The challenges of COVID continue to force the green industry to be quick on its feet, and the effects are going to be long-lasting, according to Dr. Charlie Hall, Ellison Chair in International Floriculture at Texas A&M. “COVID has forced us to be better business managers across the board whether you’re a grower or a landscape service provider or a retailer,” he said during a Garden Centres Canada Speaker Series presentation. “We are not going to waste that crisis.”

The shape of recovery is going to follow the shape of COVID, Hall said, especially as the Delta variant affects reopening plans in both the U.S. and Canada.

Supply chain

The rising price of moving material through the supply chain plus the increased time is causing problems throughout the green industry. From problems finding labor for production and manufacturing to a severe driver shortage, the supply chain problems won’t be going away anytime soon. The U.S. was about 46,000 drivers short at the time of publication due to high retirement levels, driving school closures during COVID and problems matching up team drivers for freight due to vaccination status. All of this is contributing to the increased truck rates.

“All of this pressure is going to continue until at least 2022,” Hall said. “It just simply can’t get better fast enough.”

Hall said this may provide some room for niche players, and the demand for local or regional products will increase. “It’s going to cost a lot of money to build the supply chain domestically to handle a portion of that demand.”

So, Hall expects to see a bullwhip effect on inventory. “We’ve seen that in every recent economic downturn,” he said. The labor shortage doesn’t seem to be letting up any time soon either. Along with the pandemic has come what many are calling The Great Resignation. More than 30% of people are not planning to go back to the same level of work they were doing 18 months ago, Hall said.

“People are re-evaluating their hour-long commute or working in the service industry,” he said. “They’re looking at their alternatives in terms of job placement.”

Costs across the board

Production costs increased dramatically as freight became more expensive and material prices rose. Container costs, for example, are 43.5% more expensive now than they were pre-Recession in 2007. Overall, the cost of inputs at the grower level has increased 13-14%, which means prices will need to raise at least the same amount, or growers are going to lose margin.

Since growers are going to need to increase prices, retailers will need to raise their prices accordingly.

“Also, consider that demand is really increasing,” Hall said. “Retailers aren’t getting a lot of pushback on the price increases they’ve already done. How much is going to be too much before you get pushback from the end consumer?”

Gross sales for garden centers are up 23.4% through August, according to Hall’s numbers but the jury is still out on the rest of the year. While sales from January through May of 2021 were much higher than last year, June numbers were significantly lower and July was about even.

Retailers saw increased online sales along with higher traffic and spending per transaction. But input prices have gone up for both plants and hard goods. Due to supply chain issues, substitution became more normal, and IGCs are buying ahead and stocking up where they can to fill demand, Hall said.

Another change that’s here to stay is contactless shopping. “Make no doubt, the consumer likes it,” Hall said. “You see it at the grocery store level and the garden centers that offered that, they’re going to keep doing that.”

2022 and beyond

Hall predicts a pent-up demand in 2023 as people get more comfortable hosting events, which could lead to increased lawn and garden spending.

He’s also expecting to see more mergers and acquisitions.

“There’s strong demand and higher margins so here come the venture capitalists,” he said. “And most of the time, that hasn’t been necessarily beneficial for our industry.”

Little known fact: I volunteer weekly as a keeper aide at the Dallas Zoo, which has animal conservation at the center of its mission. Every Wednesday morning, I get up at the crack of dawn, make a tumbler of extra-strength coffee, and make my way to the flamingo habitat at the zoo. There, I spend about half a day cleaning the flamingo pond (also inhabited by several duck species, a family of southern screamers and cranes), helping with the care of the birds, and quite a bit of intensive gardening. The habitat, one of the very few where a volunteer gets to work inside with the animals, is a huge sunken garden, so it needs plenty of horticultural tending. This volunteer work isn’t just for the birds; it’s a wonderful way to exercise all of my business-owner demons each week, not to mention a good arm workout. I do a lot of scrubbing.

For the birds

Why am I telling you this? Because birding just happened to be one of the hobbies that — along with gardening and indoor plant keeping — exploded during the pandemic. I’ve always been fascinated by all creatures, including birds, and spend lots of time enjoying the birds who visit my garden. A few years ago, I invested in a fancy pair of binoculars so I could better birdwatch from my kayak or when hiking. And really, who hasn’t wanted to take on their own “Big Year” after watching that gem of a movie? Perhaps that’s why my husband hid the binoculars ...

Anyhow, there’s no denying that backyards and birds go together like, as Forrest Gump would say, peas and carrots. Sequestered at home for so long, many of us turned to our backyards for solace and nature watching. We couldn’t go on all those trips we had planned, so we started putting out a record number of bird feeders and planting more wildlife-friendly plants, hoping to coax nature to come to us. Birding mania also seems to be surviving the pandemic, much like the increased interest in gardening and houseplants, which is good news for any green industry business that sells bird-friendly plants and products.

