When COVID-era gardeners flocked to IGCs in the spring of 2020, many stores saw revenues rise to levels not seen in years. And even as restrictions lift and customers return to more normal routines, sales are still looking strong. But with the cost of materials, labor and shipping shooting up, there are certain pain points to consider as IGCs work to stock their stores and serve an increase in customers. So as garden centers plan for the coming years, they’re prioritizing employees, facilities and finding ways to stay stocked, despite the challenges of 2021.

Leveling off

While last year was an anomaly that boosted revenues to unexpected heights, sales this year have been through the roof up until August at Sloat Garden Center’s 13 locations in the San Francisco Bay area. This year, the intense California drought brought nothing but sunshine January through March, so the IGC went into an incredibly busy spring well ahead of 2020.

Last year, Sloat’s stores only had to close for one day since California designated garden centers as essential businesses early on in the pandemic. “There was very little difference between a Saturday and a Wednesday,” Stoner says. “Every day was Saturday from about April 1 through September. There was very little fluctuation.”

Now, in 2021, the numbers are starting to return to a more normal cycle with peak sales on the weekends as customers returned to work. The seasonal cycles are returning as well this year as summer sales slowed compared to the spring peak.

Cross Creek Nursery in eastern Virginia is also seeing a leveling off from the peak of 2020, but business is still going strong, says Jason McAuliffe, president. While numbers this year aren’t reaching the extreme heights of 2020, he’s still seeing an increase from previous years.

And while 2021 overall sales aren’t as high as 2020’s for Sloat either, Stoner says that revenue is still up about 15% over 2019. “But if I’m going to fall behind any year, falling behind 2020 is okay,” Stoner says with a laugh.

Investing profits

Sloat Garden Center likes to stay cash-rich, but the increased profits have allowed the company to pull the trigger on some planned projects like a major remodel of an acquired store and a remodel of an older, established store. There are more facility improvements planned for the next couple of years as well.

Cross Creek is also investing in infrastructure with a new, expanded parking lot, along with expansions to its point-of-sale system. And because the cost of bringing in plant material is going up, they’re increasing their growing footprint to alleviate supply chain issues.

“We’re increasing our production line to include a lot of things we typically relied on bringing in, just so that we’re not relying on material out there, and also control our costs and keep our costs down on the retail,” McAuliffe says. “So while other places might have to increase their costs on that stuff, we can maintain that cost margin. I think that would make us stand out amongst the others.”

Sloat is also investing in its growing operations with a potting machine that will help cut down on labor. In the past, the company could hand-plant about 2,000 plants, fertilize them and get them out in the field in a day. Now, they can do 16,000. “Technology is definitely something we’re investing in because you’ve got to automate. Labor is too expensive and it’s too scarce,” Stoner says.

Both IGCs have also put some of their profits toward their employees with bonuses to staff who stuck through the hard times.

Investing in staff

Staffing continues to be the biggest challenge for garden centers all over North America. When COVID hit, many of Cross Creek’s employees were uncomfortable coming to work, so the IGC started thinking outside the box to look for staff.

Through some networking, the garden center found some homeschooled students who were able to move their schedules around to work during the day. They also found success with part-time workers and flexible schedules.

“They didn’t have to work 40 hours a week. It was really just, ‘What can you give me? I’ll take anything,’” McAuliffe says. Even his wife and sister-in-law were pitching in by answering phones and his brothers helped out on the landscape side.

Sloat ran into a similar problem with staffing, with 30-40% of staff choosing to stay home (none lost their jobs). About half came back within six to eight weeks but some never returned.

The IGC tapped into college students who were available much earlier than the usual June or July thanks to virtual classes.

Cross Creek also went above and beyond to make the workplace fun and energetic to compete with other garden centers in the area. “When somebody comes over from another garden center, they realize how well it’s run, how well people respected, how the culture is here,” McAuliffe says. “It’s fun, it’s hip, it’s happy. The word gets out and then we have other good prospects come in.”

To help staff feel safer, Cross Creek also closed their greenhouses to customers, which was a significant decrease in shopping space. Even with all of those efforts, the company wasn’t able to get the staffing it needed in the garden center, or in the landscape division, but they made it through.

