Earlier this spring, all signs suggested that the nursery industry might be in for a rough ride.
In early March, the World Health Organization announced that COVID-19 had become a global pandemic. Soon thereafter, states began declaring emergencies, closing schools and limiting large gatherings.
Then came the stay-at-home orders and the closure of non-essential businesses, which in many states initially included nurseries and garden centers. Uncertainty led many wholesale nursery customers to cancel or postpone their orders during what’s usually the peak sales season. Retail outlets braced for big losses without being able to host the traditional spring plant sales that account for a big chunk of their annual business.
Nurseries were expecting the worst from COVID-19.
“We really had no idea what to expect,” said Marc McCormack, director of sales and marketing for Minnesota-headquartered Bailey Nurseries. “I think many of us felt like, if we were going to shut down as a country, people weren’t going to be buying our products or even be able to buy our products. It wasn’t looking good.”
But after the initial alarm, things took a somewhat unexpected turn.
In places like Oregon, Michigan, Illinois and elsewhere, governors eased up on nurseries and garden centers, allowing them to stay open or reopen. Wholesale customers who’d held off on their orders pulled the trigger anyway, feeling the push from their own customers who needed to get inventory in their ranks. And people who were staying at home to tamp down on the spread of the virus found themselves with more time to tend to and beautify their own personal surroundings.
“Fortunately for our industry, things have ended up going well,” McCormack said. “Wholesale and retail seem to be selling, people are buying plants to improve their homes. In terms of overall demand, we’ve seen significant increases. Now, we don’t know how long that’s going to continue, but it’s been a pleasant surprise.”
The COVID-19 pandemic has certainly thrown 2020 for a loop. Like other industries, the nursery sector has been impacted in unique ways. But the industry has been able to adapt to the changing reality relatively quickly, and despite the challenges that have come along with the pandemic, the immediate outlook doesn’t appear all that dreary.
In fact, from improved communications and technology utilization to jumps in customer demand, the nursery industry just might come out of COVID-19 a little stronger than before.
To be sure, COVID-19 was not a welcome visitor in the nursery industry. When it hit, nurseries, like other businesses, had to implement physical distancing measures right away. While doing that in the fields presented fewer problems, having to distance people in shipping and production areas or on shuttles to get to the fields meant that it took longer to get things done. For Bailey, that required increasing hours for some workers and shifting to a seven-days-a-week schedule just to keep up with demand.
The closing of the border between the U.S. and Mexico, in response to the pandemic, also made it harder for agriculture workers with H-2A visas to come into the country just as their labor was in high demand. That made it harder for some nurseries to harvest and for others to accept and process inventory.
Rich Bailey, national sales manager for the wholesale tree grower J. Frank Schmidt & Son Co. (JFS) said the early uncertainty and the swiftness of the COVD-19 response made for challenging times initially. He said some customers reduced or canceled their orders early on, while others chose to postpone for a few weeks to see how things played out.
“We’re very fortunate to have massive cooler capacity, allowing us the opportunity to hold material longer than typically scheduled to ship,” Bailey said. “We wanted to help customers and advised to postpone rather than cancel. After letting the dust settle a bit, this proved to be the best decision we could have made for our customers.”
At Fall Creek Farm & Nursery, a blueberry plant and genetics operation headquartered in Lowell, Oregon, co-CEO Cort Brazelton said office employees have been working from home, while employees who work in the fields and on-site have had to follow new distancing policies, work on smaller shifts, clean and disinfect more and wear masks. Like other companies, Fall Creek also felt the pinch of the shortage of personal protective equipment (PPE) during the pandemic’s early days.
“For a while, none of us could get PPE,” he said, “so various members of our team who knew how to sew went from all office work to about 50% of their time sewing masks. Everyone who could sew was making masks to help keep our people safe.”
Navigating the COVID-19 seas
Although the onset of the pandemic caused some waves for nurseries, for many, the waters were navigable. Once the physically distant, work-from-home and other measures were in place, nurseries were able to work there way back to a more normal pace of business.
Bailey said many of JFS’s customers who’d postponed their orders for a few weeks ended up going through with them.
“Many of our customers remember the last recession and future impact of choosing not to plant,” he said. “They know if they don’t have trees, they can pretty much guarantee they won’t have the sale. Although we saw some order reductions, many were taking advantage of the increased availability and adding to their orders.”
Bailey also said it’s become more important for the company to stay in regular and expanded communication with customers, including through technology platforms like Zoom.
“Although we communicated well, we’ve certainly learned more about how important communication is, both internally and with our customers,” he said.
At Bailey Nurseries, McCormack said that despite the initial bumps from COVID-19, customer demand has remained strong and that one of the biggest challenges is just keeping with up that demand. Anything that is in bloom, including the company’s Summer Crush® hydrangeas, has been incredibly popular with consumers who are tending to their homes during the shutdown.
“We have a finite amount of people, a finite amount of dock space and a finite amount of supply,” he said. “We actually probably could have shipped more than we did, but we were just limited. It’s not a bad position to be in.”
From a financial perspective, it largely appears that the nursery industry hasn’t been overwhelmed by the pandemic yet. Mickey Hatley, branch manager for Northwest Farm Credit Services (NFCS), said it seemed like nurseries were holding up pretty well compared to folks in the dairy and wine industry.
“We have been pleasantly pleased,” he said. “On the nursery side, we’re not seeing a rush on credit. Everybody’s operating on their standard lines of credit.”
Hatley did say NFCS has been consulting with some nurseries on the federal Paycheck Protection Program, and it has put in place some payment deferral programs, but otherwise there hasn’t been any significant disruption.
“I think the question that is starting to surface now is what impact this will have this fall or on the next shipping season,” he said. “Will we see a drop-off? I don’t have a crystal ball.”
On the horizon
The future is, of course, what is causing the biggest worries for the nursery industry. Brazelton, of Fall Creek, said he expects business to be down a bit in the next two years, but not precipitously. Much of any slowdown, he said, will be linked to the lost efficiencies caused by the pandemic response.
Bailey said relationships with customers are stronger than ever, and their inventory demands help them fine-tune production as JFS begins strategically planning for 2021 and 2022.
According to McCormack, Bailey Nurseries isn’t looking to expand in the coming two years, but it’s doing its best to plan what it needs to plant to meet demand long-term. It’s a little difficult to look out too far, but he said he feels like Bailey is in a good spot for the present and well-positioned for the future, COVID-19 or not.
“I think we are all still going through this,” McCormack said, “but I think as human beings we are all getting more comfortable and more confident. Real confidence may not come until there’s a vaccine, so until then people will be staying closer to home and they’ll be happy to make their homes even nicer. Thankfully that’s a big part of what our industry is all about.”
Jon Bell is a freelance journalist based in Oregon who writes about everything from craft beer and real estate to the great outdoors. His website is www.jbellink.com. He can be reached at email@example.com.