation: selecting the proper strains, or cultivars to produce each season.
Unlike ornamental production – where the thousands of certified varieties of annuals and perennials have been researched and trialed and genetically selected by professional breeders for decades now — commercial hemp genetics are still underdeveloped compared to the major agronomic crops.
With that in mind, there are a multitude of factors to consider when making your hemp genetics purchasing decisions.
Production pioneer
One of the first commercial hemp licensees to legally produce a crop in the Land of 10,000 Lakes, Hemp Service of Minnesota CEO Paul Frank has monitored developments on the genetics side of the hemp industry since its inception. His state-wide cultivation network produced six strains of hemp during the 2020 season, most of which was for smokable hemp flower or extracted products.
The group also propagated six different cultivars of hemp clones to certified operations across the country.
“One of the most important aspects is knowing that the strains we grow are optimized for our geography,” Frank says. “If they were bred and worked well in places like Washington, Oregon and Montana, then they should work in our greenhouses and fields, too.”
Frank advocates growers devote ample attention to each offering’s Certificates of Analysis (CoAs).
Specifically, he advises fellow growers to check dates. Seed lot testing dates within 12 months (since seed germination rates tend to degrade after a year in storage) are considered current, he says.
“And you have to also be certain that you trust the data — where the variety was developed, and what lab did the testing,” Frank says.
Once a buyer has zeroed in on a genetics provider that is trustworthy, the process of further evaluating that growers’ genetic offerings begins. Now, strain characteristics like cannabinoid and terpene levels are factored into the selection process.
“Lot purity and germination rate are also very important, as well as making sure you understand the varieties’ parent genetics (which two strains were bred together, or crossed, to make each cultivar),” Frank says.
Obtaining recent Certificates of Analysis before purchasing a large lot of hemp seed is an important step in the genetics purchasing process.
Engage local experts
Growing hemp in a 12.5-acre commercial greenhouse alongside blocks of pesticide-free leafy greens and lettuce in upstate New York’s Niagara County, Wheatfield Farms owner-operator Paal Elfstrom made the move to incorporate hemp crops into the greenhouse back in 2017.
The former pharmaceutical industry rep says he has learned a lot about what makes a good commercial greenhouse hemp variety.
“Genetic stability, plant uniformity and vigor, these are typical plant characteristics that any greenhouse grower, whether it’s for perennials or cannabis, is seeking out,” Elfstrom says. “We also look for the proper flower to leaf ratios, since we’re trying to grow the highest amounts of cannabinoids.”
Like his counterpart up in Minnesota, Elfstrom stresses the importance of going over CoA documents with a fine-toothed comb. “We’re really focusing on the terpene and cannabinoid [levels], it’s kind of what I like to call a ‘CoA-focused selection process,’” he says. “I compare it to how a controlled environment strawberry grower is looking for the right combination of flavor and sugar content."
Wheatfield Farms has found value in partnering with Cornell University, where Dr. Larry Smart and his team of horticulture researchers are turning out research findings on all aspects of commercial hemp production in the Empire State.
“I would encourage anyone interested in growing hemp reach out to the local cooperative system and the Land Grant researchers in your area,” Elfstrom says.
Land Grant weighs in
Speaking of academia, Nicholas Kaczmar is a research support specialist within the Horticulture Department at Cornell University. Kaczmar and his team study various commercial hemp production systems.
“Commercial growers are looking for robust resistance to fungal pathogens like powdery mildew and botrytis, mostly because there just aren’t many products labeled for use in hemp or cannabis,” Kaczmar says. “It also helps minimize spray applications throughout the year.”
Otherwise, Kaczmar advises growers to factor in how they intend to grow the crop and which market they are hoping to produce for during the genetic selection process.
“If you’re growing smokable flower you will want a variety with larger main flowers and colas, which are more marketable than the smaller, airy ones that are ideal for extraction,” he says. “And some of these early maturing, auto flowering varieties are really interesting because you can have a harvest every two or three weeks.”
Kaczmar says growers should also ensure any genetics they invest in are total THC-compliant. “Make sure your THC levels are low enough that you’re not always worried about the hemp going hot (over 0.3% THC content),” he says. “It’s looking like the new USDA regulations will be based on total THC compliance, so I’d recommend looking at total THC content (vs. delta9 THC levels), especially if you’re looking for lines of production that you can move forward with beyond this season.”
And, last but certainly not least, is hunting out unique phenotypes in your hemp genetics, Kaczmar says.
“Unique colors like purple and pinks are really popular with consumers right now,” he says, noting the relative infancy that hemp and cannabis breeding programs are currently in.
“There’s still a lot of work to be done, no doubt.”
Tactical economics
Features - Cover Story
Green industry experts weigh in on the 2020 sales boom, predictions for the coming year and what it all means for growers in terms of operational spending.
The green industry is coming off a hot streak as we kick off the new year. Operations across North America, save for a few regions where lockdowns didn’t exempt greenhouse growers, saw historically positive sales volumes last spring, stretching into summer and fall.
