Florida Nursery and Landscape Industry Outlook for 2013Final Thoughts • Revenue $13.5 B in 2012...
Transcript of Florida Nursery and Landscape Industry Outlook for 2013Final Thoughts • Revenue $13.5 B in 2012...
Florida Nursery and Landscape
Industry Outlook for 2013 Presented by
Hayk Khachatryan and Alan Hodges
University of Florida, Food & Resource Economics Department
November 2012
Presentation Outline
• Industry at a glance
• Situation
• Sales estimates
• Market channels
• Industry threats
• Growth opportunities
• Competition
• Housing market
• Transportation costs
• Consumer demand
Florida Environmental Horticulture
Industry Profile
• About 4,700 commercial nursery and
greenhouse firms
• Production area: 141,724 open acres, 338
million square feet under protective cover
• Capital assets per firm: $1.18 million
Source: 2007 Census of Agriculture (USDA-NASS)
Florida is the Second Largest State in
Nursery Sales
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Thousand Jobs
Source: Florida Agency for Workforce Innovation, Quarterly Census of Employment and Wages
Florida Horticulture Industry Employment, 2001-10 (monthly)
Services to buildings anddwellings (Landscaping)
Greenhouse and nurseryproduction
Lawn and garden equipmentand supplies stores
3.6
4.1
5.5 5.7
6.7 6.8
6.0
7.7
7.1
2.0 1.9 1.9 2.0 2.0 2.1 2.0 1.8 1.9
0.7 0.8 0.7 0.9 1.2
0.9 0.9 0.6 0.7
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2
3
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Billio
n D
ollars
(2010)
Landscapeservices
Greenhouse,nursery, andfloricultureproduction
Retail lawn andgarden centers
Florida Environmental Horticulture Industry Revenues, 2001-10
Source: Implan
Economic Contributions of the Florida
Environmental Horticulture Industry in 2010
Source: UF-IFAS, Economic contributions of the Florida environmental horticulture industry in 2010, report to
FNGLA, Sept. 2011, available at www.fred.ifas.ufl.edu/economic-impact-analysis/publications
Estimated Sales of Florida Environmental
Horticulture Firms in 2010
Source: UF-IFAS, Economic contributions of the Florida environmental horticulture industry in 2010, report to
FNGLA, Sept. 2011, available at www.fred.ifas.ufl.edu/economic-impact-analysis/publications
Floriculture Crops 2010-11
2010 2011 Percent
Change
2010-11
Wholesale value ($1000)
U.S. (15 states) $4,148,766 $4,080,715 -1.6%
California $1,015,083 $1,011,530 -0.4%
Florida $826,077 $835,233 1.1%
Number producers
U.S. (15 states) 6,164 5,763 -6.5%
California 696 632 -9.2%
Florida 749 702 -6.3%
Covered production area (1000 sq.ft.)
U.S. (15 states) 729,834 711,905 -2.5%
California 135,950 142,579 4.9%
Florida 307,854 287,463 -6.6%
Source: USDA-NASS, Floriculture Crops Report, Apr. 2012.
Data represents operations with $100,000 or more in annual sales.
