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New economic impact data for the green industry available

May 4, 2011 by Charlie

Total economic contributions for the United States Green Industry in 2007, including regional economic multiplier effects, were estimated at $175.26 Billion in output (revenue), employment of 1.95 Million full-time and part-time jobs, labor earnings of $53.16 Billion, and $107.16 Billion in value added. Total value added impacts represented 0.76 percent of U.S. Gross Domestic Product in 2007.

The present study updates previous research that evaluated economic impacts of the Green Industry in the United States for 2002 (Hall, Hodges and Haydu, 2005, 2006). National estimates of economic impacts were derived from a variety of information sources, including national and state-level industry statistics from the 2007 U.S. Economic Census (Census Bureau, 2010), other federal government reports, and primary surveys by horticultural economics researchers. Economic impacts for each state were computed using multipliers from the RIMSII Input-output analysis system (USDOC/BEA, 2007), to estimate the indirect effects of industry purchases and induced effects of employee household spending arising from new final demand.

CLICK HERE for the full report.

Filed Under: Uncategorized Tagged With: green industry, industry statistics

National Floriculture Forum a big success!

March 26, 2011 by Charlie

This year’s National Floriculture Forum was held in Dallas, TX on March 10-11 and drew 46 participants from across academia and industry. Texas A&M University served as the host university this year. In addition to the tours, networking, and strategic planning that occurred, there were research presentations on the afternoon of the first day that highlighted various partnerships, alliances, brands, and initiatives that are being utilized by universities and industry firms across the country in order to compete successfully in the current hypercompetitive and budget-cutting environment.

A debriefing website has been developed (click here) which contains a history of the NFF, the proceedings from the papers presented, a roster of participants in this year’s meeting, as well as a listing of all sponsors this year. BTW, a special thanks to all of our sponsors — without your assistance this year, the National Floriculture Forum would have not been possible!

Filed Under: Uncategorized Tagged With: green industry, leadership, trends

Hold the date: 2011 National Floriculture Forum

September 2, 2010 by Charlie

The National Floriculture Forum (NFF) is an educational meeting of university professors, graduate students, government scientists, and industry leaders in floriculture that has been held annually for over a decade.  This meeting brings together the floricultural community to: (1) address issues of importance to the floriculture industry, (2) form collaborative relationships, and (3) learn more about the floriculture industry and from each other.  This meeting is the only one of its kind and continues to bring more members of the floriculture community together each year.  The importance of the NFF has increased recently as the number of horticulture departments and associated funding levels have decreased.

Texas A&M University is hosting the next NFF on March 10-11, 2011 in Dallas, Texas. This will provide exposure to a wide range of floriculture crops, production facilities, and climatic conditions in the Southwestern region of the U.S.  The impacts of the meeting are far-reaching:  influencing undergraduate and graduate programs at participating universities, strengthening relationships between industry and academia, and bolstering the identity of floriculture.

Filed Under: News Tagged With: green industry, trends

Columbian Cut Flower Industry Loses Leader

March 24, 2010 by Charlie

Bogotá, March 23rd, 2010. Asocolflores, its Board of Directors, member companies and employees deeply mourn the passing of Ernesto Velez, who served as the president of Asocolflores’ Board of Directors for the past seven years. Ernesto was known not only for the invaluable support he gave to Colombian floriculture in the areas of social responsibility and implementing environmentally friendly practices, but also for his drive, his business vision and the strength to endure through the toughest of times.

Ernesto Velez was also prominent for assuming the role of representing Colombian floriculture in a variety of national and international arenas. He was a member of the Board of Directors of the Society of American Florists (SAF), the American Floral Endowment (AFE), the Flower Promotion Organization (FPO), and the Colombian Society of Farmers (SAC), just to mention a few.

Last year at Proflora 2009, the “Life and Endeavors of a Flower Grower” distinction was bestowed upon Ernesto and his wife Lucie de Velez for being an exemplary floriculturist; the prototypical affiliate all trade associations would like to be able to count on – a true role model for current and future generations. This past January 2010, he was also awarded the IFAS Scholar Award from the Institute of Food and Agricultural Sciences during the Asocolflores Board of Directors meeting for being an outstanding alumnus. Terril Nell, professor and president of the University of Florida’s Environmental Horticulture Department, granted the award.

