Horticulture Industry PREVIEW for 2012 - sectors assess their prospects

The watchword for 2012 remains 'tough' but the Olympic Games and the Queen's diamond jubilee promise a confidence boost for many in the industry, Jez Abbott, Matthew Appleby and Jonathan Tilley report.

A depressed landscape market is hoping for confidence boost from the 2012 Olympics - image: ODA
A depressed landscape market is hoping for confidence boost from the 2012 Olympics - image: ODA


Postive outlook for retail but worries persist for amenity

Growers supplying the retail trade are optimistic about the coming year, with many increasing production.

The big events of next year - the Olympics and the diamond jubilee - are expected to boost bedding sales, with many anticipating demand for red, white and blue plants.

Lovania Nurseries general manager and HTA bedding group chair Charmay Ball said orders were coming in thick and fast.

"We have increased production this year and overall we are seeing healthy increases. If we get good weather, sales will be good." She added that grow your own will still be significant. "Another trend has been cottage garden plants - it's very much in fashion."

At Bransford Webbs, managing director Geoff Caesar was also upbeat about the coming year. "We're budgeting for a growth of six per cent, based on the availability of stock and our current reserves. It's always speculative but it's backed up by our reserve orders."

Good sales this autumn coupled with a cautious approach to stocking following harsh winters in previous years could mean early demand from garden centres.

"Stock levels at garden centres are not high so there should be strong early demand and, as always, we will be quite dependent on the weather," said Lowaters managing director Ian Ashton.

He added that traditional shrubs such as buddleia and lavenders with links to bees and butterflies could be big sellers, as they have been this year.

By contrast, amenity growers are expecting a much more difficult year with little opportunity for growth. James Coles Nurseries managing director James Coles said: "It is likely that there is still going to be some expenditure with regards to schools but that is beginning to decrease. The autumn statement included funding for infrastructure and hopefully there will be some landscaping on that.

"We will be keeping a close rein on costs and ensuring we remain profitable, which we have done. Our turnover has decreased, but we have remained profitable and kept all our staff."

At Glendale Horticulture, principal sales manager John Marsden said: "For municipal sales there might have been one or two quoting in the past and now there are three or four, so we have to look at the package we offer.

"We try to spend a lot of time talking to customers about our policies, such as minimising herbicide use, and looking at the compost we use, to give us the edge.

"We are looking into offering a peat-free range and reducing the peat in our standard offering. These are all things that add to our costs but benefit the customer. It has been a hard 12 months but rewarding because of the learning curve. You can't just sit behind a desk any more."



Professionals wrestle with tight budgets and disease risk

Health and safety and tree diseases are set to give arboriculture professionals a tricky balancing act next year, with a tightening up on working practices expected from the Health & Safety Executive during 2012.

Arboriculture contractor BTS Group managing director Halley McCallum said the health and safety focus could see contractors, for example, facing prohibition orders against workers in cherry pickers using top-handled saws with one hand.

Meanwhile, he said, it will become harder to compete for utility and local authority contracts as corporate players take on jobs at a loss to push up their pipeline turnover and please shareholders.

Arboricultural Advisory & Information Service director Derek Patch said: "Contracts will become longer-term and less lucrative, while budget cuts will lead to fewer street tree inspections and less upkeep. This has safety issues for residents."

On a more positive note, new guidance for trees in relation to construction, due from British Standards next year, could make it harder for developers to disregard or fell trees, he added. "A recent National Tree Safety Group guide should also help."

Institute of Chartered Foresters executive director Shireen Chambers said: "Tree disease is the big one and biosecurity is likely to be an issue thanks to diseases such as Phytophthora ramorum on Lawson cypress.

"Rules will have to be self-regulatory but they will force arborist and nursery staff to disinfect boots and climbing kit. Local authority budgets are already stretched and more stringent checks on trees in gardens and on roadsides will stretch them further.

"The debate on whether the various trade and professional organisations should work closer together or merge will rumble on, but demand for professionalism will grow in 2012. In recession, clients are more cautious and want value for money."

London Tree Officers Association chair Dave Lofthouse said: "Oak processionary moth will be an important issue next year and the Forestry Commission needs more funding to tackle the problem of tree disease.



Competition tightens but focus on competence stays strong

With local authority budgets facing ongoing pressure, contractors in the grounds care arena expect competition for work to be fierce - but opportunities remain.

Glendale managing director Tony Hewitt said: "Intensive competition for whatever business is around will characterise next year. Local authorities are cutting their costs so maintenance firms will mitigate this by reducing staffing levels and specification for standards."

