Syngenta's plan to sell its flower seed business is a sign of a trend towards lower seed use in the ornamental industry, say experts.
Switzerland-based Syngenta generated 4.6 per cent of its $15.1bn sales in 2014 through flower seeds.
The agrochemical company plans to concentrate on its higher-margin Lawn & Garden unit, which generated $325m in first half sales, and on pest management.
Syngenta said: "Divestment would enable the new entity to play a leading role in the consolidation of the home gardening market, which is taking place in response to changes in the distribution and retail channels driven by shifts in consumer preferences."
Jersey Plants Direct commercial development director Ian Riggs said: "This is a possible example of decreasing commercial flower seed sales, away from being for pack bedding to preplanted containers - flower seed requirement, a trend especially in the USA, is a pattern we are increasingly seeing in Europe."
He added: "The importance of variety is decreasing and there are alternatives to premium series at lower costs. So long as appearance and performance are 'adequate', they offer savings. No series has achieved consumer recognition or become a desired, marketable brand - the only possible exceptions being Surfinia and maybe Sunpatiens."
Riggs added that the retail market for especially pack bedding has become a price driven "commodity" sector dominated by large retailers, with "the costs and time associated with improved plant breeding for improvements that are small scale in production and not perceived or appreciated by consumers are becoming difficult to justify." He said: "The market place contains many excellent for example Pansy series such as Delta, Dynamite and Matrix, the fundamental base differentiator is price.
"Decreasing demand, competition from lesser known series with adequate performance and price pressure on growers have all contributed tostress in the seed sector."
Company strategy - Expansion unaffected
British Protected Ornamentals Association chairman Simon Davenport said: "Syngenta are accustomed to making strategic changes in their companies and that does not seem to affect the commercial service that they offer to UK growers; they continue also to be members and supporters of BPOA. They are market leaders and they will continue their practice of expanding their breeding efforts in vegetative and seed raised material for ornamentals business. We know the sector does not easily yield high margins and they understand their need to focus on areas with higher potential margins."