What do you do when you want to get a pulse on the current and future economic environment for the green industry? Three words: Ask Dr. Hall.
That’s Dr. Charlie Hall, AmericanHort’s Chief Economist and Professor in the Department of Horticultural Sciences at the Texas A&M University, who kicked off the second full day of Cultivate’24 on Monday, July 15, with a green industry economic update. Hall was joined by Matt Mika, AmericanHort Vice President Advocacy & Government Affairs, who offered an inside Washington perspective, as well as AmericanHort President and CEO Ken Fisher, who offered his take on the state of AmericanHort today.
Here are seven insights from Hall’s presentation.
- Based on Hall’s Your MarketMetrics and EAGL program survey from January to June 2024, top-line gross sales from 2023 to 2024 were flat or up for two-thirds of respondents. When compared to the pre-pandemic year of 2019, the numbers are even better. About 65% of respondents said gross sales were up more than 25% from five years ago.
- Units sold are more of a mixed bag, with 54% of respondents noting that units sold were down year to year. However, 87% of respondents also said units sold were up from 2019.
- No one spring should dictate how the future of your business performs, Hall noted. “Regardless of your customer base, the numbers have been strong. If your sales were down, you need to ask yourself why.”
- Where are costs headed? Hall predicts a 1% cost increase in 2024, and possibly a 3.2% cost increase in 2025, with labor costs being the main driver.
- If you ever needed a justification for increasing your prices, consider this: since 2007, the cost of growing plants has increased almost 50%, and at least 21% in the last five years.
- “In past recessionary periods (it should be noted we are not currently in an actual recession), we have done a poor job maintaining the consumers we gained,” Hall said. “We’ve done a much better job of that this time, which is why we should not even consider lowering our prices. Instead, we need to recommit to our value proposition.”
- If you think the current political environment has led to uncertainty and less spending, think again. “We are still spending more money today regardless of political instability,” Hall says.
If you missed Dr. Hall’s presentation, fear not. Just drop him an email, and he’ll send you a link to download the PowerPoint from his presentation.
