Charlie Hall

Greenhouse Management: What should growers take away from this state of the industry report?

Charlie Hall: There’s both tailwinds and headwinds in front of us. The main tailwind is that the latent demand for housing is really strong and will stay strong. The headwind is that interest rates and mortgage rates being high puts a damper on the sale of both existing homes and new homes, but the Fed has already indicated that they’re going to start lowering interest rates mid-year this year, so things should start improving as far as the mortgage rates are concerned, so that’s going to stimulate the housing market.

Another takeaway is people’s ability to pay. Now there’s some credit card debt that is starting to increase and I’ve got my eye on that. I’m a bit concerned about it, but by and large, the main home garden customers, the homeowners that buy landscape services, have the ability to pay because their cash position is much better because of the COVID relief efforts than they would have been otherwise. And so, the ability for people to pay for flowers, shrubs, trees and landscape services is there. The question is, are they going to pay? And that’s where we have to put our best value proposition forward in order to remind them of the necessity to buy flowers, shrubs and trees and be surrounded by greenscapes because of the health and well-being benefits and environmental ecosystem benefits.

GM: The report begins by saying that consumer spending has been “indefatigable.” Will consumers continue to be indefatigable this year?

CH: You can’t have that situation go on forever. So there will come a time period when it stalls. That’s why I’ve got my eye on the amount of credit card debt that people are incurring. But our main target market in terms of the income bracket which we sell to are the people who are in the better cash position than they were pre-pandemic, so they have the ability and hopefully the willingness to pay.

GM: How should growers prepare for that drop in spending? How should they respond when it happens?

CH: It comes down to value proposition. People have to understand that we’re not a luxury in their lives. We’re a necessity. And the more they have an appreciation for the fact that we’re a necessity and all the economic and environmental ecosystem services and health and well-being benefits that we provide, then that makes our demand more long-lasting. So we’ll have a better shot if we continue to put forward our best value proposition.