Balcony birding

Now, balcony gardening is also seeing a big trend boost, but I think we as an industry sort of leave apartment dwellers out when it comes to bird gardening and watching. I’ve personally helped a friend set up her balcony plantings and feeders specifically to encourage hummingbirds to visit her. Lest customers think they must have an expansive residential property with an on-trend stylish prairie style wildscape to attract and enjoy birds. Add several planters with environment-appropriate bird-friendly plants and a feeder or two, even a small birdbath to a balcony or small patio, and you can carve out your own postage stamp version of a bird-friendly garden.

Green gets real

Conservation is another issue winding its way toward the forefront of the collective gardening consumer consciousness. Mostly, I see an interest in conservation coming from two fronts: First, the increase in birding. Second, from the awareness of plant poaching within the rare houseplant community.

Sadly, I recently saw the alert about the ivory-billed woodpecker, along with 23 other species in the U.S., designated as extinct. The list includes 11 bird species, eight freshwater mussels, two fish species and a plant species in the mint family. Speaking of plants, one in five of the world’s plants are now at risk of extinction.

I suspect plant conservation will become much more central to gardening consumerism. Conservation, of course, opens the door to delve deeper into native or adapted non-invasive species that support local wildlife.

As growers and garden centers, it’s an easy and natural fit to weave together a central theme of letting nature nurture you whilst supporting wildlife and conservation, whether it’s outdoors or inside.

Everyone’s an expert

Creator culture is one of the more in-your-face trends happening in the horticulture industry, at least if you’re paying attention to social media, Etsy and all of those new amateur-run plant shops popping up. Plant enthusiasts and influencers are creating most of the content these days that our gardening customers are using to make buying decisions. So, you’d either better figure out a way to compete in that space with your own content that strikes the right aesthetic and educational vibe; or you’d better hitch your wagon to an enthusiast who is already doing it, if for no other reason than to make sure that correct technical information makes it to your customers through all the anecdotal hobbyist rhetoric.

Good thing is, pretty much everything we do in the horticulture industry supports a creative lifestyle and aesthetic, which is why I think so many new enthusiasts have been inspired to create their own plant-related content and businesses. And, most new plant enthusiasts are hungry for new knowledge and a deeper understanding of how plants work — and have a growing appreciation for their value.

Luckily, this is a “we all rise together” scenario if we are savvy and respect our customers’ intelligence enough to go deeper with them in terms of education.

Plant tribalism

The creator culture is also part of what has driven a sort of plant tribalism amongst enthusiasts. This has made community and identity much more important in gardening and indoor plant hobbies. Enthusiasts aren’t only looking for a particular plant or product; they are looking for acceptance, validation and connection within the plant community. I predict a resurgence in the popularity of old-school plant and gardening societies, which will manifest anew in the digital online world.

Let nature nurture you

The gardening world is different now than it was a year or more ago. The simplest observation I can offer is that hobbies we once nurtured are now doing the nurturing in return. What once felt like a luxury pastime now feels a necessity for many.

We’re all desperate to be nurtured, given the stresses of the last couple of years, and we seem to be leaning on nature — as we always do — to nurture us. This is why if you’re looking for me these days, you just might find me hanging out with the baby flamingos.

SCHULTZ GARDEN CENTER

Glenville, New York

FOR SCHULTZ GARDEN CENTER, the tradition of growing plants dates back to 1892. Vegetables were the starting point, but ornamentals followed early on. “We gradually just kept transitioning — less and less farming and more and more greenhouses and ornamental production,” says Matthew Schultz, manager.

Today the grower-retailer has 80,000 square feet of greenhouse space and grows 99% of the plants they sell. All plants go to retail customers. “We never have and don’t currently have any desire to wholesale,” Schultz says.

A few years before the pandemic, the IGC began increasing the diversity of its offerings along with volume. The focus expanded from industry standards to embrace more houseplants and other trending items. Then COVID hit.

“Everything under the sun has been selling. With that, we’ve been able to continue expanding and finding new areas,” Schultz says. They now grow nearly 1,000 plant varieties. As a grower, his primary challenge has been finding wholesalers with availability when Schultz stock sells out.

The IGC’s motivation for growing remains unchanged. “The big reason we’ve always grown our own stuff is just being able to control the quality. We’re very big on providing the best quality plants for our customers,” he says. “We feel that the best way to do that is to grow our own stuff right here on site.”

Schultz believes starting plants from seed or plugs has cost advantages as well. “We have enough experience from the years of doing this that we’ve been able to really control our costs and keep it down,” Schultz says. The family-owned and -operated IGC has a staff of five — all family members — and no seasonal help.

But growing your own has risks. “We are our own supplier. So, if anything were to happen to a greenhouse or whatever, we’re in a bit of trouble,” Schultz says. “We have not had that happen yet, thankfully, but there is always that risk.”