However, areas such as green waste, recycling and other aspects of the green agenda will do well, he added. "Well-established companies could do well because customers want reliability and security. But there will be casualties. Cash is tight and banks aren't lending so smaller businesses will struggle. Larger firms such as ours may look at smaller bolt-on companies to acquire, so it's not all doom and gloom."

Gingko Landscape Contractors director Dan Curran said: "Projects for social housing and hospitals may not be hit too badly but the Government's localism and 'Big Society' agendas could affect how contractors work.

"They will have to be more proactive in dealing with communities and more innovative in how they draw locals into projects, which could include bigger drives in getting residents into apprenticeships," he suggested.

"I think next year will see a swing away from bundling contracts up with other services such as cleaning. Clients have discovered quality often suffers, which is very good for our sector."

Ground Control national group training manager Neil Huck said: "There will be a drift to more work for less money and to long contracts. Going to tender costs money and people will look to save by moving away from oneor two-year contracts.

"Pesticide rules will continue to hurt, especially with a tightening over hard-surface application near surface drainage. Meanwhile, the Health & Safety Executive will be looking more closely at occupational safety."

He added: "The survival-of-the-fittest adage will ring true. There are big contracts out there and competent contractors will be in a strong position because few people will want to take a risk on a cheap-price alternative."


Garden retail

Economic uncertainty brings value to the fore at centres

Sales were broadly flat across the board in 2011 with plants up but big-ticket items down. Retailers see this repeating in 2012 with the eurozone crisis, inflation and Government cuts biting.

Scotsdale managing director Caroline Owen said plant sales this year had been "fantastic" and that this would continue into 2012. Perennials sales were up 20 per cent after poor weather killed off many plants last winter and better weather prolonged the gardening season.

But Owen warned: "We have to have value lines. On the high street, customer offers from Morrisons are targeting people early in the month, when they have money. We have to be as savvy as they are."

Exemplary service will be more important then ever, said Owen. "The hard goods that have sold well are aligned to plants. Compost had a good year. I don't see why that can't continue into 2012. But anyone who doesn't think it is going to be tough is underestimating what is happening."

Consultant Neville Stein also sees a further squeeze on big-ticket items such as high-end furniture with consumers "using the power of the internet to price check."

Stein also predicted greater emphasis on value - including more price promotions - and an increase in non-garden retailers such as Aldi and Lidl selling more promotional plants and gardening products.

He said he also expected a rise in the number of experienced retailers looking for jobs as centres cut staff.

Lead the Good Life managing director Gez Smith said a possibly stronger pound would lead to a higher level of imports. He too believes "value" will be important, as will the Olympic Games, the Queen's diamond jubilee and grow your own.

Alton Garden Centre director Andy Bunker said the Tillington group will promote sales linked to London 2012 and the jubilee with items such as red, white and blue bedding hanging baskets.

For new HTA president Carol Paris, maximising people's use of their small plots, particularly with fruit and vegetables, will be her big theme for 2012.

While grow your own is set to be strong for a fifth year, working around events will be the way forward in 2012, said Coolings managing director Gary Carvosso. He cited a stronger approach in working with the community and using local papers for publicity. Centres such as Woodcote Green and Fermoy's have made great efforts to exploit this.

Abercorn Garden Centre owner David Norman said: "If we see a downturn in December sales and that is attributed to the financial issue rather than the weather, that will be indicative of the spending pattern for 2012, with people being more selective in what they spend their money on.

"We have to be prepared to batten down the hatches and buy in collectives rather than trying to drive down prices as an individual. There will be an uplift when the sun shines but you can't maintain a good cash flow if customers are spending it all in one month and the rest of the year is flat."


Professional gardening

Boosting visitors and skills

Professional gardeners will continue to face plant health and environmental pressures in 2012, while budgets and the need to boost visitor numbers will be factors making themselves felt. More and better use of technology for communicating with garden visitors could also be a trend.

National Trust head of gardens and parks Mike Calnan said plant diseases such as Phytophthora will continue to be a big issue.

"For the past three years, we have been doing emergency propagation of plants threatened by Phytophthora so we don't lose very important species. Our unit has moved location and we are now building the various bits of infrastructure at the site in Devon. That will be a huge improvement."

HW technical editor Sally Drury highlighted skills as a key area for 2012. "There is an ongoing issue with the need for practical training."

Knowing what to spray - and whether to spray - will also be important. "Most gardens want to be seen not to be going down that route, but if you have had to lay off staff or you don't have the money to take on seasonal staff, you are going to have to spray those weeds that nobody has had time to pull out."

