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Landscape Industry 2014

THE

BIG PICTURE branding  /  advertising  /  public relations  /  communications


At Swanson Russell, we believe you can’t drive your business forward until you have a firm understanding of the industries you serve. The Big Picture was designed to give you and your team a quick overview of everything going on in the lawn and landscape business, from the most newsworthy trends to timeless resources.

Industry Snapshot This quick visual guide breaks down the makeup of the lawn and landscaping industry. Based on survey responses

Service Breakdown  Service Breakdown Number of employees: 1–5 6–10 11–20 21–30 31–50 51–100 100+

5% 3% 9% 32% 8%

18%

from lawn and landscape contractors,

25%

this data will help you better understand this audience. A list of the most relevant publications and associations is also provided, giving you another way to get into the minds of today’s contractors.

Industry Trends The enclosed trends are provided to give you

Gross Sales Gross Sales In what range were your company’s gross sales for 2013?

15%

23%

12%

a picture of the issues facing the industry. From the economy and politics to the

18%

17% 15%

impact of weather trends, this document summarizes the topics that are on every contractor’s mind.

resources

Less than $50,000 $50,000 to $99,999 $100,000 to $199,999

$200,000 to $499,999 $500,000 to $999,999 $1 million or more

Bloomberg Businessweek, (2013). Consumer Sentiment in U.S. Increases to a Five-Month High. Retrieved from website: http://www.businessweek.com. Green Industry Pros, (2013). Business Outlook for 2014. Retrieved from website: http://www.greenindustrypros.com. Hindsite Software, (2013). Green Industry Benchmark Report. Landscape Management, (2013). The Industry Pulse. Lawn & Landscape, (2013). State of the Industry Report.

In what range will 17% your company’s gross sales be for 2014? 13%

National Association of Home Builders, (2013). Developers’ Sentiment About Multifamily Market Off Recent Peak, but Remains Positive. Retrieved from website: http://www.nahb.org. NOAA National Climatic Data Center, (2013). State of the Climate: National Overview for Annual 2013. Retrieved from website: http://www.ncdc.noaa.gov. Total Landscape Care, (2013). 2013 Landscaper Social Media & Internet Usage.

20% Source: Lawn & Landscape, (2013). State of the Industry Report.

17% 14% 19%


A Snapshot of Today’s Contractor Source: HindSite Software, (2013). Green Industry Benchmark Report.

I offer the following service specializations: Lawn Fertilization Pest Control Mowing/Blowing

Snow Plowing Arbor Care/Pruning Irrigation

I offer the following service categories: Residential Maintenance Residential Installation Commercial Maintenance

Lighting Landscaping Other

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

20%

20%

10%

10%

0%

0%

Commercial Installation None of the Above

Other

Technology Usage Technology Usage Which is your primary device for accessing the Internet?

Source: Total Landscape Care, (2013). 2013 Landscaper Social Media & Internet Usage.

Which social media tools do you use? Facebook

Desktop Computer

58.2%

53.9% 44.0% 25.4%

41.5%

Laptop Computer

39.4% 13.3%

6.8%

0%

LinkedIn

YouTube

Smart Phone

16.3% 13.2%

iPad or other tablet

12.9% 0.6%

Google+

Kindle or other type of eReader 15%

30%

5.5% 45%

60%

0%

Twitter

None listed

Pinterest

Houzz 15%

30%

45%

60%


Consumer Confidence Rising Cautiously Although unemployment rates and payroll data continue to lag, consumer confidence is making a comeback. With the economy growing at a robust rate in the second half of 2013, corporate profits, a booming stock market and housing market gains have lifted the mindset of homeowners nationwide. According to the Thomson Reuters/University of Michigan Index of Consumer Sentiment, consumer outlook climbed to 82.5 after averaging 64.2 through the worst portion of the recession. As Bloomberg Businessweek declared in December 2013, consumer sentiment in the U.S. increased to a five-month high in January 2014.

Trends in Residential Buyer Behavior: •

Negotiating to get the same for less

Slowing down the decision process

Downsizing projects

Phasing projects


Market Report: Residential If you could fix one economic challenge to help your business in 2014, what would it be? (most common responses) Better candidates for open positions Customers cutting back or canceling services Access to capital Healthcare challenges Slow housing market Low consumer confidence Other

25%

24%

16%

11%

9%

Source: Lawn & Landscape, (2013). State of the Industry Report.

“The market is still very cost driven, but customers have been burned by the low‑end provider. So now there’s room for the higher‑end provider. Right now it’s a matter of the company that can deliver the best service and quality for a fair price will succeed.”