The family doesn’t have immediate expansion plans, but they’re considering a new greenhouse. The IGC’s increased sales for 2020 and 2021 — between 30% and 40% over previous years — would fund expansion and other potential projects. Schultz expects 2022 sales to stabilize but to hit a level higher than 2019 still.

As the youngest family member, fresh out of college with an MBA, Schultz has his eye on growing more than plants. “We’re definitely trying to work toward getting the next generation [of consumers] enthusiastic about gardening and doing stuff outside to help keep building the industry and building our base,” he says.

EAST PIERRE LANDSCAPE
& GARDEN CENTER

EAST PIERRE LANDSCAPE & GARDEN CENTER

Pierre, South Dakota

WHEN ART SMITH and his wife, Mary Eckstrom, bought East Pierre Landscape and Garden Center in 2015, the IGC had been a local institution since 1952. The growing aspect of the business had faded out through the years, but it made a quick comeback with new owners at the helm.

After purchasing the business, the pair soon discovered that buying in finished product left gaps between what they could get and what their customers wanted. A desire for greater control over inventory and offerings led them to grow more. Since the pandemic hit, they’ve continued that course.

“We want particular product that we can’t get, so we are increasing [our growing],” Smith says. The IGC grows bedding plants, hanging baskets, perennials, indoor foliage plants, succulents, vegetables and herbs. Bare root perennial production has increased significantly.

The IGC’s four shoppable, gutter-connected greenhouses have undergone improvements from new tables to retrofitted roofs, to support growth. An additional greenhouse is devoted to product destined for the South Dakota Capitol building, Governor’s Mansion and other state buildings in Pierre.

East Pierre’s greatest challenge to expansion has been the labor shortage, exacerbated by COVID. The IGC lost several staff, including a hort-degreed employee who they thought was their succession plan. With a labor force of mostly high schoolers in their first jobs, Smith is still determined to increase on-site growing to provide customers with the plants they want.

He expects next year’s supply chain challenges and demand to be much like 2021. “What we are doing then is taking matters into our own hands,” he says. “We’re starting off with seeds on this, we’re doing plugs on that — growing things up ourselves.”

Smith’s and Eckstrom’s plans include more and more plants grown on-site — and time spent in the new greenhouse when the citrus comes in bloom.

Smith says the business has been self-funded from the beginning and pre-pandemic growth made several property improvements possible. 2020 and 2021 garden center and gift shop sales increases of nearly 35% over previous years will help fund future projects. These include a 1,700-square-foot, in-ground, high-efficiency greenhouse for citrus and avocado production — part of a venture into finished produce.

CANADIAN NONPROFIT ORGANIZATION Arch Enterprises launched Arch Greenhouses in 1979 as a therapy program for developmentally disabled adults. Over the years, the facility’s staffing and production evolved, but the self-sufficient greenhouse and its customers still help support the nonprofit’s community of clients.

Since the beginning, growing has been integral to Arch Greenhouses’ mission and success. The landlocked facility’s 35,000-square-foot greenhouse nearly fills its 1-acre city lot. With physical expansion constrained, growth focuses on improving efficiency and productivity within existing space, from shipping and receiving to storage and greenhouse production.

Greenhouse manager and head grower Aaron Webb estimates that 85% of Arch’s plant material is grown on site. Spring production focuses on annuals, perennials, succulents, vegetables and herbs for the IGC’s own retail sales. Fall mum and poinsettia crops are primarily wholesaled. That’s remained constant through the pandemic.

Webb continues to look for ways to increase plant diversity and volume. Coleus and begonias are Arch specialties. He plans to increase in-house production of tropical plants, a trend strengthened by pandemic-driven interest. “Houseplants have been a really great season extender for us,” he adds.

When the pandemic began, one of Arch’s suppliers offered a discount if the IGC would maintain its order — while shutdown talks led others to cancel. Webb agreed, and the gamble paid off: Arch had plants when others did not. But Webb isn’t relying on suppliers for inventory control.

“Sourcing isn’t as stable as it has been in previous years. So, even though you might order plugs or seed, you have to accept that the new reality is that you may not get what you ordered,” he says. “It’s kind of forcing us to get creative and get open to doing new stuff.”

While the greenhouse business is autonomous financially, large-ticket facility improvements rely on donations, government grants or outside funding. Webb’s current wish list for the aging infrastructure is a new environmental system to replace their outdated one. But part of his planning for improved production and expansion rests on people, not equipment or plants.

He worries about many people in the horticulture industry approaching retirement age — and few younger people coming up to take their place. “We need to attract more younger people to the industry,” he says. “How do you create that work stability? How do you provide guaranteed income with an attractive compensation package? It’s a big challenge to retain people.”

With increased growing and growth on the horizon, the industry-wide challenge of engaging a new generation of gardeners and employees increases, too. For Webb, Smith and Schultz, growing plants and profits for the future starts with growing opportunities and people.

The author is a freelance writer and frequent contributor to Garden Center magazine. Reach her at jolene@jolenehansen.com.