Market / Industry Analysis

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Market / Industry Analysis
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Green Industry Market Structure
Households
Input Sector
Landscape Services/ Contractors
Nursery Products Bedding Plants Potted
Plants Foliage Cut Flowers Greenhouse
Nursery Products
Mass Merchandisers
Wholesale Market/ Florists
Commercial/ Industrial
Retail Nurseries Garden Centers
Government
Retail Florists
The Changing structure of the U.S. Green
Industry Factors and Influencing Opportunities
and Issues Surendra P. Singh. Journal of
International Food and Agribusiness Management
(Vol. 10 (12) 1999)
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Size of Industry Retail Garden Center/Green
Goods   Encyclopedia of American Industry
(NGS) Ø 1995 - 25.9 Billion over previous 5
years sales up about 10 percent annually   Ø In
1996 approximately 12,000 establishments operated
retail nurseries and garden stores majority
being small establishments.
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Size of Industry Retail Garden Center/Green
Goods Ag Outlook 1999 - (USDAS/ERS) Ø 1998 -
38 Billion (141 per capita) for environmental
horticulture (trees, shrubs, bedding plants,
garden plants, turf) 16 Billion (61 per
capita) for floriculture (cut flowers and greens,
potted flowering and foliage plants) for a total
of 54 Billion (202 per capita).
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Size of Industry Retail Garden Center/Green
Goods National Gardening Survey 1998-99 Ø 1998 -
30.19 Billion - double digit percentage increase
in sales last two years.   Ø 65 of all
households (67 million households) participate in
some lawn or garden activity down 1 from 1997.
  Ø High in participation was 1994 with 74 (72
million) low of 65 million in 1996.
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Size of Industry Retail Garden Center/Green
Goods Nursery Retailer 2000 Ø 1995 - 67.2
Billion Ø 1998 -79.1 Billion Ø 1999 -81.7
Billion with Green goods sales at 21.7
Billion Accessories sales of 5.8 Billion 2000
Projection - 85.8 Billion
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Size of Industry Retail Garden Center/Green
Goods Nursery Retailer 1997 In 1996, reported
8,600 Lawn Garden store establishments, total
of 53,800 selling LG product lines
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Size of Industry Retail Garden Center/Green
Goods Census of Retail Trade 1997 US 1997 of
establishments 10,908 1992 of
establishments 10,857 Ohio 1997 of
establishments 545 1992 of establishments
560
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Consumers
Encyclopedia of American Business Ø 1995 74 of
households participated in garden activities of
some kind 72 million households Ø On average
342 per household spent on lawn and garden Ø
Customer Profile College educated,
business/professionals or retirees, Household
income 30,000, Midwest or West, 50 years or
older, Married no children at home.
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Journal of International Food and Agribusiness
Management Ø 1986 - 39 per capita on cut
flowers, greens, indoor plants Ø 1995 - 54
(same) Ø 1994 - 119 per capita spend on outdoor
landscape flowers plants Ø The aging of our
population overtime brings larger populations to
the 35-64 age range perhaps more retirees will
be targets. Healthier, with more disposable
income, increased purchasing power. of family
and household units more important that straight
population numbers
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17 Million in One Store The profile of our
customer is well known to us. That makes buying
easier and more difficult . Suffice it to say,
if they arent high level goods, dont bring it
in the store.
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National Gardening Survey 1998-99 Ø 1998
Average per participating household expenditure
on lawn garden activities was 452 - Up 17
from 385 in 1997.
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National Gardening Survey 1998-99 Ø
Participation in lawn and garden activities was
the highest for Women, (however dollars spent
Men were higher) Households 30 years and older,
College educated households (high school also
high), people in manual labor, professional,
retirees, and business (respectively), Married
households, Households 40,000 (big category
30-39K substantial too), households in South,
West and Midwest.
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Competition
Encyclopedia of American Business Ø 1996
12,000 establishment operated nursery garden
stores. Ø Majority were small businesses with 7
employees. Larger businesses average 12
employees. Ø About 16 of the nursery garden
stores are multi-unit businesses. Small companies
have competed against well-stocked chain stores
by narrowing their focus and meeting more
specialized needs of the consumer.
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Nursery Retailer 2000