Labor costs, as a percentage of sales, were much lower in 2020 than in previous years at Sloat, but Stoner says the company has done more hiring in the last 18 months than he can ever remember.

Cross Creek is also hiring more, increasing its starting pay across the board, gave out bonuses at the end of the season as a thank-you for helping them keep the ship afloat. And the staff that remained with the company also received a pay increase.

Looking ahead

The customer demographic for many is skewing younger than before and at Cross Creek, those shoppers are looking for tropicals. The IGC was bringing in a truckload of tropicals each month, once every two weeks at max, now they’re getting a truck every week. And they’re still selling out.

Sloat is seeing the same shift to a younger base. “The fact that we have so many new gardeners that are depending on garden centers for a newfound passion bodes really well for the industry over the next 10 years,” Stoner says. “They have a vested interest in the garden that they didn’t have two years ago.”

And thanks to children staying home from school, many of them were involved in their parents’ newfound hobby, which Stoner hopes will spark a lifelong passion for growing. “It’s the youth who have been exposed to this who might not have loved it before because before, it was a chore. But it was something to do other than FaceTime or Zoom.”

Four or five years ago, Sloat started a kids’ club to help capture young gardeners’ interest. In 2021, they’ve sent more membership cards to the store than ever before. It’s a clear sign that the kids are still interested.

Shipping and shortages

Logistics and price increases have made shipping a huge pain point when it comes to both plants and hard goods, particularly imports. According to a global pricing index by London-based Drewry Shipping Consultants Ltd., the average worldwide price to ship a 40-foot container has more than quadrupled in the last year.

And garden centers are seeing the effects firsthand. Cross Creek paid as little as $3,000 for a shipment from Vietnam in past years. Now, it’s anywhere from $11,000 to $18,000, so McAuliffe is holding containers in Vietnam in hopes that prices will go back down.

“I’m constantly in contact with our shipping people over there to see when the price will get better and unfortunately, it just keeps going up,” he says.

Aggressive ordering helped Sloat when it came to imports in 2020 and the garden center is embracing the strategy. The IGC directly imports its signature line of pottery and was lucky enough to have its stores and warehouses packed to the brim in February, right before the pandemic hit, with more booked for delivery.

“By summertime, we were the only company in our area that had pottery to sell,” Stoner says. They’re maintaining that aggressive approach to ensure stock in the future as well, increasing from 30 containers a year to 60.

It’s not just international shipping that’s causing issues. National shipping is also affecting plant costs for Cross Creek, where costs are sometimes twice what they were in previous years. Shipments of tropicals have jumped from $20,000-$25,000 to $30,000-$40,000 and West Coast freights from Oregon are up to $5,000 more.

Thanks to heavy demand and shipping issues, plant shortages continue to plague the industry as they did in 2020 and vegetables, in particular, have been a difficulty for Sloat Garden Center. “We have phenomenal buyers and we set the tone for them early in the pandemic to be super aggressive with whatever they could book for 2021 however early they could do it,” he says, noting that the company went into this year booking more material than ever before.

Because Sloat’s locations are near so many growers, the IGC doesn’t typically need to book material. They don’t have to ship far or even book full trucks. “We’ve been really fortunate there,” Stoner says. “I know that hasn’t been the case for other nurseries around the country.”

Prices and profits

Despite the increases in the cost of doing business, Cross Creek has seen a 24-28% increase in profits in 2020 vs. 2019 and Sloat has seen a “dramatic increase,” according to Stoner.

“I don’t think it was just volume that led to it because we were running a skeleton crew,” he says. “Labor costs were nothing I would ever plan for. Labor costs were lower than you would ever want them to be.”

Also keeping an eye on profitability, Cross Creek sends out a weekly report to each department manager to ensure that items aren’t being undervalued.

It’s definitely something to keep an eye on as plant prices, pot prices, soil prices and more are going up, according to McAuliffe. Since Cross Creek is a grower-retailer, it has been able to control prices somewhat, but the input costs continue to increase and McAuliffe doesn’t see them going back down.