A graduate of the University of California-Davis with a BS in Agronomy and a post-graduate degree from the University of Florida in Farm Agriculture, Ernesto Velez has held many board of director positions over the past ten years with both US and Colombian farming entities. He also served as a consultant for the World Bank and the Inter-American Bank on farming development projects in Brazil, Paraguay and the Dominican Republic. Together with his wife Lucie de Velez in 1980, he founded the Suasuque S.A. company and was its manager for 30 years.

“Ernesto’s passing represents an irreparable loss, not only for his family, but also for Asocolflores and Colombian floriculture. Ernesto dedicated most of his time to Asocolflores, being proactive by fueling ideas and putting forth proposals. He represented Asocolflores with great dignity at both national and international levels”, said Augusto Solano, President of Asocolflores.

Filed Under: News Tagged With: green industry, leadership

Casey Introduces Bill to Green Urban Areas

March 20, 2010 by Charlie

WASHINGTON, DC – U.S. Senator Bob Casey (D-PA) introduced the Green Communities Act, S.3055, which would help communities create green strategies to improve quality of life, attract new business and improve the general environment in urban areas.

“Research shows that urban greening not only improves the quality of life for residents, but also attracts new business, generates economic growth and creates jobs,” said Senator Casey. “It is more important now than ever to focus on new ideas that will restore the health of our economy and will get people back to work. That’s why I introduced the Green Communities Act to assist cities in planning, designing and implementing green infrastructure strategies.”

The Green Communities Act creates a new program through the Department of Commerce’s Economic Development Administration. This program will encourage public-private partnership by contracting with five nationally recognized non-profit organizations that will provide technical assistance to 80 municipalities across the United States. After the communities have completed the technical assistance portion, they will be eligible for additional grant funding to help implement their green planning.

The Green Communities Act is endorsed by groups including: America In Bloom, Alliance for Community Trees, American Nursery & Landscape Association , National Association of Clean Water Agencies, OFA – An Association of Floriculture Professionals, Pennsylvania Association of Boroughs, Penn Future, Pennsylvania Horticultural Society, Pennsylvania Landscape & Nursery Association, Perennial Plant Association, Professional Landcare Network, Project EverGreen, Society of American Florists, Tree Care Industry Association and Turf and Ornamental Communicators Association.

The legislation has also been introduced in the House of Representatives by Congresswoman Allyson Schwartz (D-PA).

Filed Under: News Tagged With: green industry

Fewer sick days in green buildings

February 18, 2010 by Charlie

Nearly $5 per square foot per year. That’s the estimated savings by tenants of environmentally friendly buildings because of fewer employee sick days, according to a study cited by the U.S. Green Building Council. About 55% of respondents in the study also indicated that employee productivity had improved in green buildings.

Source: U.S. Green Building Council

Filed Under: News Tagged With: green industry

ANLA Management Clinic Blog

January 9, 2009 by Charlie


In order to stimulate interest in the 2009 ANLA Management Clinic, ANLA developed a one-day blog entitled Managing Through Tough Times. For one jam-packed day, industry leaders, including business owners, consultants, and editors, provided ideas for managing costs, driving sales, targeting new customers and motivating staff in the midst of strong economic concerns. Check out these thought-provoking (and action inducing) blog entries by clicking here.

Filed Under: News Tagged With: green industry, growers, retail sector, service sector

How will the current retail environment affect green industry sales in the spring?

January 9, 2009 by Charlie

Quick overview of some of yesterday’s December retail data (no real surprises):

Wal-Mart cut fiscal Q4 earnings target about 10%.
Costco posted a 4% drop in December same-store sales.
Family Dollar gained 8%; Same store sales gained 6%.
BJ’s Wholesale had 1.6% sales growth; the lowest in a year.
Sears (the largest U.S. department-store) sales fell 7.3%.
Target same-store sales fell 4.1%.
Macy’s December sales fell 4%.
Gap stores sales fell 14%.
Abercrombie & Fitch fell -24%.
Neiman Marcus reported a 28% drop off.
Limited Brands reported a 10% drop.

Also, a recent DJN press release states:

Food retailers are girding for a “battle” with vendors in the first half of the year as grocers push for lower prices to help shoppers through the recession and food manufacturers resist, Supervalu Inc. (SVU) Chief Executive Jeff Noddle said Wednesday.

With commodity and ingredient costs falling sharply in recent months, supermarket chains have been pushing for lower prices on everything from coffee to soups to help increase sputtering sales. In recent months, both Supervalu and competitor Safeway Inc. (SWY) have switched to a pricing strategy that sells more products at “everyday low prices” rather than relying on coupons or other promotions.

