Consolidation continues in the nursery sector as growers seek to keep up with retailers' pricing demands, as Horticulture Week reveals its updated list of the top 30 nurseries by turnover.
David Ball, managing director at supermarket supplier Neame Lea, says consolidation is increasing because of cost pressures caused by exchange rates and because retailers are unable to increase prices. Investing in sites such as the £10m Neame Lea Horsehoe Lane is the way to reduce overheads, as is adding sites such as nearby VP, he adds.
Branching out into more trading spreads risk but "most traders where we buy plants and flowers from Holland, the exchange rate is pushed on", says Ball. Currency is difficult to forecast, he points out, with HSBC predicting parity between sterling and the euro and Barclays predicting a rate of £1.30. "Everyone's got to hedge. There's too much volatility to predict," he says.
"The biggest thing we're seeing is consolidation of the supply base. Customers are looking to have fewer suppliers who give bigger volumes and expect better prices. We've always focused on producing plants as cheaply as we can. If you have a big range of customers it's quite expensive to supply all of them. That's why we've got flowers and herbs. Poor weather doesn't affect cut flowers or culinary herbs.
"For Tesco, Morrisons or Aldi, if you produce as efficiently as you can, they're not really able to go anywhere else." Ball adds that Neame Lea will reach close to £40m turnover in the 2017 calendar year - up 10%.
Lovania and Chessum are suppliers who are growing turnover in the latest top 30 list (see box), having broadened operations. Lovania has taken over young plant producer Seiont to add to its turnover. In its recent accounts for the year ending 31 March 2016, Chessum said it intends to grow its position to gain greater market share in the "highly competitive sector, where sales are focused on delivery of quality products to the end retail customer". Turnover rose by £4m to more than £10m and net profit doubled to £255,578.
The £7.97m turnover Ornamental Plants went into liquidation in January 2017 so has dropped off the list.
Hillier managing director Chris Francis says the Hampshire grower has upped wholesale sales as it works on developing new plants. He has also seen some benefit from preferable exchange rates and good autumn 2016 weather. Since the start of the financial year on 1 September 2016, wholesale nursery sales are up 14.5%, he adds. "We had a great autumn for weather for gardeners. We're a traditional plant business so we have done extremely well with nursery stock and bedding."
Francis says the large increase in nursery sales shows how a British nursery is starting to take the "big opportunity" that Brexit-led exchange rate changes have brought against overseas suppliers. Hillier plans to bring a lot more new plants to market, "which is where we have lost out in the last few years. We've got a bit staid. We have fantastic skill levels but we have not used them to our full advantage."
TOP 30 - UK NURSERIES BY TURNOVER
1. Newey Group - Turnover: £38m
Alex Newey's Warwickshire-based Newey Group now incorporates Avoncross Ornamentals, Eagle Plants, Evergreen Events, New Forest Plants, New Place Nurseries, Omni Solutions, Roundstone Nurseries, Transflora, Whitehill Seed Co and Young Plants. Newey suggests the group will see a 4% year-on-year increase for 2016-17.
2. Neame Lea/Zyon UK - £36m
Bedding and herb grower/supplier run by David Ball in Spalding. Now a partner and shareholder in Zyon UK Flowers & Plants. Projects £40m turnover in 2017.
3. Keith Butters - £31.52m
Andy Coaten runs 19.5-acre nursery in Spalding as well as trading plants and flowers retailers.
4. Ball Colegrave - £25.316m
Oxfordshire-based young plant grower run by Sandy Shepherd. Founded in 1962 as Colegrave Seeds before joining forces with US company Ball in 2001.
5. Winchester Growers - £23.957m
Figures to 31 March 2016. Firm split into Lincolnshire and Cornish (daffodil) businesses in 2014.
6. Coletta & Tyson - £22.75m
A 162ha East Yorkshire family-run bedding grower and garden centre.
7. Double H Nurseries - £21.98m
Flowering houseplant nursery in Hampshire run by Neil Stevenson.
8. Farplants - £19m
Hardy and perennial co-operative including Binsted, Fleurie, Star Plants, Toddington and Walberton.
9. Evergreen Exterior Services - £15.7m
Surrey-based wholesale nursery stock supplier.
10. David Austin Roses - £15.6m
Family-run rose grower and breeder in Shropshire.
11. Lovania Nurseries - £15.3m
Lancashire-based grower run by the Ball family. Latest accounts show turnover up by £2.5m.
12. OA Taylor & Sons - £13.27m
Family-run bulb grower based in Spalding that has seen turnover rise.
13. Allensmore Nurseries - £12.354m
Herefordshire perennial nursery run by the Taylor family. 14. Hill Brothers (Chichester) - £11.56m
Flowering houseplant nursery run by the Hill family.
15. Chessum Plants - £10.31m
Family-run grower and trader based in Bedfordshire. Latest figures show £4m increase in turnover.
16. Johnsons of Whixley - £10.068m
Hardy nursery stock amenity and garden centre grower based in York.
17. Hillier - £10m
Family-owned tree and shrub grower in Hampshire.
18. Florensis Flower Seeds - £9.499m
Breeder and propagator based at Ball Colegrave.
19. Dingle Nurseries - £9.08m
Powys-based hardy nursery stock grower run by the Joseph family.
20. Glendale Horticulture - £8.9m
Part of the larger Glendale Group. Includes Merediths, Coblands and Mahood.
21. Wyevale Nurseries - £8.66m
Hardy nursery stock grower in Herefordshire.
22. Bell Brothers Nurseries - £8.25m
Lincolnshire-based bedding and pot plant supplier.
23. Europlants - £7.6m
Hertfordshire-based Italian specimen supplier.
24. Bordon Hill Nurseries - £7.54m
Part of the Ball Colegrave group.
25. Boningale - £6.837m
Shropshire amenity nursery run by Tim Edwards.
26. James Coles & Sons (Nurseries) - £6.639m
Family-run amenity grower based in Leicestershire.
27. Volmary (formerly R Delamore) - £6.3m
Independent family-owned company.
28. W Crowder & Sons - £5.892m
Family-run amenity grower based in Lincolnshire.
29. PS & JE Ward - £5.76m
Norfolk flower farm.
30. Barcham Trees - £5.61m
Cambridgeshire tree grower.