Horticulture Trends Within Your Control in an Uncertain Economy

It’s easy to get caught up in the geopolitical trends in our daily news and social feed cycles. Of course, those issues are very important to be aware of and interesting to talk about, no matter your political persuasion. Tariffs, interest rates, price of fuel, regulation, policy changes, and other factors are all vital considerations we must plan around over the long term. But they also have one thing in common: They are very hard for us to impact at an individual level, both as business owners and as an industry.

We have smart and capable folks in place within our industry who are working on those important issues on our behalf. Meanwhile, our attention should be on the things we can control and the impact they have on our businesses.

Next, we must focus our time/mind and resource/capital investments on business actions that deliver the most significant impact with the highest chance of success while requiring the fewest resources and offering the greatest control over business outcomes. Sounds complicated, but read that sentence a few more times.

Under the assumption that nobody is really qualified enough to give solid advice on the geopolitical issues at hand, here are a few things to think about, even as you are in the middle of your spring season.

5 Key Trends

We have identified five key trends in the market over the last few years (some new, some tried and still true) that probably impact your business. The following items each have a clear action plan ready for execution.

If you haven’t tackled all five areas in your business, chances are you may be losing ground to competitors who have. And you don’t have to be a direct supplier or retailer of live plants to be impacted; any business in the horticultural supply chain can focus work on these areas:

1. Quality is Still King! According to 2024 consumer research by Metrolina Greenhouses’ Home Garden Panel, 71% of consumers say they have left a garden center without making a purchase. 71%! And half of those consumers say the reason they left is because of poor quality.
2. Houseplants Capture New Consumers. The foliage/indoor plants category has replaced vegetables/edibles as the “gateway” to live goods for consumers. This is great news, as new consumers will more likely experience success on their first purchase this way.
3. Home as an Office/Entertainment Venue. Work from home is still strong, and businesses are not going back to the 100% in-office model. Currently, only 42% of offices are at full capacity. The opportunity is clear: Be purchase-ready seven days a week to accommodate consumers.
4. E-Commerce Is Growing. While our industry has been slow to adapt, consumers continue to move online in their purchase habits. Online sales of live goods are more prevalent in the seeds/bulbs/trees/shrubs/foliage categories thus far, but they are growing three to five times faster than in-store sales.
5. AI Is a Reality. Artificial intelligence is here to stay. But for our industry, it is about predictive analytics, not generative AI. You aren’t likely to get replaced by AI, but you could be replaced by someone who knows AI.

Innovate or Stagnate

Three things about our industry have remained unchanged:

1. To survive in the horticulture industry, it takes hard work, calculated risk, and innovative thinking.
2. Our industry is more than likely to have 10 fewer greenhouses this year in the industry than 10 new ones.
3. Outside of a few parts of the industry, horticulture is not a high-net margin business.

However, we are also part of an industry that is secure and represents a strong investment opportunity for three key reasons:

1. We are not likely to be replaced by overseas production of finished goods like many other industries have experienced over the past 20 years.
2. It is unlikely that any technology will rapidly replace our model of consumers enjoying plants and their benefits.
3. As we all know, the industry has high barriers to entry due to the high cost of starting a greenhouse or farm.

Ultimately, our business continues to grow. The ornamental live goods category grew from $8.2B to more than $11.0B during 2020-2021. The live goods market has grown 1% per year in the last three years, showing no giveback since the pandemic. But like always, that 1% remains choppy, as we have up years and down years based on regionality and weather trends.

Given all of this, how do we navigate and thrive in an uncertain economy? Go back to basics and focus on what you can control. Start by understanding the consumer mindset and identifying where your role allows you to invest your time, mental energy, and financial resources for maximum impact.