From the Great Recession to the Great Shutdown to the Great Conundrum
The state of the horticultural industry explained during Cultivate‘21
by Courtney Llewellyn
“After fighting together to remain essential, we proved we are,” stated Ken Fisher, president and CEO of AmericanHort at this year’s State of the Industry presentation. A full auditorium of those in horticulture showed their agreement with hearty applause.
Fisher continued that the state of the industry is very good. During a difficult period, it showed remarkable resilience and incredible innovation. He noted consumers have been spending on everything horticultural: houseplants, potting needs, annual, perennials, landscaping and more.
“Since April 2020, we’ve seen a V-shaped increase in sales,” he said. “Product volume is up, sales are up and customers are pleased. We’re in our second year of double-digit industry growth.”
AmericanHort’s motto is “perform better, grow faster and prepare for the future” – and Fisher said to do so, the industry needs the right people and the right resources. It also needs the new consumer behaviors to stick.
Of course, horticulture is not without its challenges. Growing risks Fisher mentioned include labor, taxes, regulations, transportation and environmental issues. (To that last point, he noted AmericanHort is developing a sustainability database. “We want to be on offense with this, not just defense,” he said.)
Speaking on the transition from “the Great Recession to the Great Shutdown to the Great Conundrum” was Dr. Charlie Hall, the chief economist for AmericanHort. The conundrum facing the industry now is great probable growth, but with constraints.
“There was mixed performance in the industry [during the pandemic shutdowns]: There are 16.1% fewer growers now than during the Great Recession, and 4.6% fewer retailers, but landscaping services are up 17.6%,” Hall said. “Every economic downturn has been a shot in the arm for the industry, but in every instance since 1948, when people start buying durable goods again, we slow down.”
Hall mentioned that some of the biggest issues facing growers right now are:
- The supply chain – with a huge lack of drivers, goods shortages and bottlenecks in both shipping and labor.
- Inflationary pressures – with the burden falling to consumers. “We’re projecting 11% input price increases for 2022,” Hall said. “We’re going to have to raise prices.”
- Consumer uncertainty – if there is inelasticity of demand (meaning it stays static and doesn’t increase), Hall said you’ll need to increase the perceived value of your goods and services – and continue promoting the benefits of plants.
AmericanHort’s Senior Vice President of Public Policy and Government Relations Craig Regelbrugge provided a more expansive view of the industry’s situation in 2021. He said growers need to keep sight of their reputations, their relationships, their integrity and their perseverance. “We’re not just running sprints,” he said. “We’re running marathons.”
As for public policy, Regelbrugge said, “I hope the Senate can hammer out a better package for the Farm Workforce Modernization Act, because if nothing happens, ‘difficult’ becomes even harder.”
And speaking directly to those in the audience regarding the current divisive climate that seems to be pulling at all sides of the country, he stated, “Political progress doesn’t happen at the extremes. It happens closer to the middle, which is becoming increasingly empty. Opting out is not an option.” He urged those in the industry to stay informed, get information from diverse sources, understand history and civics and accept that people with different ideas are not necessarily coming from a place of bad intent.
“Keep open eyes, open minds and open ears,” he said. “Have constructive conversations. Be engaged – it’s your personal responsibility to be a part of politics, locally all the way up to Washington.” (Coincidentally, the AmericanHort Impact Washington Summit is scheduled for Sept. 20 – 22. For more information on how to get involved, visit americanhort.org/impact-washington-summit.)
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