But food manufacturers have been reluctant to roll back their price increases, taken to offset higher input costs, despite some consumer product categories experiencing declines in sales volume of between 3% to 5%, Moody’s Investors Service said in a recent report on the sector.

Lastly, from Wednesday’s Business Week:

Shoppers are getting used to those 75 percent off sale signs, and that’s bad news for merchants who worry they will also have to quickly slash prices on spring goods to attract customers.

Anxieties about how rampant discounts have affected shoppers’ psyches and stores’ profits are running high…The deep price cuts are making shoppers question the true value of items.

My Commentary:

Obviously, all of the trends above begs the question of whether or not we are “training” consumers to be more price (discount) oriented that they have been in the past. Or, as a friend of mine put it…what is the longer-term psychological impact of the drastic price reductions of the holiday and post-holiday sales periods going to be on the going-forward consumer expectations and purchase behaviors?

Obviously, people are currently spending less than normal; certainly less than justified according to their actual incomes (they are saving more which is good in the long run but bad for the economy in the short run). They are also shopping smarter, focusing on the “value” they derive from each precious dollar spent. So as we have discussed before on this blog, those retailers that have their value proposition clearly delineated will be in a much better competitive position than those who don’t.

Without a doubt, several leading lawn & garden retailers are already positioning themselves for price-oriented competition this spring. We have always had a segment of consumers that are price-conscious shoppers and this will obviously bode well for them. Today’s economic environment may increase the number of these price-oriented consumers and the real question is by how much.

But the majority of our core lawn & garden consumer base have other things besides price in their value equation. The question is whether or not retail firms have successfully identified what THEIR key customer base truly values and are differentiating themselves accordingly.

Another key point to remember is that even though unemployment is at 7.2% (from today’s labor report), we’ll still have 93% of the workforce earning a wage. The monies not being spent now will eventually burn a hole in people’s pockets (if historical behavior holds true). It will probably take a few more months of spending declines for this hole-burning to take effect, so the economy will likely hit its low point this spring.

The key question then is whether “spring fever” will induce our core customer base to let go of those discretionary dollars burning a hole in their pockets. And, if so, will they be willing to pay the prices we must charge to cover the cost increases we’ve incurred in the last 2 years? Again, they are much more likely to do so if we appeal to their value equation.

It will also be very interesting to see how President-elect Obama’s yet-released-but-being-revamped stimulus plan is eventually structured and even more interesting to see how much of it is actually spent (historically only 20-40% of a stimulus is spent — the rest is saved or used to pay down debt). But fortunately, many folks will be receiving their tax returns about the time spring season kicks off, which means another influx of funds to burn a hole in their pockets!

Ok, now that we’ve discussed the retail environment, what does all of this mean for green industry growers? The tougher selling environment at the retail level this spring translates into a need to develop more intensive and collaborative relationships with your customers in meeting the needs of the end consumer – particularly in terms of their value proposition. During the downturn in 2008, those growers that proactively worked with their retailers (and usually these were pay by scan sales) to more closely provide landscape solutions for consumers were the ones who were most successful.

If any of you attended the recent industry webinar entitled, “It’s a Great Time to be in Business” you probably heard lots of great ideas. One of the best quotes that I wrote down during the webinar was “These are the times during which great companies are made.” Bearing that in mind, recall also that there are plenty of companies that have survived the last 50 years, which means they have gone through 11 such recessionary periods. How did they do it? By relentlessly focusing on and emphasizing their value proposition to their key customer base. There’s a great lesson there. What is yours?

Filed Under: News Tagged With: green industry, pricing, profitability, retail sector, strategy

Coping with a down economy

July 23, 2008 by Charlie

As promised, here are a few strategies to consider for coping with a down economy. Some of these steps are radical, while others are a more milder form of defense. Implement them according to the conditions you experience in your market area.

