Nurseries say signs point to improved sales

This customer at Yamagami's Nursery in Cupertino snapped up some spring tulips while plotting his purchase of annuals for summer garden color. California's commercial nursery plant farmers say they hope customers will increase their purchases this spring.

Following a sluggish couple of years, people in the nursery business say they're cautiously optimistic sales will bloom this spring. Although the sector remains strong, commercial growers and retail garden centers say the economic recession has hurt sales and caused some growers and retail operations to go out of business.

"After two to three years of not doing yardwork, we're hoping a lot of people will get out and spruce up their yards," said Norm Groot of commercial grower Monrovia Nursery. "With the economy improving slightly, there may be some discretionary dollars to do that."

Whether those dollars flow into home landscaping depends upon the weather and upon how spring unfolds in California and across the country, he said.

"If we continue having cold, dreary weekends, it won't be very appealing to go out and do the yardwork," said Groot, who is a California Farm Bureau Federation director.

How hard the recession has hit the nursery and greenhouse sector varies from type of product to location to customer specialty, nursery and landscape experts say. Those growing for the landscape sector have seen sales drop more dramatically than the retail sector, as building and development screeched to a near-halt. Growers serving large retail stores also have seen sales plunge.

With a farmgate value of more than $4 billion, nursery and greenhouse products represent the third most valuable agricultural commodity produced in California. And, when retail sales are added, the sector generated more than $17 billion in 2008, according to the most recent government statistics.

"Right now, our orders are looking good for the spring and we're upbeat about selling through," Groot said. "With a couple of good weekends in a row, we hope we'll see some activity at the garden centers."

At Yamagami's Nursery, a full-service garden center in Cupertino, early sales of fruiting trees—citrus, stone fruit and nut trees—have done well. Berry vines also showed strong sales in recent weeks.

"It really gets busy here in the spring," said Carolyn Villa Scott, Yamagami Nursery horticulture consultant. "And, we're beginning to see some encouraging new trends. We'll have to wait and see if they continue."

Villa Scott said the "edible" plant category is the only one that appears to be growing strongly. Customers are snapping up bush blueberries, vegetable plants and fruiting trees. Early sales show the trend gaining strength. She attributes sales growth in that category to the economy and consumers' emphasis on healthy eating.

"People, more than ever, want to know what they're eating," she said. "Then there's the whole foodie movement with the emphasis on cooks' gardens and fresh herbs. We think a growing interest in food safety and security, along with the satisfaction of growing your own food, is driving the renewed interest."

Last week, Yamagami's was transitioning to ornamental landscaping plants from dormant plant stock like trees and vines, and was preparing for the arrival of truckloads of annual plants—petunias, geraniums, daisies, pansies, marigolds, snapdragons and stock.

California's Color Spot Nursery also is gearing up for the spring sales rush, and nursery consultant Mike Vukelich said, "We're ready. But the business is getting smaller because consumers aren't buying plants like they did decades ago. We saw the market shrinking even before the recession."

Still, he said, "we think it's going to be a good spring. We had a pretty good season for poinsettias and cyclamen, so January and February sales were strong. People seem to be buying and we hope to maintain the momentum."

Color Spot focuses on the "big box" stores, such as WalMart, Home Depot and Lowe's. Margins for commercial growers are thin with these mass merchandisers, he said, because they want to maintain low prices to consumers. A six-pack of bedding plants can sell for as little as $1.99, he said, the same price as 20 or 30 years ago.

"Even with the economy and the pressure to keep our prices low, I think we'll have a good season," said Vukelich, who is a former California Farm Bureau director. "It's starting strong and we're tracking close to our sales plan. In addition, there are a lot of beautiful new plants out. Some are so beautiful, I honestly hate to sell them."

"On the grower side, we continue to have concerns about the economic recovery," said Elaine Thompson, president of the California Association of Nurseries and Garden Centers. "Problems in the housing market have knocked the residential landscape market way down. Landscapers are big customers for certain types of growers."

From the perspective of the national economy, Thompson said horticulture experts advise those growing for the landscape market to "hold on" this year and warn against aggressive planting and expansion.

"By 2011, we should see movement in sales growth in that sector," she said. "The retailers are doing better. They have more avenues for revenue—the whole edible gardens trend, the offering of specialized services and garden art and patio furniture."

Retail sales vary by region within the state, she said. Communities in the Central Valley have been hit harder economically than some coastal areas, and retail sales in all categories reflect that.

Other factors will also affect the potential for a nursery recover, Thompson said.

"Our growers and retailers, particularly in Southern California, are concerned about water," she said.

The bulk of the state's nursery farmers and garden centers are located south of the Tehachapi Mountains, Thompson said. Although many nurseries have multiple growing operations, the state's water crisis leaves no region immune to shortages, higher water costs and unreliable supplies.

Water also has an impact on consumer buying patterns, she said.

"There is a move to native plants, succulent gardens and, certainly, smaller lawns are the wave of the future," Thompson said. "Many garden centers have added consulting services to help homeowners make transitions in their gardens, as well as advice on plant selection that reflects today's environment."

Although wholesale nursery growers say they're cautiously optimistic about the upcoming spring buying season, Monrovia's Groot said, "I've been working in the plant nursery business for 30 years and I can't remember a time when the economy has been as bad as this. Usually, we see a bump in sales during economic downturns because people stay home more and spend more time in their yards.

"This time around, with the discretionary dollars being so tight, we're not seeing that."

Nurseries treat consumers to color and selection

Pink Double Dandy

Commercial and retail nurseries promise "a lot of new color" this year, as they introduce new plant varieties in a bid to stimulate sales. Monrovia Nursery, for example, said its breeders have created more than 100 new plant varieties for the retail market.

"We have a full palate of new items we're rolling out," Norm Groot of Monrovia said, adding that consumers should look for new peony varieties, including two new additions to the company's Itoh Peony Collection—Pink Double Dandy and Yellow Doodle Dandy.

Yellow Doodle Dandy

Until recently, Groot said, peonies were difficult to propagate and too expensive for most gardeners. In the past, some peony hybrids sold for as much as $1,000 each.

"New hybridization techniques make peony propagation easier, which reduces the cost to consumers," he said.

(Kate Campbell is an assistant editor of Ag Alert. She may be contacted at kcampbell@cfbf.com. Ag Alert reporter Ron Miller contributed to this story.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.