Now that the wild and seemingly never-ending 2020 is firmly in the rearview, many horticulture operations that are flush with cash find themselves at somewhat of a fork in the road: is it wise to take advantage of grower-friendly finance rates and invest in expanding production to meet the new demand we saw in 2019? Or should they pay down debt and prepare for the possibility of yet another economic downturn? Hold market share and keep on keepin’ on, hoping for better days ahead?
Of course, many believe that any decision in this regard should strongly consider that the virus appears likely to stick around with us at the very least through yet another spring production season.
So, is 2021 the year for growers to make some big moves? Build that shiny new Dutch double-gutter expansion, or snap up that new environmental controller you have been eyeing?
Let us see what some experts in the industry have to say on the subject:
2020: outlier or new normal?
Mintel is a well-known market research firm that has been tracking and reporting on all kinds of consumer trends throughout the COVID-19 pandemic. The group conducted green industry focused research this summer, finding that 84% of American consumers are spending the same or more time in the garden than before the pandemic, and 10% have increased plant purchases from the year prior.
Purdue University’s Ariana Torres, an associate professor in the school’s ag economics department, warns not to read too deeply into those numbers, however.
“We believe that this is more due to a regional-specific effect, and we are finding evidence that non-essential shopping (including plants) has actually decreased. Consumers are feeling less confident about the growth of the economy going forward,” she says.
That said, Torres is seeing a significant shift in how people acquire plants, and greenhouse operations are also looking for new customers and markets.
“Data from the [Mintel] tracker also shows that 36% of plant purchasers are buying more online. One way growers can address new and complex industry trends is to aim direct sales as much as possible,” Torres says. “Today you’re seeing that happen with many growers that previously were only selling wholesale now trying to bypass the traditional brick-and-mortar retail route to market by selling to consumers online.”
Torres says that since March, a bunch of new businesses have sprung up as a response to the online demand to deliver plants, flowers and other green products directly to consumers. In the greenhouse world, this is especially true with the proliferation of delivery and curbside services.
“And retailers that were not traditionally plant-purchasers (e.g. Aldi) have agreed to support farmers and local centers and channel their products through this retail market,” she says. “Using social media marketing and other types of digital marketing can help businesses reach local customers in a cost-efficient way, often without a large up-front capital investment.”
Associate Professor Ben Campbell lectures on applied economics at the University of Georgia’s Department of Agriculture. Campbell himself advocates a restrained approach when it comes to the long-term investment and expansion question going into 2021. His own market research in 2020 revealed a mere 4% increase in consumer spending on plants compared to 2018 levels.
“I myself am a very risk-adverse person, and there are just too many uncertainties right now with coronavirus and what will happen with consumer buying next year,” he says. “There’s some optimism about a vaccine, but the odds of all of us having received it by spring 2021 are not great. Right now, I just don’t think we’ll see the same plant-buying boom that we saw in 2020.”
Campbell foresees more people returning to their normal office work routines, and more unemployed workers without the same unemployment compensation safety net they had in 2020, contributing to a return to pre-pandemic plant demand. Or possibly even lower levels of demand.
“Unless you have a local market already setup, and the demand is there and it is firm and stable, I would be very concerned about how 2021 is going to go from a sales standpoint, and I’d want to watch what I am doing as far as expanding,” he says. “We’re probably not going to have 2020 happen again in 2021, at least not anywhere near the size or scale that we saw. And if everyone expands their operations at the same time, we’ve seen in the past that can have a compressing effect on prices, and then demand likely will go down. That’s a big double whammy.”
Texas A&M University Professor and Ellison Chair Charlie Hall does not envision 2020 sales levels becoming the new normal in horticulture, either.
“Are all of the ‘newbies’ going to come back for a second helping of this whole lawn and garden thing?” Hall wonders. “A big part of that is whether they were successful or not with their plants. If they were successful, then sure, maybe. At the same time, it’s not like I’d be building 50 acres of greenhouses right now expecting this giant tidal wave of demand to be there.”
Hall bases that analysis on preliminary data from independent garden center pre-bookings for the upcoming spring season.
“Right now, including the lawn and landscaping side of the industry, it’s looking like we’ll probably see something in the neighborhood of about a 10% bump in demand from pre-pandemic levels,” he says.
Economists across the board are sounding alarm bells on what businesses can and should expect to happen in 2021. Federal Reserve Chairman Jerome Powell recently cautioned that the economy is likely to shrink substantially across both the first and second quarters of the new year, with unemployment projected to increase up to near the 10% mark.
As of press time in mid-December, congressional passage of a new stimulus package had just been passed to help boost consumer spending. President-elect Joe Biden’s transition team has reportedly also been warned of the potential for a particularly devastating “double-dip” recession.
This would almost certainly have devastating consequences for the green industry. Generally, when consumers lack confidence in the economy, they save money and pay down debt while decreasing discretionary spending on goods and services until the economy recovers, or a stimulus is disbursed.