Royal Botanic Garden Edinburgh head of education Leigh Morris said gardens had to take advantage of QR codes, Bluetooth and social networking. "Gardens have to embrace technology. Why shouldn't gardens have a Facebook page? We are behind other industries but it only takes two minutes to start up a twitter page."

Attracting visitors will be a challenge in 2012 and a number of gardens are looking at ways of bringing people in while keeping costs down.

Myddelton House Gardens head gardener Andrew Turvey said: "We are in the same position as last year, trying to attract the same clientele to come to our venue rather than anyone else's.

"We have our new glasshouse opening that will be a huge new visitor attraction next year, and plant selling and merchandising are important for us. We will focus on cheaper things because it's easier to take £5-10 off someone than £50.

"We will also keep as much in-house as possible to keep costs down. We are not doing winter bedding, when not many people are coming to the gardens. We will show off when we need to and at other times it is better to protect the soil."



Costs put pressure on bottom line as growers seek future investment

The tendency for costs to rise ahead of prices will continue to challenge fresh produce producers in the new year, according to industry representatives.

"As always, growers need a better bottom line," said British Independent Fruit Growers Association chairman John Breach. "They need everyone to realise that if we aren't left enough money, they can't invest it where it's needed, in planting, in cold storage and in packing."

He added: "We also need to ensure that it's an attractive industry for young people to consider coming into. Otherwise, sons and daughters won't take over family businesses and we won't attract managers from outside the industry."

He also expressed a hope that an adjudicator overseeing relations with supermarkets would be appointed in the new year under the draft Groceries Code Adjudicator Bill. "But it's encouraging that supermarkets are stocking imperfect fruit," he added.

This year saw berries becoming the UK's most popular food category, with 18.5 per cent of the market, ahead of apples and bananas. But British Summer Fruits chairman Laurence Olins said the organisation will not be resting on its laurels in 2012. "We have a marketing campaign planned through to April 2013."

Olins sees blueberries continuing to grow in popularity, but added: "Raspberries are having a fightback, with new varieties such as Maravilla and T-Plus becoming commercially available."

Tabletop production of soft fruit will also increase because growers can no longer sterilise the ground, he added. "The producer organisations have funded this in the past - some clarity on their position in the new year would be helpful."

Lea Valley Growers Association chairman Gary Taylor echoed cost worries: "Gas and electricity prices are key and I can't see them doing anything other than going up.

"The speculators forward-buy months or even years in advance, so from a customer's point of view it doesn't follow any logic. Meanwhile, produce prices have been static."

One positive for his sector is the apparent decline in Dutch imports of peppers and other crops, he added.

British Leafy Salad Association chairman John Allan said: "Our main project at the moment will be the PR campaign partly funded by the EU to address the fall in sales from the E. coli outbreak earlier this year."



Water and EU rules to impact sector

Money worries will pervade the golf course and local authority turf sectors in 2012.

HW technical editor Sally Drury was particularly concerned about the growing number of unskilled staff she sees using machinery such as mowers, which she said was a result of budget cuts.

She added that inflexible contracts were leading to too close adherence to frequency-based specifications, meaning grass will be mowed every two or three weeks and not left if it is too dry or cut more often if grows a lot.

GPS equipment from firms such as Gambetti should help spraying to be done more accurately and economically, but she said funding issues may delay purchases of new technology.

EU regulations such as Tier 4a are set to tighten rules around emissions from January 2012 for machinery with engines from 70-170hp. This will affect local authorities with tractors and sports turf contractors who work in drainage and irrigation.

The ongoing reduction in active ingredients by the EU will again hit professionals.

Meanwhile, Turfgrass Growers Association members said water will be the big issue, with summer and winter droughts a concern.



Budget pressures rule but new thinking will emerge, say pundits

While the public sector squeeze continues to dominate decision-making in the green space sector, parks consultant Dr Sidney Sullivan is hopeful that new ideas and energy will be unleashed by middle managers stepping forward as heads of service to replace those taking early retirement.

He also predicted a greater focus on marketing parks to persuade politicians of their health and environmental benefits. At the same time, trusts, social enterprises and not-for-profit companies will emerge to run parks, funded by a mix of grants, fundraising and local authorities.

"Parks will have to tailor themselves more closely to users so we will see more allotments, orchards and outdoor gyms," said Sullivan.