  1. Conserve your cash. Don’t spend a dime on anything that isn’t absolutely necessary to your operation. Examine every personal expense you have to find alternatives to any spending patterns.
  2. Refinance anything and everything you can. Stretch out the payments because getting cash later on will be difficult as more people will apply for loans and banks will become very picky.
  3. Work out a worst-case scenario cash flow projection that projects your company having a decrease in sales. As part of this, determine what expenses will be unavoidable. Look through your cash disbursements. Pre-plan a less expensive alternative to any expense category that you can.
  4. Know your costs well because poor pricing can put you out of business faster. Assume that cost-side pressures caused by a recession will last about two years after a recession is over.
  5. Beef up your advertising/marketing. Everyone else is cutting back. Now is the time to gain “mind share.”
  6. Slowdowns mean layoffs. Therefore, new hires become available and are sometimes available at a lower rate of pay than your current rate. Take advantage of that fact.
  7. If part of your fleet is going to be idle for some time, try to store unused vehicles and get a reduced rate of insurance due to non-use.
  8. Selling off assets during a recession is difficult. Nevertheless, selling off unused equipment reduces insurance and registration costs and property taxes. Convert anything you don’t need into cash well ahead of any signals that your area will be hard hit.
  9. Apply for credit long before you need it. You may have to “borrow” your future, and banks will raise interest rates on high-risk loans as conditions worsen.
  10. Look deeper in your own markets. Can you offer your current customer base a more diversified line of products and/or services?
  11. Review your business insurance to make sure your premiums have been adjusted for the depreciated value of your vehicles and equipment.
  12. Take a look at your estimated tax payments made to the IRS. Decreased earnings call for decreased estimated tax payments.

Cash is “king” during economic slowdowns no matter how mild or severe. Expect your customers to also feel the effect, which means they will pay you at a much slower rate than during the good times. That’s precisely the reason that you’ll need additional working capital to finance your receivables if nothing else.

Run a cash flow working capital projection using 60 days, 90 days, 120 days and even up to six months to be paid from some of your customers. How much cash do you need to survive? Find the answer to that question. Prepare and save for that eventuality and you’ll be ready for a downturn.

Filed Under: News Tagged With: green industry, landscape firms, recession, retail, retail sector, service sector, strategy

Seeley Conference Delivers!

June 26, 2008 by Charlie

Wow!

It’s been 48 hours since we closed to door on this year’s Seeley Conference and I am still chewing on some of the stellar presentations that were made.

Jim Marstiller kicked off the conference in good fashion. He is Senior Vice-President of Consulting Services for TNS Retail Forward, a leading management consulting and market research firm specializing in consumer behavior and its impact on retailers, those that supply retailers, and the economy. He is also the author of The Power to Innovate. Jim’s talk focused on growth strategies, category reinvention, brand development, and innovative merchandising solutions. For a publication that provides much of his discussion, click here.

I followed Jim on the program (not an easy task I might add) with a discussion I called Industry 2015, which focused on the driving forces and historical trends of the green industry. For an overview of that talk, click here.

That evening, Bill Lipinski, Chief Executive Officer, First Pioneer Farm Credit discussed the difficulties that many businesses had had in expanding while adjusting to the ever-changing business climate. Very few firms have done this successfully for several reasons: (1) the leap from hands-on management to delegating is difficult; (2) there is often a disconnect between strategy creation and strategy execution; (3) there is a hesitancy to change business strategy to the changes going on; (4) a lack of management systems and information; and (5) a lack of an ability to lead.

I opened the Monday morning session with a discussion of the economic drivers underlying differentiation strategies, particularly addressing the nature of perceived value on the part of our customers. Click here for more on this discussion. You can also click on the “differentiation” label on the right hand side of this blog page for more posts regarding this strategy.

The rest of the day highlighted a series of case studies illustrating firms who have been successful in differentiating themselves in the marketplace including Brian Minter of Country Garden and Minter Garden Center, who has one of the premier gardens & garden centers in the Northern hemisphere.

He was followed by Gary Mangum of Bell Nursery, who has been featured in several trade journals articles (click here). Gary discussed the Bell Nursery model and the unique and innovative ways they carry out their own differentiation strategy in servicing Home Depot.

Ball Publishing’s Jennifer Duffield White finished off the day by asking whether sustainability in floriculture is a tipping point for producers, retailers and consumers. The last morning of the conference, Peter Moran, Executive Vice President/CEO of the Society of American Florists (SAF), concluded the conference with a discussion of the draft sustainable standards for agriculture currently being proposed by SCS, the firm who is behind the Veriflora certification.

Needless to say, it was a busy 2.5 days but well worth it. If you missed the conference, the only respite you have is that your brain probably hurts less than mine right now.

Filed Under: News Tagged With: alliances, green industry, recession, Seeley Conference, strategy, sustainability, trends

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