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Plant businesses have struggled since the recession

Mar 19, 2015
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The heating bill can reach $30,000 for the month of January at Spring Hill Nurseries, but that is the price to be paid for green grape buds, flowering black berries, and pink hellebores — triumphant in rows ready to be shipped to the gardening public at the first hint that winter might be relenting.  

Felix Cooper, Vice President of Gardens Alive, the parent company of Spring Hill Nurseries, and greenhouse manager Jenny Lewis are giving a balmy tour through what seem like endless rows of blood-red sedum, glowing pink coral bells, and lush vining clematis. Coolers are filled with grub-like arisaema tubers, and phlox roots tumble through conveyor belts and packing machines into bags of peat moss. 

Spring Hill Nurseries has been around longer than California has been a state, and it’s even older than the Washington Monument. Founded in 1848, it’s been as hardy as the goldenrod one can find on Ohio side roads. It made it through the Civil War and mechanization and everything a modern economy has thrown at it — up until now. After 166 springs, this may be it’s last. 

“It’s been a fairly steady ride down,” says Niles Kinerk, CEO of Gardens Alive. Gardens Alive owns several plant businesses and sells environmentally responsible gardening products.  

While some of its seed companies and bulb companies are doing great, Spring Hill is draining cash. A particularly nasty winter last year didn’t help. Kinerk is trying to sell it.

“The alternative for us is to cut way back,” he says.  

The demise – or dramatic scaling back – of Spring Hill Nurseries is the tail end of a nationwide phenomenon that is decades in the making but came to a head in the great recession. 

Nurseries ramped up with the housing boom, took out loans to expand, and were left holding the bag. 

“As many as 30 percent of the growers in the country exited during this period of financial stress,” says Charles Hall, an agricultural economist at Texas A&M University. “That’s a significant number of growers.”

“In previous recessions,” he says, “we had a situation where we sold more flowers, shrubs and trees because people stayed home and engaged in gardening more because they weren’t taking trips to Disneyland.”

But not this time.

Tony Avent runs Plant Delights Nursery in Raleigh, North Carolina, where the industry was especially hard hit. “North Carolina lost 40 percent of its nursery industry, including garden retailers, nurseries, the whole bit. Georgia lost sixty percent.”

The collapse is evident today in the shortage of woody ornamental plants, like landscape trees. They take five years or more to reach a sell-able size, and not many people were planting five years ago, so there aren’t enough ready now. 

There’s also new competition. 

“The big box stores have put quite a bit of effort into their green goods areas,” says Gardens Alive’s Kinerk. “They’re very competitive and they’ve taken a good hunk of business that used to be fulfilled by companies like ours.”

Credit, especially for smaller companies, is harder to come by.

“Back in 2001 the bank was willing to extend to us 10 times our earnings,” Kinerk recalls. “And now it’s down to three times earnings.” 

Federal regulations reigning in lending are partly responsible for that, and while banks have expanded small business loans as a whole, plant nurseries’ biggest source of collateral is their land.

It’s usually not worth much.

“I’ve actually had my banker say to me don’t even talk to me about the land value or building value ,” says Kinerk.   

But hovering behind the economic factors is how America’s relationship to its gardens and its plants is changing. For one, fewer people grow their own food.

“People’s size of their yards are getting smaller.  Two-income families have less time.  Gardening takes time” he says.  “It’s a great way to relax, I will hasten to add, and forget about your day!”

Kinerk still has faith that Spring Hill can flourish again, but he can’t be the one to rescue it. He needs to use his cash to invest in his businesses that are growing.

“They’re good businesses, and if we could find a buyer who had the cash to invest to get it going like it could again, it’d be better for everyone .”

The plant nursery industry will not disappear, its roots are too deep for that, but for now it is smaller and a bit wilted. 

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