“That’s just going to be an increased cost of doing business,” he says, noting that IGCs will likely need to increase prices as well. “In our industry, pricing is already low, so I think it’s time to start raising some of these prices and hopefully our customers will go with it. If we continue to put out a good product and great customer service, I think we’re okay. We don’t take price increases lightly but when we have to do it, we have to do it.”

When I started working at my garden center in 1994, the manager of the perennial department, Dave Lane, brought in liners every March. We potted these up and grew them later in the summer, using one heated and two solar-warmed hoop-houses. By early June, those plants were of saleable size. Dave had run the numbers and decided that even figuring in the cost of materials and labor, the profit margins on those perennials made it worthwhile to grow some of our own.

After four or five years, we discontinued this practice — primarily because we needed the retail space used by the hoop-houses, and we often didn’t have enough employees to care for those growing perennials in May. Additionally, our sales were going up, and we needed a sizeable, continual influx of perennials from early May through the summer. Vendors commonly supplied the plants we grew from liners, so it didn’t make sense to grow those plants ourselves.

Beyond profits

Although Dave’s calculations about our profit margins were correct, the reality was that we ended up making more money by bringing in the finished plants frequently. Yet I miss those years when we grew some of our own because, in addition to common perennials, I was also able to raise plants that weren’t available from our vendors. I grew odd, plant-geek selections from seed and propagated unusual varieties that weren’t available elsewhere.

Upon finding the Rubus cockburnianus ‘Aureus’ that I’d propagated from my own plants, one plant fanatic’s eyes lit up. “I don’t often find a plant in garden centers that I’m not familiar with,” she said, happily putting a pot on her cart. “I guess you’ll be seeing me again.”

It’s not just the rare or quirky that I miss on our shelves, however. There are many great plants that I want to recommend to my customers, but we can’t find a grower who offers them. They might have been commonly grown 10 years ago, but for a variety of reasons, they’re no longer available. It’s sad when this happens, and preventing good plants from disappearing is a key reason that IGCs might want to grow at least part of their own stock.

Unusual, a broader range and hard to find

Don Shor, owner of Redwood Barn Nursery in Davis, California, says that he grows several fun and interesting varieties from seed. “Evening scented stock!” he exclaims. “Also, this year I grew Zaluzianskya capensis Midnight Candy. And I’m now growing a significant percentage of my own roses because I wanted to have a broader range of varieties.”

In Joe Kiefer’s opinion, growing unusual or hard-to-find plants helps retain a unique and regionally focused business. His garden center, Triple Oaks Nursery & Herb Garden in Franklinville, New Jersey, raises unusual plants not readily available in the trade, along with local indigenous natives. “Another plant we grow is elecampane (Inula helenium),” he says, “because it’s a powerful immune system booster and I have never seen it offered. We bought it at some point 20 years ago, because it’s in our herb garden, but now I grow it from seed.”

“We are right near Cumberland County, New Jersey,” Joe continues, “which is a huge nursery production county, so we can’t compete with normal plants. They can do it better and cheaper, but the oddball stuff they don’t do, we can do here and stand out. Then we promote them on our website, email and social media.”

Susan Penland Reavis agrees. She’s been growing and retailing since 1979 in North Carolina, and they propagate many varieties of ornamentals and vegetables. “Over the years we have honed in on growing what’s unavailable, hard to ship and/or more expensive to buy in finished,” Susan says.

“We keep a number of Jewel Orchids in production and have rare cool things going like various ant plants, Oxalis gigantea and Oxalis palmifrons,” says Hap Hollibaugh of Cactus Jungle Nursery and Gardens in the San Francisco Bay area. But like Susan, he also raises plants when the availability is erratic. “With the houseplant craze I have increased the rarer, hard-to-get, and trending crops,” he says, “just because we haven’t had reliable delivery on our orders.”

Setting yourself apart

Growing varieties that are generally unavailable elsewhere helps keep good plants from disappearing completely. And it doesn’t just position you as an alternative to the box stores … it can be the reason that people come to your store in the first place. Heather Pariso of The Garden Gurl Shop in Dover, Ohio, grows several varieties of heirloom tomatoes.

“Every year I have to increase the numbers I grow, and it tickles me to grow rare plants in order to expand people’s horizons and keep the plant passion alive,” she says. “I really think setting yourself apart from the competing interests of the customers.”

