Market Trends: July 1998

Doing It One At A Time

Most contractors agree that the more dollar volume that can be earned off a job the better. Such jobs minimize the amount of time companies pay for crews to drive a route and, if maintained for awhile, can yield profitable efficiencies.

Apparently, the next door neighbor remains the most popular customer, however, based on a Lawn & Landscape survey. According to respondents, better than half of their revenues come from single-family homes – nearly double the revenues from the much sought after commercial/industrial facilities.

Living Together

CLEVELAND, Ohio – Homeowners’ associations are some of the most undesirable accounts for some contractors. The higher number of residents who all think of themselves as the client is too great a threat to productivity to pursue the possible benefits of having a crew spend an extended period of time at one job.

More contractors may want to reconsider the decision not to pursue this market, however, based on information gathered by the Cleveland Electric Illuminating Co. It found that nearly 35 percent of new homes built in Northeast Ohio in the first seven months of 1997 were either cluster homes or condominiums. The results were attributed to tight housing markets and high land costs, in addition to commonly cited trends of people having less free time and more disposable income.

According to Karen Danielsen, director of residential policy and practice at the Urban Land Institute, Washington, D.C., these smaller property homes are most popular in inner-ring suburbs with limited buildable land and in markets where new home construction requires a more expensive infrastructure to handle irrigation demands.

ANLA Fills Bolusky's Spot Quickly

WASHINGTON, D.C. – The American Nursery & Landscape Association filled its director of legislative affairs opening by hiring Bryce Quick, who began serving in this position in late May.

Quick comes to ANLA after having served as a professional staff member for the U.S. House of Representatives Committee on Agriculture, serving chairpersons Pat Roberts (R-Kan.) and Bob Smith (R-Ore.). Quick directed the development of policy and served as principal advisor to the chairmen and committee members on a wide range of issues.

“Bryce brings a tremendous amount of legislative expertise and strong networks in Congress, the Executive Branch and key industries, including agriculture, banking, finance and transportation,” said Robert Dolibois, ANLA’s executive vice president.

Quick replaces Ben Bolusky, who left ANLA to accept the executive vice president position with the Florida Nursery and Growers Association.

Industry Forecast Strong

WASHINGTON, D.C. – Good news keeps on coming for the green industry. The latest Gallup survey found that more than 22 million U.S. households spent $14.6 billion on professional landscape, lawn care and tree care services in 1997.

These results represent an increase of one million households and $600 million from 1996. In addition, the survey anticipated that 24.4 million households will purchase these services in 1998. The amount each household spends continues to rise as well, now averaging $663 over the past five years.

Other survey results indicated that people beyond the age of 50 accounted for nearly half ($7.1 billion) of the total 1997 spending, and tree care showed the largest growth with a 50 percent spike in volume to $2.4 billion.

American Cyanamid's Parent Company Purchases Monsanto

NEW YORK – Although it may not have the impact on the green industry of the formation of Novartis, deal number two among specialty pesticide manufacturers was announced June 1, when American Home Products, the owner of American Cyanamid, said it will buy Monsanto Co. in a deal valued at more than $33 billion that goes well beyond specialty chemicals.

Along with American Cyanamid’s Pendimethalin, AHP markets a number of consumer drug products. Monsanto, meanwhile, brings herbicides like Roundup and Lasso.

The combined company, which will be renamed, expects 1998 revenues of $23 billion, although it is unclear how much of that figure is represented by the specialty chemical business.

Representatives from American Cyanamid and Monsanto weren’t available for immediate comment.

Monsanto shareholders, who stand to own 35 percent of the new company, must still approve the deal, but one analyst interviewed by CNN speculated that the shareholders “were probably looking for more” in a buyout offer.

PHC, Griffin Go For A Bio-boost

PITTSBURGH, Pa. – Plant Health Care, a microbial biotechnology company, announced a strategic working alliance with Griffin Industries, Cold Springs, Ky., under which the companies will cooperate on the research and development of unique microbial biofungicides and biofertilizers designed specifically for use in the commercial turf and horticultural markets.

The companies’ plans include combining their respective products to produce the first biofungicides on the market that assist in both disease management and fostering plant health.

“The new generation of biofungicides and biofertilizers will provide disease control by working with the entire ecology of the plant-soil system,” added Len Conley, national sales manager for Griffin.

The first product produced under the alliance is currently in university trials.

In Business...

LESCO reported record first quarter sales, up more than 11 percent from last year… Morbark opened full-service support facilities in Florida, California and Georgia… Century Rain Aid acquired distributorships in Florida and in the Midwest.