Nursery/Greenhouse

Industry drivers

Plant sales increase

Strong plant sales in May and June offset a slow start to the season. Inventory levels are balanced for this time of year, suggesting product movement is favorable. Demand remains healthy despite rising plant prices. There are no reports of mergers, property listings or other activities indicative of a market downturn.

Trucking costs fall

While input costs remain elevated, nursery-greenhouse margins are benefiting from lower trucking costs. This trend should continue due to declining consumer goods retail sales and the slow restocking of inventories throughout the economy; however, operating costs within the trucking sector remain significantly above pre-pandemic levels. See our Crop Inputs Snapshot for more information.

Technology advances

The nursery-greenhouse industry is adopting new technologies to streamline operations, reduce labor demand and improve product consistency. Several advancements taking place include robotic/mechanical weeders, pruners, mowers and planters, drones to support pest and inventory management and new systems to improve recordkeeping.

Growth opportunities emerge

A recent survey conducted by Axiom highlighted several emerging trends, including: 

• Younger and male gardeners represent a growth opportunity. 
• Younger and male gardeners are spending more money on gardening.
• Big box retailers are getting a bigger share of plant sales. 

The industry witnessed a surge in customers who took on gardening and/or landscaping as a hobby during the pandemic. This new demand base appears to be holding as 80% of new gardeners reported they plan to continue into 2023. Top gardening projects include creating vegetable gardens, planting more flowering shrubs and growing new kinds of vegetables and fruits.  

Profitability

The nursery/greenhouse industry should be profitable over the next 12 months. Plant sales are strong and consumers appear willing to absorb higher prices. While input costs remain elevated, lower trucking costs are improving margins. Nursery-greenhouse businesses are investing in new technologies that will improve product quality and lower operating costs. Emerging market trends may present new growth opportunities in the future.