C.L. Fornari is a speaker, writer and radio/podcast host who has worked at Hyannis Country Garden, an IGC on Cape Cod, for more than 20 years. She has her audiences convinced that C.L. stands for “Compost Lover.” Learn more at www.GardenLady.com 

The numbers are in and they’re impressive. I’m sure it comes as no surprise that 2020 retail revenues skyrocketed past 2019, but looking at the 100 top-grossing independent garden centers all together paints an optimistic picture for the industry.

This year’s list brought in $342 million more than they did in 2019, and $485 million more than 2018 and 2017. While we expected to see a big bump in 2020 revenue over past years, these numbers are amazing. While not every garden center on the list saw a huge increase in revenue, fewer than 10 saw a decrease. And many saw an increase of $1 million or more.

I’d like to thank everyone who took the time to share their 2020 retail revenue with us for this year’s list. While revenue is certainly not the only important benchmark in the industry, we’re incredibly grateful to everyone who took the time to send their information.

Inside this issue, you’ll find stories of IGCs that found ways to invest, innovate and overcome in the midst of a crazy year. From unique ways to appreciate staff on page 42, an IGC that built a brand-new store in the middle of the pandemic on page 36 and financial insights on page 22, we’re amazed at what the industry accomplished in 2020.

That’s not to say 2020 was an easy year for garden centers. It was far from it. Through shutdowns, capacity limitations, mask mandates, staff shortages and all kinds of other stress, independent garden centers managed to dig deep and come out on top last year. And it seems like revenues are looking good for 2021 as well thanks to efforts to retain all of those new customers who helped boost 2020 retail numbers higher than they’ve been in years.

Of course, the Top 100 Independent Garden Centers List is just a snippet of how a certain segment of the industry is doing. In our November issue, we’ll be digging more into the market with our annual State of the Industry report. I hope you’ll share your thoughts and insights with us to help make the report as accurate as possible.

Congratulations to all of the businesses that made this year’s list! I hope you and your team celebrate this well-deserved recognition.

Kate Spirgen
kspirgen@gie.net

W hen consumers started spending more time at home in 2020, they headed to garden centers in droves, many for the first time. A National Garden Bureau report found that 18 million Americans started gardening in 2020, and they got hooked on their new hobby. These customers came with lots of enthusiasm, little knowledge and different needs than the traditional IGC customer. While the gardening momentum doesn’t seem to be dying down any time soon, the garden as we know it may be changing due to demands from this new demographic.

“I think [COVID] was the shot in the arm that our industry needed. We’ve talked for a long time about how to get the next generation into gardening,” says Jennifer Calhoun, marketing specialist for Benary. “I think that’s going to continue. I think eventually it’s going to taper off a little bit because people are going back to work. They’re going to go back to travel. They’re going to go back to their busy scheduled lives. However, I think that they’re always going to continue gardening some.”

A mobile survey conducted by Monrovia in June showed that some may even garden more. The company found that 41% of homeowners interested in gardening expect to spend more time digging in the dirt now than they did during pandemic lockdowns.

Another survey conducted by Monrovia found that consumers have been drawn to gardening over the past couple of years, not because they were bored or wanted to entertain outdoors or even to reconnect with nature, but because they wanted to pursue a hobby. “I think that a lot of people got into gardening in the last two years because it was something they were doing for themselves during a really stressful, difficult time,” says Katie Tamony, chief marketing officer for Monrovia.

But beyond COVID hobbies, the housing market is fueling the fire for gardening. Combining numbers from the Association of Realtors and the U.S. Census Bureau, nearly 6.5 million homes were sold in 2020. Those 2020 sales were at the highest level in the U.S. since 2006.

“It’s usually when people buy a house that they decide they want to garden,” Calhoun says. “And the housing market right now is hot. People are buying houses like crazy, so people are gardening and people that you would never really expect to garden, they’re putting in plants. And even if they can’t till the soil and have a traditional garden, they’re having a bunch of pots of vegetables or a balcony garden or things like that.”

Capture new interest

Like any new hobbyist, budding gardeners need help finding their way to success. Guidance and education are the keys, Tamony says. “I think sometimes new gardeners feel like ‘I don’t even know what to ask,’ so I think it’s important to make the garden center welcome.”

