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The American Hort State of the Industry Whitepaper provides insights into the challenges and opportunities facing the industry. The report can help growers identify areas they can improve. Nurseries that can adapt to these trends and challenges will be better positioned for success in the years ahead.
1. The Economy Economists warned that a recession was looming, but it never came. Our economy is doing better than before the pandemic, and the Unemployment Rate is above pre-pandemic percent.
2. Consumer Spending At the start of the pandemic, as supply costs were increasing growers could increase their prices, but consumers are more strategic in their spending and looking for value. Growers are more hesitant to increase prices now.
3. Year-over-Year Analysis Many retailers are seeing a flatline when comparing sales year over year. They are maintaining their revenue, but they are not seeing growth anymore.
4. Supply Costs Supply chain disruptions and increased demand raised supply costs early in the pandemic. Many factors including improvements in supply chain communication, digitization, flexibility, and sustainability have improved the supply chain.
5. Changing Consumer Desires Data suggests houseplant sales are diminishing while perennial sales have increased. Companies are working to create value and focus on products with higher ROI to continue to be profitable.
6. Home Purchases Higher mortgage rates and a lower number of homes available on the market have increased the cost of purchasing a home. As families are struggling to afford to purchase homes, they are less likely to purchase plants, however, people who already own their homes are spending on their landscape.
7. Agricultural Labor Challenges Labor shortages are affecting the greenhouse industry. Current H-2A and H-2B visas do not meet the demand for labor.
8. Plant Pests American Hort supports programs to help nurseries combat the threat that pests cause on growers.
9. Changes to Tax Laws Numerous tax laws could change over the next few years that have the potential to affect our industry.
Conclusion
The horticulture industry has weathered numerous challenges, from natural disasters to economic downturns. Growers are using various strategies to overcome labor shortages, including automation and advocacy for immigration reform. Growers who understand shifting consumer preferences, adapt, and innovate are positioned to thrive in the years to come.
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