Florida wholesale floriculture sales by plant type ($1000)
2010 2011 Percent
Change
2010-11
Annual bedding/garden
plants $80,525 $73,667 -8.5%
Herbaceous perennials $46,766 $53,294 14.0%
Potted flower plants $115,421 $114,162 -1.1%
Tropical foliage plants $424,103 $442,650 4.4%
Cut flowers NA $3,663
Cut cultivated greens $59,394 $54,684 -7.9%
Propagative material $78,642 $81,713 3.9%
Total All Types $804,851 $823,833 2.4%
Distribution of Survey Respondents by Annual
Sales Range (2010)
0% 10% 20% 30% 40% 50%
Not available
less than $100,000
$100,000 - $249,999
$250,000 - $499,999
$500,000 - $999,999
$1.0 - $2.49 million
$2.5 - $4.99 million
$5.0 - $9.99 million
$10 - $19.99 million
$20 – $49.99 million
$50 - $99.99 million
$100 million or more
Percent of Respondents
An
nu
al
Sale
s R
an
ge
Nursery
Landscape
Retailer
Allied
Sales by Market Region (2010)
22.7%
83.9%
68.5%
10.3%
22.1%
13.9%
23.9%
23.8%
51.9%
2.0%
7.0%
60.4%
3.4%
0.2%
0.6%
5.5%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Nursery
Landscape
Retailer
Allied
Percent of Sales Reported
Local area
Florida (non-local)
Other states
International
Nurseries and Greenhouse Sales by
Plant Type in 2010
34.7% 21.5%
10.1%
9.5%
5.5%
4.5%
4.3%
3.4%
3.1%
2.4%
0.6%
0.4%
0% 10% 20% 30% 40%
Tropical foliage
Potted flowering…
Shrubs
Palms
Other
Liners, cuttings, plugs
Deciduous shade trees
Vines or ground…
Flowering and fruit…
Evergreen trees
Cut foliage, cut…
Turfgrass
Percent of Sales Reported
1,480
916
431
404
237
190
185
144
132
104
25
16
0 500 1,000 1,500 2,000
Million Dollars
Landscape Firm Sales by Service/Product
Type in 2010
43.8% 22.8%
11.8%
8.2%
5.4%
4.0%
3.2%
0.7%
0% 10% 20% 30% 40% 50%
Landscape maint.
Landscape installation
Live plants
Landscape design
Supplies / equipment
Landscape consulting
Other
Interiorscaping
Percent of Sales Reported
2,647
1,377
712
498
324
244
196
42
0 500 1,000 1,500 2,000 2,500 3,000
Million Dollars
Horticultural Retailer Sales by Product
Type in 2010
50.6%
28.8%
13.7%
6.9%
0% 10% 20% 30% 40% 50% 60%
Live plants
Other goods
Supplies
Hard goods
Percent of Sales Reported
744
424
202
101
0 200 400 600 800
Million Dollars
Allied-Supplier Sales by Product/Service
Type in 2010
37.7% 15.9%
14.6%
14.5%
13.3%
2.3%
1.1%
0.4%
0.1%
0.1%
0% 10% 20% 30% 40%
Chemicals
Other products or services
Financial & insurance…
Fertilizer
Nursery containers
Equipment and tools
Soil media
Packaging materials
Consulting services
Peat
Percent of Sales Reported
211
89
82
81
74
13
6
2
1
0
0 100 200 300
Million Dollars
Nurseries and Greenhouse Sales by
Customer Type in 2010
37.2% 14.4%
12.7%
11.1%
9.3%
8.7%
3.7%
1.7%
1.3%
0% 10% 20% 30% 40%
Home improvement stores
Landscape contractors,…
Mass merchandise stores
Re-wholesalers or brokers
Ind. retail garden centers
Other growers
Homeowners
Developers, property…
Other customers
Percent of Sales Reported
1,587
612
543
471
398
369
157
72
55
0 500 1,000 1,500 2,000
Million Dollars
Landscape Service Firm Sales by
Customer Type in 2010
35.9% 21.9%
15.5%
10.8%
8.8%
5.4%
1.7%
0% 10% 20% 30% 40%
Homeowners
Apartments, condos
Commercial estab.
