COVID-19 has meant two banner years for nurseries, but the future’s a little foggy
Over the decades, Grace Dinsdale’s Blooming Nursery has enjoyed a fairly steady path of gradual growth. The past few years, the Cornelius-based wholesale nursery has seen solid sales increases, often between 5% and 10% each year.
For Dinsdale, who founded Blooming Nursery nearly 40 years ago, 25% growth would be considered a huge year. That’s why last year was such a shock. Sales at Blooming Nursery in 2020 were up 125% over 2019.
“It just takes your breath away,” Dinsdale said.
As most nurseries can attest, 2020 sales, particularly in the spring, were off the charts. With the COVID-19 pandemic descending upon the country, people were forced to cancel trips, work and learn remotely, and otherwise stick close to home. That, in turn, sparked a new affinity for home improvements, landscaping and gardening.
This sent nursery sales through the roof and drained inventories. It also left nurseries scratching their heads over how much they should plant for 2021 and whether or not the pandemic boom would continue to echo.
For Dinsdale and others, it has done just that. “By early May of this year, we had already sold the same amount of plants that we had sold all of last year,” she said. “The roof just came off.”
Two banner years in a row have given the nursery industry a big boost. But it hasn’t all been a walk in the park. Initial closures in the spring of 2020 created uncertainty for nurseries; booming business emptied shelves and fields alike, making it hard for some nurseries to meet demand. And planning for the future has become even more of a crapshoot than ever, as nurseries try to predict just how many of these newbie, COVID-inspired gardening devotees stick with it.
“We all need to understand what’s causing all this so we can be ready for next year and the year after that,” Dinsdale said. “It’s stronger than ever, and that’s a wonderful development. If only we had some indication of how durable it is.”
Not every nursery saw the jumps that Dinsdale did the past two years, but most have felt a boost.
“Our nurseries are reporting brisk sales,” said Mickey Hatley, branch manager for Northwest Farm Credit Services, which offers financing and banking services to the agricultural sector. “Many of them have been selling out or they’re facing a lack of availability.”
According to Charlie Hall, professor and Ellison Chair in International Floriculture at Texas A&M University, sales have been fairly solid across the board this year.
“A lot depends on which sector the growers are selling into,” he said, “but the majority of folks have had a really good spring to date. It started early and sales were strong.”
On average, Hall said growers who sell largely to big box stores saw sales rise between 10% and 15% this spring; those who sell to garden centers and the landscape trade enjoyed a similar increase. Growers who work in the green infrastructure space selling native plants and grasses have also done well.
“The story seems to be the same wherever I talk to people,” said Mike Pezzillo, vice president and Chief Operating Officer at Eason Horticultural Resources, a Kentucky-based horticultural supply company. “Everyone is doing well.”
The primary driver behind that upswell is the impact from COVID-19. According to Hall, more than 18 million new home gardeners and landscapers came into the market over the past year, spending more time and money on plants for their homes since they were, well, at home. At least through the early part of spring this year, that phenomenon was still making a difference.
“COVID has impacted people’s gardening and made them pay more attention to their yards,” Pezzillo said. “That hasn’t changed. The COVID boom is continuing.”
Bust with the boom
With that boom, however, has come a little bit of a bust. For starters, it’s been tricky for nurseries to keep their supplies up with demand. Dinsdale said Blooming Nursery had enough inventory to keep up last year. This year, she said spring inventory got depleted earlier than normal.
“Our nursery looks like it should have looked about a month from now,” Dinsdale said in early May.
The increased demand for plants has also upped the need for related materials, including pots and fertilizers. Costs for hard goods have risen; along with freight and fuel costs.
“Pots are like gold right now,” Pezzillo said. “The cause of that is twofold: There’s strong demand and the pipeline of materials is lacking, too.”
The big questions
With the busy spring season behind them for this year, growers are now looking ahead. They are having to make some difficult decisions about the future based off some unknown variables. The biggest one is whether or not the folks who jumped on the gardening bandwagon will stick with it as society begins to reopen and people can get out and about again.
Dinsdale is a little nervous. “If people got their hands in the dirt and smelled the flowers enough for biophilia (humans’ natural affinity toward nature and living things) to take hold so they now realize they enjoy gardening, will they be able to still find the time for it now that they have other options and limited time?” she said. “I’m already seeing a lot more boats and RVs and motorcycles out. How many of them are not going to find the time to garden anymore?”
Hall, too, said it remains to be seen if the COVID spike was a flash in the pan or an actual expansion of the customer pool.
“It’s going to be a banner year,” he said. “My point is, are we seeing the earliness and strong demand early in the season because of issues related to last year or is it a growth in the size of the pie? Those 18 million newbies — was it a one-off or are they going to stick with it? That’s what we don’t know, but we’ll sure find out by the end of summer.”
Not knowing what the future will bring makes it difficult for nurseries to plan for the next season. Dinsdale said she’s looking back at 18 years’ worth of sales data at Blooming Nursery to help inform her planting plans for 2022 and beyond.
But data from this year and last is wildly different than her prior averages. For example, she said Blooming Nursery has sold an average of 50 flats of a certain plant per year over the past 15 years. This year, those 50 flats were gone in 12 weeks. Dinsdale said at that rate, she would have needed 175 flats to keep up.
On the flip side, she also said she wouldn’t plant that many for next year based off this year’s numbers.
“I’m feeling like we need to increase our numbers, but then dial it back a bit,” Dinsdale said. “You have to consider how much risk you can tolerate.”
Hall said nurseries would be wise to not use 2020 as the basis for planning for future seasons. There will likely still be some of the new demand to consider, but he said a better overall approach would be to take the average of the past three years and maybe add 10% to 15% to that.
“That would be more prudent,” Hall said. “It could turn out that maybe you were wrong, but I would rather be conservative in my planting. There’s one thing I’ve seen over the years: Growers are very adept at turning a shortage into a surplus in a short amount of time. Everybody starts planning the back 40, and lo and behold, you’ve got a surplus to deal with.”
Jon Bell is an Oregon freelance journalist who writes about everything from Mt. Hood and craft beer to real estate and the great outdoors. His website is www.jbellink.com.