Signage is a key way to help new customers navigate the garden center without even needing to ask questions. “Have signage that tells people where to go with their questions or have posters that explain what an annual or a perennial is,” Tamony says. “That makes people feel comfortable and it doesn’t make those experienced gardeners turn away. It makes those inexperienced gardeners feel invited in.”

Being good stewards to new gardeners, capturing their attention and sharing your excitement for plants is key to keeping those new hobbyists coming back, says Katie Rotella, marketing and communications, Ball Horticultural.

“Teach them; showcase the plants that are easy so that they take a chance next year. We had great weather last year. I think people were successful and that’s what we’re seeing the fruition of this year. So regardless of the weather or how people are educating themselves, be part of that system and bring them back. If they feel successful, they’re going to just keep coming,” she says.

To that end, Rotella says it’s important not only to have the right plants to fit new gardeners’ needs, but to showcase that with clear signage. This new group will not only be leaning on an IGC’s displays, but on staff recommendations as well, Rotella says, so educating employees about easy-care plants is a must.

For further education outside of the garden center, videos are becoming more and more popular. When gardeners couldn’t get out to the garden center for advice, many turned to YouTube or even TikTok for plant advice. And after a year of Zoom calls and Microsoft Teams meetings, video is more mainstream than ever before. “I think people are taking videos more seriously,” Calhoun says.

To welcome new gardeners, it’s important to note they aren’t looking at plants the same way your existing customers do, Rotella says. “They don’t consider themselves gardeners. They just consider themselves plant people or plant parents, so how do we service them in the garden center? How do we get them in the dirt?”

To help newer gardeners, offer plants that can take sun or shade for versatility in the garden. Another good option is plants that offer “a lot of instant gratification” with easy maintenance, Rotella says. The idea is to help new gardeners be successful as they learn more about plant care.

Good options for those new gardeners are shade plants, succulents and roses, says Amanda Flint, plant project manager at PlantHaven. “You put it in your garden, it takes next to no effort and it’s covered in blooms and color almost all year round,” she says. “I think anything that can fit into that market is going to continue to trend and do very well with gardeners.”

Foliage is another key when it comes to multi-season interest, Tamony says. She’s noticing that people want plants that look good throughout the year. “And I think that’s one of the reasons foliage is becoming so important and interesting to people,” she says. Houseplants are driving that trend as well, but for outdoor growers, interesting foliage can help extend the life and interest of a plant in the garden for multiple seasons.

Edible gardening

Many new gardeners find their way into the garden with vegetable plants, finding success there first and moving on to ornamentals afterward. Food gardening was the fastest-growing gardening category in 2020, according to the National Garden Bureau.

Even before the advent of COVID, there was a growing trend in cultivating your own food, whether it was for food independence or the increased interest in plant-based diets, according to Dr. Bridget Behe, professor of horticulture, Michigan State University. That movement gained even more momentum during the pandemic. “We need to think about helping people have control by growing fresh fruits, vegetables, herbs,” Behe said during a Cultivate’21 presentation. “It’s about the perception of control. It’s probably not enough tomatoes to feed your family but it gives people a sense of control.”

And it’s not just food security giving consumers a sense of control. Amidst concerns about salmonella and E. coli during recent years (and several recalls), vegetable gardening is becoming even more attractive.

“That way they know it’s not tainted,” Calhoun says. “I think it’s that, plus it’s fun. There have been a lot of studies showing that once people start vegetable gardening, it’s kind of a gateway to flower gardening because then they’re more comfortable. And then they realize, ‘My yard can look as pretty as my neighbors’ and then they start branching into other things and they fall in love.”

Even more powerful than the plant-based diet trend, the organic movement or food independence is the local movement, Behe says. So backyard farming can not only help gardeners feel more control over their diets, but also give them feel the satisfaction of feeding their own families right from their own backyards with great flavor and great nutrition.

And that’s where IGCs can really differentiate from the big-box stores. While consumers can buy vegetable and herb plants from big-box stores, only garden centers will help gardeners be successful from planting to harvest.