One of Hall’s many fortes is analyzing consumer spending trends and making sense of what those trends mean for the green industry, and more specifically, for growers themselves. Looking at the data of late, Hall is seeing a near future featuring less consumer spending on things like plants and flowers and trees.
“As we go through this pandemic, it is important for business owners to find technologies that reduce labor needs."
“Durable goods purchases have been extremely strong (during the pandemic) and consumers are still spending money on durable goods, some of which we attribute to the last stimulus payments putting a little extra cash in people’s pockets,” Hall says. “In most recessions we do see a bump in flower and other plant sales early on in the recession, but once the recovery starts consumers start spending more on durable goods, and there’s less to spend on flowers. It seems like that’s where we’re headed right now.”
For her part, Torres agrees that we will likely see a drop in consumer disposable income outlay during this second wave of the pandemic.
“Over time we will likely hit a demand-supply equilibrium, and it is better for growers to behave conservatively by paying off their debt with the highest interest, investing in cost efficient equipment, automating activities and processes, and reducing costs and increasing efficiency,” she adds.
Even with Americans’ discretionary fund spends likely to decrease in the short term, there are a couple positive developments that Torres thinks could help soften whatever blow the industry ends up absorbing.
“Plant demand from the Baby Boomers is increasing, and this segment of the population has spending power and is prioritizing local purchases and purchasing online,” she says. “And private home improvements continue to increase due to the fact that Americans are spending more time at home and prioritizing quality of life and gardening more.”
Torres also believes a strong and only growing stronger real estate market will continue to prop up demand for plants and new landscape features, benefiting garden centers and growers alike.
Long before anyone knew what the coronavirus even was, the green industries’ labor situation has long been singled out as the top constraining factor for growers looking to scale up.
“If you expand production and invest in new structures, then you’re going to need that much more labor,” Campbell says. “But the question still remains for many growers: Can you get it?”
The ag labor pool was essentially taking hits from all sides in 2020. Global travel restrictions made a very competitive immigrant labor pool that much tougher to maneuver, and laid off domestic laborers largely stayed home and collected the controversial $600 per week Pandemic Unemployment Assistance (PUA) payments rather than take lower-paying, manual labor intensive positions in farming.
“If you expand production and invest in new structures then you’re going to need that much more labor.”
These developments are only going to continue to exacerbate, according to Torres.
“Labor issues are becoming larger due to the pandemic,” she says. “Labor is one of the most important and expensive inputs for industry businesses, and it promises to remain a major worry due to lack of mobility, government unemployment payments, and immigration issues.”
Therefore Torres, while reminding growers to be smart and conservative and analyze any investments accordingly, does advocate they take a close look at adding automation technologies where they fit.
“As we go through this pandemic, it is important for business owners to find technologies that reduce labor needs,” she says. “Automation of activities, tools and technologies that improve the quality of products and services, and new processes that can spread or reduce the need for labor, should be prioritized.”
There are many factors to consider before choosing a path forward for 2021. Strive for diligence in your pre-planning meetings and leave no stone unturned.
All three green industry economic experts we consulted independently offered growers the same advice: a conservative approach today could actually be more beneficial in the long run, versus a frenzied plan to expand in the immediate short-term.
“Having a conservative approach with the recently experienced liquidity can pay off later on,” Torres says. “And it appears that the best route forward today involves investing in economically feasible technologies that promote automation, and most importantly reaching out to consumers directly through online sales and uncovering new or non-traditional markets.”
She also believes growers should “prioritize cash flow health in the long-term” while trying to diversify their offerings into new or emerging crop markets like indoor strawberry production, or hyper-local vertical produce farming.
Campbell recommends much of the same risk-adverse go-forward plan as Torres, and he is keeping a keen eye on developments with the new administration coming into office.
“There is a lot of research and data out there that shows the economy tends to slow down coming out of an election, and when people are uncertain and don’t know what to expect from a new administration, they save rather than spend,” he says, noting that we don’t know what a Biden administration means for trade tariffs or input prices.
Perhaps the industries’ foremost voice on economic analysis and issues, Hall cautions growers not to get complacent and contented after many had their finest spring sales seasons in decades.
“Make sure you’re lean and make sure you’re efficient in everything you do,” he says.
“If another downturn is coming then I will generally tell people to defer large capital expenditures, defer maintenance expenses as much as they can, forget paying dividends and pay your suppliers within terms, meaning if you have 60 or 90 days to pay off a balance, then go ahead and take it. You do not have to pay everything off within 10 days.
“And making full use of any available lines of credit,” he says. “Is usually a good strategy, especially considering that during the last great depression if growers didn’t use those lines of credit the banks clawed those limits and rates back from them.”
Bottom line
The path ahead for the next few miles seems unclear at the present time. Perhaps there are more good times on the horizon, yet the prospect of more danger could lie just ahead. However you decide to play your hand in 2021, like any seasoned gambler, be sure to do your homework first.