Builders, developers
Other landscape firms
Governments
Other
Percent of Sales Reported
2,171
1,322
934
651
531
328
101
0 1,000 2,000 3,000
Million Dollars
Horticultural Retailer Sales by Customer
Type in 2010
51.1%
19.4%
10.3%
7.6%
5.5%
3.8%
2.5%
0% 10% 20% 30% 40% 50% 60%
Homeowners
Commercial establishments
Apartments, condominiums
Landscape contractors
Other type of customer
Other retailers
Governments
Percent of Sales Reported
751
285
151
111
80
55
36
0 200 400 600 800
Million Dollars
Issues or Threats to the Environmental
Horticulture Industry
3 4 5 6 7 8 9
Economic recession
Energy or transportation costs
Increasing costs of production
Low prices for products or services
Drought or water use restrictions
Government regulations
Lack of professionalism
Market power of large retail chains
Poor worker education or skills
Restrictions on chemicals
Immigration enforcement
Competition by plant substitutes
Mean Importance Rating (1-10 scale)
Nursery
Landscape
Retailer
Allied
Source: UF-IFAS, Economic contributions of the Florida environmental horticulture industry in 2010, report to
FNGLA, Sept. 2011, available at www.fred.ifas.ufl.edu/economic-impact-analysis/publications
Opportunities for Growth by Florida
Horticulture Businesses
0% 10% 20% 30% 40% 50% 60%
Offering new services (e.g. green walls, roofs)
Securing sustainability certifications
Growing/Selling Florida-friendly plants
Using social media (e.g. Facebook, Twitter)
Expanding digital presence (websites, i-phone apps)
Participating in branding campaigns
Networking or partnering with builders/developers
Earning FNGLA professional certification
Using/Selling biodegradable containers
Landscape installation or maintenance
Changing plant or product mix
Retailing direct to the public
Growing bio-fuel energy crops
Growing edible crops
Contract growing
Percent of respondents already doing or very interested
Nursery
Landscape
Retailer
External Factors Affecting Industry
Performance
• Housing market dynamics - existing sales and
new construction starts
• Unemployment rate
• Consumer confidence index
• Competition - intra-industry and foreign
• Transportation efficiency and fuel prices
• Consumer preferences and demand
Housing Market: Case-Shiller Home Price
Index, Florida and U.S.
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100
150
200
250
300
Dec-99 Apr-01 Sep-02 Jan-04 May-05 Oct-06 Feb-08 Jul-09 Nov-10 Apr-12
S&
P/C
ase
-Sh
ille
r H
om
e P
rice
In
dex
Lev
el
National Miami Tampa
Source: Standard and Poor’s Indices; http://us.spindices.com/
Unemployment Rate: Florida, CA, TX, & U.S.
Source: Bureau of Labor Statistics, through Google Public Data Service
Florida Consumer Confidence Index
(2000-2012)
Source: University of Florida, Bureau of Economic and Business Research
Competition: Intra-industry and Imports
• Large producers vs. small, family-owned operations
• Large chain stores vs. specialized retailers
• U.S. is a net importer of nursery products
• 2012 imports, $1.9 B, 12.5% of domestic demand
(expected 19.3%)
• U.S. exports 3.1%; $415.2 M of revenue
• Duty-free imports from South America (cheap labor,
favorable weather)
• The Andean Trade Promotion and Drug Eradication
Act
Industry Consolidation
• U.S. Establishments in 2007 - 52,845
• Decreased to 45,565 in 2012 (16%↓)
• Small firms exiting the industry
• Larger firms:
Efficient means of transportation
Improved logistics
Lower costs
Lower prices
Transportation Costs and Industry
Consolidation
Factors in choosing plants (1=Not important, 5=Extremely important)
2.9
3.6
3.8
3.8
3.9
3.9
4
4.1
4.4
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
Effectiveness of Air Purification
Drought Tolerance
Light Demand
Size of Plant
Flowering
Guaranteed Growth
Color
Price
Quality of Plant
Importance Score (1=Not important; 5=Extremely Important)
Source: Choi, H.J., and H. Khachatryan. 2012. Main Factors Affecting Consumers’ Ornamental Plant Selection and Store Choice:
Results from a National Consumer Survey. Mid-Florida Research and Education Center, Apopka, FL. Unpublished Report.
Final Thoughts
• Revenue $13.5 B in 2012
• Decreased 4.2% per year since 2007
• 2012-2017 projected growth -0.7% per year (IBIS World Industry Report 11142, Sep 2012)
• Innovation
GM seeds (licensing issues)
Perceptions about GM movement
Disease resistant varieties
Consumer preferences
Plant quality vs. price
Thank you for attention!
Alan W. Hodges ([email protected])
Hayk Khachatryan ([email protected])
Food & Resource Economics Department
Institute of Food and Agricultural Sciences
University of Florida