• There is a continuing shift to the hardware
  sector
• (Lowes and Home Depot)
• Proj. 38.3
• Most at cost to the warehouse, club and general
  chain stores
• Proj. 29.9
• Garden centers, nurseries and farm stores are
  holding steady
• Proj. 31.8

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National Gardening Survey 1998-99 Consumers
reported using at least 2 different types of
retail outlets   Outlet Type 1998
Household change
Garden Centers 2 million -3 Hardware
Stores 16 million -20 Mass merchandiser 21
million 0 Feed/Seed supply 11
million -8.3 Supermarket/Drug 8
million -20 Home Centers 29 million 7.4 Mail
Order 8 million 14.2
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Channel of distribution Ø 1998green goods has
88 of goods one-step channel
Supplier to Retailer. Accessories often have
two-step channel Supplier to Distributor
to Retailer.
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Products
Nursery Retailer 2000 Ø Green goods DRIVE sales
in other categories. Ø Accessories sales
increased at greater in 1998 than other
categories. Becoming a major profit center.
Ø Water features now its own sub-category has
grown to 638 million in sales Biotech and
micropropogation benefiting the small
businesses to hit niche with new products.
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Green Goods Product list according to
sales   Product of Sales Evergreens 37.2 Beddin
g/ground plants 18.8 Shrubs flowering
trees 17.2 Flowering plants 12.2 Fruit nut
trees 7.4 Foliage 4.4 Bulbs 2.6
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National Gardening survey 1998-99   of
Participating change in Product
Households Hshld spending
Lawn care 49 mil 30.1 Flower garden 40
mil 13.3 Indoor plants 30 mil 15.0 Shrub
care 26 mil 34.0 Veg garden 25 mil 1.2 Insect
control 23 mil 18.5 Landscaping 23
mil 15.4 Flower bulbs 22 mil 10.0
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National Gardening survey 1998-99   of
Participating change in Product
Households Hshld spending
Tree care 19 mil 13.3 Fruit trees 10
mil -2.0 Container garden 11 mil 54.9 Grow
berries 5 mil 56.2 Ornamental garden 5
mil 73.9 Herb garden 7 mil 0 Water
garden 4 mil 63.3
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• Encyclopedia of American Businesses
• Ø Changes to more bedding plants
• Ø Consumers doing Nature-like gardens
• More environmentally conscious

Wall Street Journal Ø Some movement away from
perennials and to annuals.
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Trends
Encyclopedia of American Business Ø Phenomenal
growth in the industry in 1980s and 1990s
much of this is linked to change in demographics
and increased population in the age and income
group to purchase.
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Ø 2 major changes 1)Increase in multi-unit
chains with large selection and computerized
inventories   2)Increased supply segmentation
specializing in a narrow focus and not
competing head to head with multi-units
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MSU Extension Pub Retailers have noted
changes 1.              Increasing need for ease
and convenience of shopping       (parking,
hours, layout, checkout, signage,
variety) 2.              Increasing competition
and category killers 3.              Increasing
competition for good employees 4. Increasing
desire to enhance shopping experience entertain
fun atmosphere
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National Gardening Survey 1998-99 Ø Product
segments with largest sales increase were lawn
care (already the largest product category),
flower gardening (third largest category), insect
control, ornamental gardening, container
gardening, and landscaping.   Ø An increase in
average spending per household was realized in
each category EXCEPT fruit trees, herb
gardening and raising transplants.
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Industry Seasonality
1987 HRI Operating Cost Study Month of Sales
January 0.7 February 0.7 March 4.1 April 14.7 May
29.1 June 12.8 July 6.3 August 5.1 September 6.7 O
ctober 6.3 November 4.9 December 7.7
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Product Lines   Product Lines of Sales Green
goods 57.4 Florist Gift Dept 7.2 Christmas
Items 7.1 Hard Goods 24.6 Landscape
Maintenance 6.7 Other Retail 3.5