Cardiff County Council parks manager Peter Hamblin added: "Budget cuts will hurt but may stimulate new trends as more people switch to lower-frequency-maintenance plants by creating wild flower meadows and swathes of wild grasses.

"Local authorities across the UK will start to hand over public spaces to community groups or sell them off for building. There will be more involvement with private companies but maybe everyone can learn from the mistakes made with compulsory competitive tendering.

"I think that there will be closer accounting so the public knows exactly how much it costs to maintain flower beds in a particular park. This is where 'Big Society' could make a mark, with friends and community groups taking over sections of parks."

Parks Agency director David Lambert warned that cuts pressure may be compounded after the May elections when local politicians no longer seeking votes squeeze budgets even more ruthlessly.

"We will see more antisocial behaviour as park upkeep falls," he said. While 2012 could see the mobilisation of parks trusts and friends groups, he warned that volunteers may dig in their heels if they are treated as employees "because it abuses the spirit of volunteering".

At Bury Council, parks and countryside manager Mike Bent said: "Cuts will really start to bite next year. Up to now, Greater Manchester hasn't been hit too badly. There will be fewer projects unless externally funded.

"Those projects that do go ahead will be sustainable to cut down on maintenance. Officers will do more multitasking, which may blur roles and accountability, while parks will be looking harder at how to generate fees such as more events."

Parks consultant Bob Ivison said: "Park managers and community groups will work harder to make the case for green spaces. This will bring them into contact with other departments such as health, ensuring a stronger voice.

"Continuing financial pressures may force more authorities to pull out of Britain in Bloom. Meanwhile, more parks will look at charging professional users such as keep-fit trainers and dog-walkers for using their spaces."

Peter Wilkinson, director of consultancy Next Field, said: "As councils develop their new local plans, there will be widespread confusion as planners and local groups seek a way to make the new system work in practice.

"The Community Infrastructure Levy is seen as the biggest - perhaps only - show in town for future parks funding. It won't provide the cash holy grail that some expect, but I hope that green space teams will be able to secure their place at the levy table."



Firms looking for boost from next year's headline events

The diamond jubilee could give a shot of confidence to a depressed market for domestic landscape projects next year, while Government spending on infrastructure is raising hopes of large projects down the line.

Frosts Landscapes landscape construction director Aiden Lane said: "Architects are saying next year will be tough but, for the kind of large projects we do, enquiries should hold up for the first half of the year.

"But people tackling jobs around the £200,000 mark will find the market gets very aggressive because there's so much competition. Clients and main contractors will drive down prices and some practices will lop off £60,000 from a £300,000 job to pay wages. Hard and good times will in part be determined by location - people in the capital will fare better than those elsewhere."

Garden designer Andrew Fisher Tomlin added: "The early part of next year will be up and down in terms of confidence - you cannot predict the market.

"Consumers are worried about their pensions and savings, which may affect smaller domestic schemes. The Government is putting money in big infrastructure projects so that could help large-scale designers. But schemes such as the London Olympics are drawing to a close and everyone wants to know what's next.

"Good news could come from the jubilee in 2012. The royal wedding this year cheered up people and the diamond jubilee could do the same. It's amazing what a surge of confidence can do to markets, so 2012 may not be such a bleak time."

Association of Professional Landscapers chairman Mark Gregory said: "I'm positive but next year will be tough. The bottom end is tight while top-end big projects are not going ahead. There is, however, quite a lot of activity in the mid range.

"So there's potential for market growth in 2012. I think that more firms will lock on to emerging markets such as sustainability in drainage and water use. This will give them a unique selling point and make things happen.

"Sadly, no-one is making margins with contractors cutting each other up - the mark of an industry in panic. One of the most worrying things is that we don't want another extreme winter like the past two."

Landscape architect Noel Farrer said: "Nine-tenths of landscape architects work in firms of fewer than six people so, unless procurement practices change, the large infrastructure projects won't filter though to them or smaller landscape contractors.

"However, I'm hoping that the Government uses the Olympics as a baseline model for change because that project tried to spread work wider than the big corporate players, so smaller localised firms got a look in. The localism agenda may help nudge this along."

Willerby Landscapes commercial director John Melmoe added: "All sectors - private, commercial, public - will experience a difficult year with a market that is continuing to contract.

"We need to work with the supply chain to drive out costs where possible. Simply putting the squeeze on suppliers will weaken the industry and standards will fall.

"However, 2012 should be a fantastic year because of the Olympics and the jubilee. We need to get behind the spirit of both and recognise the business potential. We will not achieve this if we operate under a cloud of doom and gloom."

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