—Todd Pugh

Source: Landscape Management, (2013). The Industry Pulse.

CEO, Todd’s Enviroscapes

9%

6%


Positive Trending Continues for Commercial Markets Continuing its slow climb back to normal conditions, key indicators offer hope for commercial markets. The National Association of Home Builders (NAHB) Multifamily Production Index (MPI) shows that the industry has seen over two years of gradual growth. As a result of improving economic conditions, low price is taking a back seat, and customers are returning to a quality- and value-driven mindset.

Commercial Contractors Ripe for a Comeback: •

Improving markets

Increase in builds

Opportunity for price increases

38% Yes No

Bidding wars subsided

54

Do you plan to raise prices in the next year?

Source: Hindsite Software, (2013). Green Industry Benchmark Report.

THE NAHB MPI REACHED

IN THE THIRD QUARTER

OF 2013

The seventh consecutive reading above 50

62%

Based on a scale of 1 to 100, the Multifamily Production Index measures the sentiment of builders and developers regarding conditions in the apartment and condominium market. Any number over 50 indicates an improving business environment.

Source: National Association of Home Builders, (2103). Developers’ Sentiment About Multifamily Market Off Recent Peak, but Remains Positive. Retrieved from website, http://www.nahb.org.


Market Report: Commercial

“If you can keep the customer happy, they’re not going to go out to bid; in fact, they’re going to give you a price increase. Some customers think if they go out to bid, their prices will go up. Others say they’ve been burned by low bids, so if they’re happy, they’ll stay.”

—Bruce Wilson

Green Industry Consultant, Wilson-Oyler Group Source: Landscape Management, (2013). The Industry Pulse.


The Outlook:

Opportunities and Threats Adjusting to the business atmosphere isn’t a choice for green industry contractors; it’s a necessity if they hope to keep their doors open. Forward-thinking businessmen are always looking for ways to leverage opportunities and protect themselves from threats. Here’s what’s on their minds.

“If you feel the heat we work in, most people come in and say, ‘Oh, I can’t do that kind of work.’ Most Americans don’t raise their kids to go work outside all day. Now, kids play electronic games and go to college.”

—Chris Casselberry

Threat: It’s Tough to Find Good Help With unemployment rates decreasing and construction markets improving, the pool of quality landscape labor is limited in many markets.

Owner, Greenseasons Source: Landscape Management, (2013). The Industry Pulse.

What was your fastest growing service: Maintenance Design/Build Lawn Care

Opportunity: A Move to Diversification

40%

To replace lost revenues during the recession, many

30%

contractors turned to diversification by offering additional services like landscape lighting and snow removal. As conditions improve, these extra revenue sources continue to provide a lift for creative business owners.

Irrigation Tree and Ornamental Snow Removal

20% 10% 0%

38%

20%

18%

6%

Source: Lawn & Landscape, (2013). State of the Industry Report.

4%

3%


Opportunities and Threats

Threat: Costs Continue to Climb Beyond increased costs in fuel, equipment and supplies, new legislation like H-2B and the Affordable Care Act are now causing labor and insurance costs to climb, contributing to the

Weather Analysis January – December 2013

Temperature

bottom‑line struggle for contractors.

Opportunity: A Growing Movement Toward Water Conservation It’s not just about frugal consumers trying to cut their water bills. Many parts of the country have endured back-to-back droughts. As a result of hot, dry weather, increasing water restrictions are leading to more and more opportunities for

Record Much Below Below Coldest Normal Normal

Near Normal

Above Much Above Record Normal Normal Warmest

products and services that conserve water. From upselling to retrofitting, there are opportunities for contractors willing to lead the way.

Precipitation

Top Concerns 1. Fuel prices 2. Consumer confidence 3. Stress 4. Low-ballers 5. Weather

 6. Lower margins  7. Quality leads  8. Health insurance costs  9. Customers canceling  10. Delinquent payments

Source: Lawn & Landscape, (2013). State of the Industry Report.

Record Much Below Below Driest Normal Normal

Near Normal

Above Much Above Normal Normal

Record Wettest

Source: NOAA National Climatic Data Center, (2013). State of the Climate: National Overview for Annual 2013. Retrieved from website: http://www.ncdc.noaa.gov.


