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Economic signs look positive for holiday floral sales

Issue Date: December 2, 2015
By Kate Campbell
Prime time for sales of California-grown poinsettias has begun. Analysts say more than 70 million poinsettia plants are sold each year during the six-week period around the holidays.

Holiday sales for floral and nursery products are generally expected to be "opportunistic and intense" this year, floral marketing analysts say.

Growers and wholesale floral and ornamental plant sellers are in the thick of orders and shipping, and say whether market predictions pan out won't be known for several weeks—but strong initial demand is encouraging.

"The (sales) battle set to unfold in the coming weeks promises to be a doozy," said Meg Major, supermarket industry marketing expert for Stagnito Business Information, which publishes Progressive Grocer. "If early predictors are any indication, the fast-approaching holiday season is crammed with opportunities, particularly for those (retailers) best prepared to seize them."

The supermarket channel remains the primary outlet for retail purchases of fresh floral products, followed by stand-alone floral shops and online floral websites, and food retailers have many opportunities to "push plenty more petals as part of their fresh offerings," Major said.

That's among survey findings presented at the recent Produce Marketing Association Fresh Summit.

If 2015 ornamental flowers and plants reach 2014 levels, marketing experts said growers and sellers will have cause for celebration: In a survey of December 2014 floral sales, 53 percent of respondents saw sales increase, compared to 2013 results.

"We're seeing consumers with a bit more disposable income," said Scott Klittish of Otto and Sons Nursery in Fillmore. "Gas prices are down, housing prices are up, the economy is stronger, which gives consumers more money to spend on holiday florals and plants."

That hasn't always been the case in recent years, said Klittish, who is chairman of the California Association of Nurseries and Garden Centers.

The nursery business has struggled through the drought, he said. Hardest hit have been annual bedding plants that require more water than many permanent plants.

The 2014 wholesale value of U.S. floriculture crops declined 4 percent from the 2013 valuation, according to the U.S. Department of Agriculture. California remained the leading floral and garden plant producer of the 15 states where ornamental plants are grown, but sales went down slightly.

"Edible plants—berry vines, fruit and nut trees—have sold well and they continue to have strong sales through the Christmas season," Klittish said. "We also see good sales in herbs, for planting outdoors and to use indoors during the holiday cooking season. We're not seeing nursery plants being sold much as gifts."

The drought depressed the entire nursery sector, he said, but edibles and drought-tolerant plants continue to sell. So far this year, he said potted Christmas trees seem to be selling at last year's levels.

Although it's early in the holiday selling season, Mike Mellano of Mellano and Co. in Southern California said the sales shift is on for poinsettia and pine materials.

"Right now, our wholesale locations are up to their eyeballs in orders," he said, "but it's too soon to tell if that means an increase in the volumes sold. We've had a lot of pre-orders, but we won't really know until the end of the month how sales turned out."

Not all holiday floral sales are for indoor decorating or gifts, said Mike Vukelich, a consultant to Color Spot Nursery, the nation's largest ornamental plant grower.

The four-year drought has taken a toll on garden plant sales, Vukelich said, but noted that sales for fall and winter plants have picked up.

"Mum season was good and cyclamen sales are strong. We've been sending out hundreds of tractor-trailer loads in the past few weeks with winter and early spring plants," he said.

But a few good months during the holidays can't undo the financial damage caused by the economic downturn and years of drought, Vukelich said.

Poinsettias are the most popular potted holiday plant in the country, with more than 70 million plants sold each year within a six-week period. Nationwide sales total more than $250 million, according to university researchers.

As part of Duarte Nursery's commercial production system, 60,000 poinsettias are grown on-site in Hughson, said John Duarte, noting that poinsettias are part of the nursery's agritourism activities. Customers pick their own poinsettias directly from the greenhouse where they are grown and take them home.

"My mom runs the poinsettia operation and we have people coming in from all over the area to buy," he explained. "She grows more than 30 varieties and always has something new growing."

The survey findings presented to the PMA meeting also showed that baby boomers spend more on fresh floral products than other demographic groups, and they do so more often. The good news in the survey for farmers selling holiday florals directly to consumers is that millennials are more likely to purchase flowers and greens at farmers markets.

(Kate Campbell is an assistant editor of Ag Alert. She may be contacted at kcampbell@cfbf.com.)

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




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