June 2006 Big Grower

Survey Says: Realistic Statistics By Meghan Boyer

To provide a current and detailed assessmentof the floriculture industry, GPN magazineand OFA — an association of floricultureprofessionals — teamed up to produce the2006 GPN/OFA State of the Industry Survey. The surveyhighlights grower demographics, revenue, purchasingintent, industry issues and other marketrelatedtopics. Its purpose is to bring growersup-to-date information about their industry. Fromthe information, industry members can understandmore about their peers, possibilities for the futureand issues affecting the industry.

Some of that information is included below;additional information will be presented during theOFA Short Course (see sidebar, page 32) and inquarterly articles in GPN. These highlights belowrepresent some of the statistics that may be mostinteresting and helpful to you, the big grower.

Profiling The Average Grower

The average grower has beenwith his or her current business forroughly 11 years, with nearly halfremaining for 15 or more years.The average age of respondents isapproximately 49 years, with mostrespondents' ages falling between40 and 59 years. Most of those surveyed(65 percent) classified themselvesas an owner and/or presidentof a company. Others wereinvolved in production (18 percent)or sales and office management(7 percent).

Of the respondents, 76 percentbelong to a state or national tradeassociation. The results showthe likelihood of a grower beinga trade association memberincreases with a business'sgross sales: About 93 percent ofgrowers with gross sales of $5million or more have an associationmembership, and 51 percentof growers with gross salesless than $50,000 do.

The average grower's companyhas been in business forroughly 32 years: Thirty-ninepercent of those businesses arewholesale only, while 38 percentare wholesale and retail.

Handling Merchandising Responsibilities

Nearly half of those surveyed (or theiragents) are responsible for merchandisingand/or care of the products they supply toretail. Growers have mixed feelings about theidea, with some viewing merchandisingresponsibilities as an opportunity while otherssee it as a burden.

On the survey, one grower indicated thatretail outlets should have to provide care andanother felt ill equipped to handle merchandisingbecause of a lack of training. Those whofeel merchandising responsibiltiy is an opportunitymentioned that a grower can gain betterquality control of products and a more thoroughunderstanding of consumers' needs.

Seventy-eight percent of growers with grosssales of $5 million or more who are responsiblefor merchandising and caring for their productsprovide the services at the retail level themselves.Twenty-two percent of them do not, whichindicates an increased use in services such as thirdpartymerchandisers who take care of merchandisingresponsibilities on behalf of growers.

Average Gross Sales

A high number of large growers responded tothe survey, and that proportion carries over intothe average gross sales statistics. Our surveyshows that gross 2005 sales for respondents averaged$4.8 million. Fifteen percent of those surveyedhad sales exceeding $10 million; 10 percenthad sales exceeding $25 million. Slightly morethan half had sales below $1 million.

Standardizing Container Size

The survey addressed the currentdebate over standardizing containersize. At this time, the industry has nocontainer standards, and 40 percent ofsurvey respondents feel there is not aneed for them. The 60 percent ofrespondents who do advocate consistentcontainer size point to more transparencyat the consumer level, easierspace planning and the ability to shipinto multiple regions. The majority ofrespondents in all gross sales categorieswould opt for standard sizing.

Marketing Initiative Interest

The idea of creating and supporting an industry-wide marketing initiativeis not a new one; it has floated around the industry for manyyears. The survey was used to gauge grower interest in making anotherattempt at bringing growers together for such an initiative.

Roughly one-third of growers, certainly a minority, would be willingto financially contribute to the initiative. Additionally, 69 percent ofthose who responded positively would be willing to contribute only 1percent or less of their annual salesto the cause, which shows that eventhough some growers support theidea, few would be willing to pay asizeable levy to see it come tofruition.

Willingness to contribute did,however, increase along with grosssales. Twenty-two percent of thosewho take in less than $50,000responded positively to the idea,while about 42 percent of largergrowers with gross sales of $5 millionor more accepted it. Size hadlittle influence over the amountinterested growers would be willingto contribute. A clear majorityof all gross sales categories wouldcontribute 1 percent or less of theirannual sales.

Using Immigrant Labor

The survey reveals an industry trend most people"knew" existed: Floriculture relies heavily on immigrantlabor. On average, immigrant laborers represent 23 percentof the total workforce for those growers whoresponded to our survey, and large growers are even morelikely to rely on immigrant labor. For responding growerswith sales of $5 million or more, immigrant labor is almosthalf of their workforce.

Production And Size Breakdown

Overall, bedding plants were thelargest crop produced in 2005; theymade up an average of 32 percent ofall crops. This was followed by pottedcrops (22 percent), herbaceousperennials (14 percent), woodies/nursery crops (10 percent) and vegetabletransplants (8 percent). Evenwhen the averages are broken downby growers' gross sales (see right),this distribution of product remainsapproximately the same. Most grosssalescategories follow the overallaverage trend where bedding plantsare the most produced crops andvegetable transplants the least. Theexception to this is vegetable transplantsfor growers with gross salesless than $50,000. For these growers, vegetabletransplants represent a larger portion of their productionthan annual bedding plants and herbaceousperennials.