Resources

publications publications landscape

sports field

Irrigation & Green Industry News

Landscape & Irrigation

Landscape Management

Green Industry Pros

Landscape/Irrigation Professionals, Owners, Presidents and Managers of Landscaping Companies Circulation: 43,058 www.igin.com

Full Service Contractors, Irrigation Contractors, Maintenance Contractors Circulation: 41,000 www.landscapeirrigation.com

Landscape Contractors, Lawn Care Operators, Lawn Maintenance Firms, Commercial/Residential Circulation: 56,379 www.landscapemanagement.net

Lawn Care, Landscape Contractors Circulation: 57,503 www.greenindustrypros.com

Lawn & Landscape

Lawn Care, Landscape Contractors, Golf Course Superintendents, School Groundskeepers, Parks, Cemeteries, Turf Farms, Nurseries, Landscape Architects Circulation: 77,422 www.turfmagazine.com

Landscape Professionals Circulation: 72,100 Print/Online www.lawnandlandscape.com

Total Landscape Care

Landscape Design, Maintenance Professionals Circulation: 72,100 www.totallandscapecare.com

Turf

Landscape Contractor

Landscape, Irrigation, Maintenance Contractors Circulation: 2,500 www.landscapecontractor.com

Lawnsite.com

Web Forum of Professionals in the Industry Business Direct Marketing List Universe: 79,437 www.lawnsite.com

Sports Turf

Sports Complexes, Parks, Schools, Resorts, Stadiums Circulation: 22,050 www.sportsturfonline.com

Sports Field Management Sports Complexes, Parks, Schools, Resorts, Stadiums Circulation: 17,089 www.sportsfieldmanagementmagazine.com

design/architect

Architectural Record

Architects, Owners, Facility Managers, Specialty Consultants Circulation: 90,538 www.archrecord.construction.com

Landscape Architecture American Society of Landscape Architects Circulation: 19,135 www.landscapearchitecturemagazine.org

Landscape Architect and Specifier News Landscape Architects Circulation: 32,100 www.landscapearchitect.com

Land8lounge.com Landscape Architects Social Network

Landscape Architect Business

Landscape Architects, Designers, Owners Circulation: 15,000 www.labusinessmag.com

associations associations

American Landscape Maintenance Association (ALMA)

Center for Irrigation Technology (CIT)

American Nursery & Landscape Association (ANLA)

Hardscapes North America (HNA)

Commercial Lawn Maintenance Contractors Westbury, CT

Nursery and Landscape Industry Working in Commercial/Residential Washington, D.C. www.anla.org

American Public Works Association (APWA) Public Agencies, Private Companies Kansas City, MO www.apwa.net

American Society of Irrigation Consultants (ASIC) Irrigation Consultants Northern/Southern California, Southwest Chapters www.asic.org

American Society of Landscape Architects (ASLA) Landscape Designers/Architects Washington, D.C. www.asla.org

Association of Professional Landscape Designers (APLD) Landscape Designers Harrisburg, PA www.apld.com

California Landscape Contractors Association (CLCA) Landscape Contractors Sacramento, CA www.winwithclca.org

Research/Testing — Water Management Practices Fresno, CA www.fresnostate.edu/jcast/cit

Tradeshow: Hardscape Contractors and Distributors New Albany, IN www.hardscapena.com

Irrigation Association Irrigation Companies and Professionals Falls Church, VA www.irrigation.org

Lawn & Garden Dealers Association (LGDA) Small Business in Landscape Industry Tulsa, OK www.lgda.com

Nursery & Landscape Association Executives of North America (NLAE)

Executives of Nursery/Landscape Associations Raleigh, NC www.nlae.org

Outdoor Power Equipment Institute (OPEI)

Suppliers/Manufacturers of Residential and Commercial OPE Alexandria, VA www.opei.org

Professional Grounds Management Society (PGMS) Grounds Professionals Baltimore, MD www.pgms.org

Professional Landcare Network (PLANET) Landscape Industry Professionals Herndon, VA www.landcarenetwork.org

Responsible Industry for a Sound Environment (RISE) Pesticide Industry Professionals Washington, D.C. www.pestfacts.org

Snow & Ice Management Association (SIMA) Snow and Ice Industry Professionals Milwaukee, WI www.sima.org

Southern Nursery Association (SNA)

Green Industry Professionals, Horticulture Atlanta, GA www.sna.org

Sports Turf Managers Association (STMA) Sports Turf Industry Professionals Lawrence, KS www.stma.org

Tree Care Industry Association (TCIA)

Commercial Tree Care Professionals Londonderry, NH www.tcia.org

Turfgrass Producers International (TPI)

Turfgrass and Sod Industry Professionals East Dundee, IL www.turfgrasssod.org


2014 Landscape Industry Report