What’s On The Horizon?
As the calendar pages turned to 2007, GPN asked six industry experts where they thought the industry is headed. A new year usually brings new opportunities, but what kind of opportunities will be available for growers in 2007? Will they be the same as in 2006? What about hurdles? What kinds of challenges are lurking out there? Have they changed over the years, or are they the same?
The ever-shifting economy is always a conundrum for growers. This year will be no different. Labor and immigration issues are expected to be another major concern in 2007, too. Questions about energy costs will also continue to nag at growers of all sizes. This is just a sampling of what to expect.
It’s fun to speculate about the future. If we knew exactly what was on the horizon, everyone’s job would be so much simpler. Hopefully, our panel will provide you with a good idea of what lies ahead in 2007. I think you will find their predictions to be informative, educational and enlightening.
More Of The Same?
John Holmes, OFA An Association of Floriculture Professionals
Generally, there are few indications the 2007 floriculture market will be much different than 2006, which is not necessarily the best news. The total number of growers will probably continue to shrink, but the largest of growers will continue to get bigger.
One possible trend will be more contract growing, as efficiencies continue to be sought. Some greenhouse operators, wanting to keep current clients, will likely look to other growers to supplement what and how they grow. Another opportunity will be for those growers to tap into the do-it-for-me (DIFM) trend, either through their own retail/landscape division or by “partnering” with someone with that capability.
Everyone is still struggling with pricing, and that boils down to the basic economics of supply and demand. There continues to be overproduction, and the excessive supply easily meets the demand, and prices fall out accordingly. Once supply is in line, any efforts to increase demand will be that much more fruitful.
But even if supply issues are addressed, there will still be a need to get back to the practice of pricing for value, not just cost. We have unintentionally undervalued the product by thinking it was always about price for the customer. It is as much about lifestyle choices.
The issue of increasing demand is something that is getting a great deal of discussion. In 2007, there will be debate among cut flower growers about the necessity of a mandatory promotion order program. What I hope does not get lost in the discussion are the important and productive programs that already exist to improve and increase demand SAF’s Á National PR Fund, the Flower Promotion Organization, America in Bloom, Plants at Work and the American Floral Endowment to name a few. With increased financial support, all of these programs can meet their full potential. Broad marketing alone is not the answer to our problems.
The current programs have had a real impact, and a pre-set percentage of the dollars collected in a promotion order should go directly to them. Any other remaining dollars could be used for a broad marketing campaign if that was deemed necessary.
No matter what is done in the way of promotion or efforts to increase demand, everyone must assume some responsibility to do their parts. No generic program can meet the varying needs, cultures and personalities of our individual communities. That’s a major reason why OFA is developing a marketing “tool kit” to provide our members the tools and resources necessary to take charge of their own destinies.
Learning From The Past
Jack Williams, Ecke Ranch
Looking to 2007, many growers will be pleased just to have survived 2006! Who could have predicted the issues of energy, labor, pests and other challenges that have shaped the course of these past few years? While not everyone survived, the lessons learned will prepare growers for the future and, hopefully, start to turn back to the direction of profitability and market growth.
Some trends we expect to see include :
- Suppliers more actively will be “partnering” with growers to create stronger synergies for mutual sustainability. These relationships will be built in an effort to identify market opportunities that make good financial sense and reduce risk typical of so many crops. As retailers continue to push purchasing decisions further into the season, making it difficult for growers to fulfill these orders due to inadequate lead times, having strong supplier relationships will help growers respond to product fulfillment needs. Many young plant suppliers have developed product forms (QT-72, Quick Turns, Supernova, etc.) that require less “greenhouse time” than traditional rooted cuttings or plugs; it is these technologies that will be taken advantage of to help keep product flowing into the market!