Signs of life

In early fall we took the pulse of the industry to review this year’s sales and profits and to get a glimpse of growers’ plans in 2013. Some of the revelations in our 2012 State of the Industry research were encouraging. Sales are up, although it’s not by a huge margin, and the majority of respondents believe sales will continue to grow. This data point is a bit of a contradiction to the 49.5 percent of growers who said they’re “somewhat confident” that the market for nursery products will grow in 2013. But that’s a more positive outlook than the 35 percent who are “not confident at all.” Let’s take a closer look at some of the results of our research.

Sales and profits
It was reassuring to learn the majority of those surveyed realized an uptick in sales between 1-10 percent, followed closely behind by a reported 10-20 percent increase in sales. About 10 percent said sales were flat, while almost 5 percent dealt with sales decreases of 1-10 percent. In total, the gains were higher than the losses – 49.5 percent reported increased sales and 40 percent experienced a decrease.

A whopping 66.3 percent anticipate sales to increase in 2013, while 26.9 percent expects sales to remain the same and 6.7 percent believe sales will drop.

Hoffman Nursery in Rougemont, N.C., initiated a more aggressive marketing plan in 2012 to boost sales.

“We concentrated on our existing customers to make sure they had great product to start the season, growing information to finish what they received, and marketing material to help sell their product,” said John Hoffman, company president. “We believe customer service can make the difference in keeping our customers satisfied and loyal.”

About a quarter of respondents said they don’t pre-book orders, but 28.2 percent said pre-bookings stayed the same in 2012 compared to 2011, and 11.7 percent said pre-bookings were up this year.

While a quarter of those surveyed said profits have been flat the last three years, 17.5 percent said profits were up. More than half believe profits will increase in 2013. Growers identified “offering a better product mix” as the best way to retain or improve profits. As for profit margins, 29 percent identified their numbers between 6-10 percent. Unfortunately, 12.6 percent revealed they’re not profitable and even more troubling were the 8.7 percent who answered “I’m not sure.”

But there’s good news. Growers may boost profits by successfully articulating their value proposition.

Read the rest of report here: http://www.nurserymanagementonline.com/nm1112-state-of-industry-planning.aspx