1. Overview of the Green Industry Special thanks for some of these slides to Dr. Charles R. Hall Professor & Extension Economist Texas A&M University

2. Outline 1. The economic importance of the GREEN industry. 2. Interesting technological advancements that have caused structural changes in the green industry. 3. Marketing systems in the GREEN industry.

3. Largest flower auction in the world Dutch-based – Amsterdam See highlights Aalsmeer Flower Auction Source: Images from Aalsmeer Dutch auction

4. 1. Economic importance of the GREEN industry.

5. Green Industry Also referred to as “environmental horticulture” –Nursery & floriculture –Sod –Greenhouse for ornamental and annual vegetable/tobacco plant stock –Landscaping services Markets include –Home construction/home improvement –Golf courses, parks, outdoor sport facilities, public spaces –Retail garden centers, florists

6. Kentucky’s “green” industry includes … Nursery and greenhouse growers, firms providing landscape services such as contracting and maintenance, and retail operations including independent garden centers, home improvement centers, and mass merchandisers/chain stores.

7. The nursery and greenhouse industry comprises the fastest growing segment of U.S. Agriculture Number of nursery and greenhouse farms continue to increase Grower cash receipts increasing at ~ $500 M per year Third most important sector in U.S. crop agriculture Seven states account for 2/3 of all U.S. nursery crop production --- CA, TX, FL, NC, OR, OH, MD

8. Perspective on Nursery, Greenhouse and Sod Industry U.S. value of agriculture production U.S. value of all crops U.S. value of nursery, greenhouse, sod $202 Billion $ 143 Billion $ 17 Billion Note: Source: 2007 Census of Ag; 2009 Census of Horticulture Specialties.

9. 1. Wholesale receipts for nursery & greenhouse for U.S.: $11.6 billion in 2009 ($10.6 billion in 1998) 2. $5 billion in floriculture crops consumed in U.S. 3. $3.8 billion nursery stock 4. 68% of cut flowers are imported, primarily from Columbia and Ecuador 5. California, Florida & Hawaii major U.S. producers

10. U.S. New Housing Starts - Past Trend 2007-2009 Thousand Homes. Annual Rate Seasonally Adjusted. Updated Wed, Dec 2, 2009 Source: Financial Forecast Center http://www.forecasts.org/house.htm Economic environment will mean a slow 2010-12 recovery for the nursery & greenhouse sector

11. U.S. New Housing Starts – Low and Flat Present Value & Future Projection Thousand Homes. Annual Rate Seasonally Adjusted. Updated Monday, Dec 2, 2012 Source: Financial Forecast Center http://www.forecasts.org/house.htm MonthDate Forecast Value 0Oct 2012894.0 1Nov 2012862 2Dec 2012909 3Jan 2013934 4Feb 2013976 5Mar 20131,020 6Apr 20131,080

12. Home improvement sector showing recovery signs Lowes Home Depot Daily Stock Prices 2008-2012

14. 2. Technological advancements in the GREEN industry that have revolutionized plant production and marketing systems.

15. tissue culture and plug production

16. biotechnology

17. container technology

18. slow-release and soluble fertilization

19. automation technology

20. climate control systems

21. irrigation technology

22. All of these technologies have been important, but… the technological driving force that is shaking things up the most today in the Green Industry is… INFORMATION technology!

23. examples of information technology in green industry

24. precision agr. applications

25. bar code and scanner technology

26. Allied Input Suppliers Shipping Point Firms - nursery growers - greenhouse growers - combination growers - B2B alliances Re-Wholesale Distribution Centers Infomediaries Retail Home Centers 38% Garden Centers 32% Mass Merchants 30% Final Consumers E-commerce Direct to ConsumerLandscape Contractors & Maintenance Flowchart of the Green Industry Marketing System

27. Allied Input Suppliers Shipping Point Firms - nursery growers - greenhouse growers - combination growers - B2B alliances Re-Wholesale Distribution Centers Infomediaries Retail Home Centers 38% Garden Centers 32% Mass Merchants 30% Final Consumers E-commerce Direct to ConsumerLandscape Contractors & Maintenance The NEW Green Industry Structure