Mixing up garden design

Gardeners are starting to mix up garden design as well, combining edibles with ornamentals for a new look. “They might mix their vegetables with their flower because they don’t know that they’re supposed to have a vegetable patch and a flower patch or a hanging basket that doesn’t include vegetables,” Rotella says. “So just expect the unexpected with this new group.”

Rotella says she’s doing just that in her own garden as well, mixing petunias in among her spearmint and oregano. “So there’s nothing that says vegetable gardens need to be green or just fruiting. Plant those marigolds in there, get those spreading petunias and other plants in there as well.”

And the same trend is taking over in containers — annuals and perennials are being planted in the same pot, vegetables are being mixed with colorful blooms and herbs are showing up in containers with textured foliage. It seems the ‘less is more’ approach is on the outs right now. Rather than a monoculture, customers are looking for containers full of variety, but still artfully designed.

“I think there’s a kind of no-holds-barred approach to containers nowadays,” Rotella says. “I think mixing vegetables, herbs, flowers and perennials is going to be the kind of the way that people are going.”

Tamony says the ‘Garden of Eden’ look is gaining traction with landscape designers in her area, and monoculture is on its way out. The look is all about layering edibles, perennials, trees and shrubs together.

“You’re starting to see that it’s OK to have your blueberry planted right next to your hydrangea and so just not thinking about these things as separate, but actually it’s a creative garden, which I think more people are interested in,” she says. “You want to mix it up because it’s going to look more natural.”

Warm and happy colors

Warm and happy colors seem to be taking the spotlight as customers come out of the pandemic, matching the optimism of consumers looking to a post-pandemic future. “People are finding ways to invigorate their lives with color,” Rotella says, whether that’s in the home or in the garden. She’s seeing gardeners gravitate toward warm colors, mixing reds, pinks and purples all together, or optimistic colors like sunny yellows.

“I don’t think you’re going to see as many of those elegant décor items like it used to be maybe two years ago with white and green or soft blues,” she says. “I think people are really going toward the hot, kind of summer colors. They want to feel little energy back in their lives and an easy way to do that is with color.”

Flint says Americans are really loving bright, bold and vivid colors right now as well, adding that reds, pinks and purples are the top sellers. But she has also seen the use of more white flowers among the colors to help make them pop and speculates that we could see more neutral colors in future gardens as a backdrop or complement to those bright blooms.

Contrast is key to make those colors pop, Calhoun says. Homeowners with more muted exterior colors tend to want more brightly colored houses while those with bright houses tend to go more for white for that contrast. The key is to have something for everyone.

The palette for foliage is going far beyond the traditional as well. Variegated foliage plants with pops of color like ‘Pink Princess’ philodendron are selling at incredibly high prices. But anything from black to orange is trending right now, Flint says.

Boom or bust?

As pandemic restrictions lift and consumers have more options for their disposable income like travel and dining out, it’s not only their wallets but their watches that the industry needs to be aware of.

Rotella has some optimism that new gardeners will stick around even after pandemic restrictions are lifted. “Once it gets into your soul, gardening just becomes one of those things that you always find time and money to do,” Rotella says.

And while gardening may lose some market share to other interests like pets or travel or going out to eat, there could be ways to tie their gardening interests and their other interests together.

“What are those pet-friendly gardens? What are kid-friendly gardens? What are those plants you thought about on vacation that you can bring into your home? With tropicals and exotic-looking plants, you’re reminding them of their other hobbies,” Rotella says.

The key is making sure gardeners can keep on planting despite life returning to normal. Offering options that can thrive on their own for a week while travelers take vacation or jet off on a business trip is a great way to keep gardeners from getting discouraged. “Something that’s easy to grow, that won’t just melt into a pile of nothing when they go to work or go on vacation. I think those are going to do well,” Calhoun says.

And as North Americans have more options for their time and their money, easy-care, low-maintenance plants (both indoors and out) can help IGCs succeed, Flint says. “Time is something that’s always going to be really difficult to get, especially for younger generations. Where do they want to spend it? And so plants that are going to be easy but still give them the high amount of dopamine or serotonin.”

By continuing to talk about what plants can do to make people happy, feed their families, de-stress their lives and reconnect with nature, the 2020 garden boom just might stick.