Four years ago, the country was in the midst of one of the most unusual and uncertain times. The COVID-19 pandemic had the U.S. on lockdown, with offices and schools closed, masks mandated and people sticking close to home to stay safe.
But that ended up being huge for the nursery industry. People sticking close to home meant that they turned their focus to their houses, yards and gardens — and the plants, flowers and shrubs that beautify them. The result: record sales for the nursery industry. In Oregon alone, nursery sales hit $1.19 billion in 2020, an all-time high — until the following year, when they climbed to $1.3 billion.
In the ensuing years, as the world returned to life post-COVID, sales leveled off, but so far, at least, the renewed craze for gardening seems to have stuck.
“All of us saw, as a result of the pandemic, a surge in sales over 2020 and 2021,” said Alec Charais, chief marketing and product development officer for Bailey Nurseries (St. Paul, Minnesota). “It transitioned, generally speaking. We still see consumers shopping at retail locations, but just not at the same levels as during the pandemic. I think now, though, that people are still more engaged in gardening than they were.”
That’s a good sign for the nursery industry, especially if the trend ends up having any legs. But there are, of course, other factors that will come into play that will impact how the nursery industry’s near future unfolds. Good or bad, what follows are a few of the blips on the radar of some nursery industry watchers and players that might be good for everyone to keep an eye on.
Inflation
It’s been the talk of the town the past couple years, and the chatter about inflation isn’t likely to die down anytime soon, especially considering November’s presidential election.
“You will hear Trump blast Biden over inflation this, inflation that,” said Charlie Hall, professor and Ellison Chair in International Floriculture at Texas A&M University, noting that inflation peaked at 9% in June 2022 but dropped to just above 3% in May. “Inflation, while still around, is not nearly as bad as it was.”
That said, Hall noted that it will be important to see what’s going to happen with interest rates. The Fed has signaled that it is going to act slower since inflation has been reined in, but any move they make on interest rates could impact the bigger picture.
Spending
![](https://diggermagazine.com/wp-content/uploads/2024/07/AdobeStock_110988345-1024x683.jpg)
During the pandemic, consumers stopped spending money on things like travel, but other goods, including nursery plants and shrubs and other discretionary items, sold like hotcakes. Hall said people are spending more on recreational goods — think cars, car parts and services like gym memberships — and travel spending has picked up markedly since the pandemic. That’s good for nurseries, but it could be better, Hall said.
“As long as discretionary spending keeps up for things like flowers and shrubs, that’s a good thing,” he said. “But we have not been successful at making people think those are nondiscretionary, which we need to do a better job of.”
Also, people have largely burned through any excess pandemic-related funds, like stimulus payments, and they’re starting to use their credit cards more. That’s nothing to be alarmed about but, Hall said, it could get to that point.
“We are not quite to the point where consumers are leveraged as much as they were, but it’s something to watch,” he said.
Social media
Like it or not, social media is here to stay. But from the constant changes at X based on the whims of Elon Musk to the uncertain future of TikTok — it could be banned in the U.S. later this year — platforms are in flux, as are the attitudes and engagement levels of the people who are on them.
Katie Dubow, president of Garden Media Group, said some older social media users may be getting tired of the channels; some may have even bailed on them altogether.
“I think it’s a thought in the back of a lot of people’s heads,” she said.
So does that mean that nursery-related businesses should pull the plug as well? Not according to Dubow. Instead, it might be time to find ways to get more creative with social media, websites and apps. She noted that people are very social within apps like the book-focused Goodreads or the running-related Strava, and conversations that lead to product recommendations are common. There may be opportunities for nurseries to find niche audiences in similar spaces.
Dubow also said nurseries and retailers should do what they can to foster engagement with their customers online.
“People are always looking for places to engage with other people online,” she said. “If you’re a garden retailer, a nursery or someone with an interest in that niche, maybe you have a section for community on your website or even a comment section where conversations can start.”
Branding
In the big field of nurseries these days, it can be hard to stand out if you’re just growing run-of-the-mill plants. One way to differentiate in today’s crowded market — and capture those discretionary dollars that are still being spent — is by offering branded plants that not everyone else has.
Bailey Nurseries has done that well through its First Editions® and Endless Summer® brands of plants, including hydrangeas, lilacs and azaleas.
“Brands continue to out-perform generic products. We see that in how consumers are shopping and also in market research,” Charais said. “Even though we’re in a somewhat volatile market, shoppers are generally willing to pay for quality, and consumer brands like ours are highly visual and stand out on the shop floor.”
It’s a strategy that’s worked well for Bailey, which introduced its first branded plant 20 years ago. The company also has its own breeding arm, Bailey Innovations, that develops new plants to add to the Bailey lineup.
“Our focus is to make sure we are bringing exceptional plants to market, not a lot. It’s quality over quantity,” Charais said.
Bailey is continuing that strategy with the introduction of a new hydrangea called Eclipse® and another called FlowerFull™, both of which are part of First Editions®.
“We’ve been very fortunate to have new innovations from breeding that really stand out in the market,” Charais said.
Housing
![](https://diggermagazine.com/wp-content/uploads/2024/07/20231211_0345-1024x683.jpg)
People love their homes and they love their landscapes and gardens. So it’s no wonder that the housing market has a huge impact on the nursery industry. And right now, housing is strong, as is the demand for it. According to tax and audit consultant RSM LLP, the U.S. needs 1.7 million housing units annually between now and 2030 to close a gap in housing. Last September, the U.S. Census Bureau reported that housing starts were on pace to hit close to 1.5 million by year’s end — a solid number that still came up short.
“Housing is still strong, we just don’t have enough of them,” Hall said, noting that homebuilders have been wise in offering incentives that help buyers avoid some of the pinch that’s come from higher interest rates.
Fueling the demand for housing is, in large part, a wave of younger first-time homebuyers who are looking to put down some roots. There are some 50 million people in the U.S. between the ages of 25 and 35, a solid demographic when it comes to the homebuying public. Helping out even more is the fact that, according to the National Gardening Association, more than 18 million new gardeners emerged during the pandemic — many of them younger and likely part of the home-seeking club.
Another piece of the housing puzzle for nurseries to keep an eye on? Homeowners associations.
Dubow noted that 84% of new single-family homes sold in 2022 were part of HOAs. And while that may have been an obstacle to home gardeners in the past who were limited in what they could plant based on HOA rules, times are changing. Dubow said legislation in places like California and Texas is opening doors to allow people to plant a wider variety of plants and not be fined by their HOA. That legislation is driven by drought conditions and the need to plant climate-appropriate landscaping, and there might be an opportunity for nurseries to play a role. “Local regulations are changing,” Dubow said. “Maybe there’s a way nurseries can figure out how to be part of the change.”
From the August 2024 issue of Digger magazine | Download PDF of article