1. Market / Industry Analysis

2. Landscape Services/ Contractors Mass Merchandisers Retail Nurseries Garden Centers Retail Florists Households Commercial/ Industrial Government Input Sector Nursery Products Bedding Plants Potted Plants Foliage Cut Flowers Greenhouse Nursery Products Wholesale Market/ Florists Green Industry Market Structure 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)

3. Size of Industry: Retail Garden Center/Green Goods Encyclopedia of American Industry – (NGS)  1995 - $25.9 Billion – over previous 5 years sales up about 10 percent annually  In 1996 approximately 12,000 establishments operated retail nurseries and garden stores – majority being small establishments.

4. Size of Industry: Retail Garden Center/Green Goods Ag Outlook 1999 - (USDAS/ERS)  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).

5. Size of Industry: Retail Garden Center/Green Goods National Gardening Survey 1998-99  1998 - $30.19 Billion - double digit percentage increase in sales last two years.  65% of all households (67 million households) participate in some lawn or garden activity down 1% from 1997.  High in participation was 1994 with 74% (72 million) low of 65 million in 1996.

6. Size of Industry: Retail Garden Center/Green Goods Nursery Retailer 2000:  1995 - $67.2 Billion  1998 -$79.1 Billion  1999 -$81.7 Billion – with Green goods sales at $21.7 Billion; Accessories sales of $5.8 Billion 2000 Projection - $85.8 Billion

7. 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 L&G product lines

8. Size of Industry: Retail Garden Center/Green Goods Census of Retail Trade 1997 US1997 # of establishments = 10,908 1992 # of establishments = 10,857 Ohio 1997 # of establishments = 545 1992 # of establishments = 560

9. Consumers: Encyclopedia of American Business  1995 – 74% of households participated in garden activities of some kind = 72 million households  On average $342 per household spent on lawn and garden  Customer Profile: College educated, business/professionals or retirees, Household income $30,000+, Midwest or West, 50 years or older, Married no children at home.

10. Journal of International Food and Agribusiness Management  1986 - $39 per capita on cut flowers, greens, indoor plants  1995 - $54 (same)  1994 - $119 per capita spend on outdoor landscape flowers & plants  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

11. $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 aren’t high level goods, don’t bring it in the store.”

12. National Gardening Survey – 1998-99  1998 – Average per participating household expenditure on lawn & garden activities was $452 - Up 17% from $385 in 1997.

13. National Gardening Survey – 1998-99  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.

14. Competition: Encyclopedia of American Business  1996 – 12,000 establishment operated nursery & garden stores.  Majority were small businesses with 7 employees. Larger businesses average 12 employees.  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.

15. Nursery Retailer 2000 There is a continuing shift to the hardware sector (Lowe’s 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%

16. National Gardening Survey 1998-99 Consumers reported using at least 2 different types of retail outlets: Outlet Type1998 Household%change Garden Centers 2 million -3% Hardware Stores16 million-20% Mass merchandiser21 million 0% Feed/Seed supply11 million-8.3% Supermarket/Drug 8 million-20% Home Centers29 million7.4% Mail Order 8 million14.2%

17. Channel of distribution  1998green goods has 88% of goods one-step channel – {Supplier to Retailer}. Accessories often have two-step channel – {Supplier to Distributor to Retailer}.

18. Products: Nursery Retailer 2000  Green goods DRIVE sales in other categories.  Accessories sales increased at greater % in 1998 than other categories. Becoming a major profit center.  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.

19. Green Goods Product list according to sales: Product% of Sales Evergreens37.2 Bedding/ground plants18.8 Shrubs & flowering trees17.2 Flowering plants12.2 Fruit & nut trees 7.4 Foliage 4.4 Bulbs 2.6

20. National Gardening survey 1998-99 # of Participating% change in Product Households Hshld spending Lawn care49 mil30.1 Flower garden40 mil13.3 Indoor plants30 mil15.0 Shrub care26 mil34.0 Veg garden25 mil1.2 Insect control23 mil18.5 Landscaping23 mil15.4 Flower bulbs22 mil10.0

21. National Gardening survey 1998-99 # of Participating% change in Product Households Hshld spending Tree care19 mil13.3 Fruit trees10 mil-2.0 Container garden11 mil54.9 Grow berries 5 mil56.2 Ornamental garden 5 mil73.9 Herb garden 7 mil0 Water garden 4 mil63.3

22. Encyclopedia of American Businesses  Changes to more bedding plants  Consumers doing Nature-like gardens  More environmentally conscious Wall Street Journal  Some movement away from perennials and to annuals.

23. Trends: Encyclopedia of American Business  Phenomenal growth in the industry in 1980’s and 1990’s – much of this is linked to change in demographics and increased population in the age and income group to purchase.

24.  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

25. 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

26. National Gardening Survey 1998-99  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.  An increase in average spending per household was realized in each category EXCEPT: fruit trees, herb gardening and raising transplants.

27. Industry Seasonality 1987 HRI Operating Cost Study Month% of Sales January0.7 February0.7 March4.1 April14.7 May29.1 June12.8 July6.3 August5.1 September6.7 October6.3 November4.9 December7.7

28. Product Lines Product Lines% of Sales Green goods57.4 Florist & Gift Dept7.2 Christmas Items7.1 Hard Goods24.6 Landscape Maintenance6.7 Other Retail3.5