Lawn & garden supplies market dominated by Scotts, challenged by weather and economy

Lawn & garden supplies market dominated by Scotts, challenged by weather and economy

This blog is based on Packaged Facts’ Lawn and Garden Supplies in the U.S. 10th Edition. Purchase the report by Dec. 15 and receive 5% off with promo code PFLAWNSUP

Americans love their lawns and gardens and use Scotts Miracle-Gro products more than others to care for them. Scotts is the market leader by a wide margin, controlling an estimated 60% of total sales in the U.S. The company is the leader in all four categories of L&G supplies: fertilizers, growth media, grass seed and pesticides.  The balance of overall sales comes primarily from a handful of marketers and the exclusive/private label brands sold by retailers Walmart (Expert Gardener), Home Depot (Vigoro), and Lowe’s (Sta-Green).  These three retailers dominate distribution of L&G supplies.  Evidence of their power is the fact that Scotts generated nearly 70% of its Global Consumer segment sales in fiscal 2014 from the three chains.   These so-called “big box” stores along with other mass retailers like Costco account for three quarters of L&G supply sales with the balance mainly coming from hardware stores (True Value, Ace, Menards) and garden centers/nurseries.  Challenged by the discount prices of mass retailers, hardware stores and garden centers/nurseries tend to focus on service, expertise, convenience of being local, and brands that are exclusive to the channel.

The economy and weather haven’t been very cooperative for marketers of L&G supplies.  Lawn and Garden Supplies in the U.S. 10th Edition details how L&G supplies is a mature market with sales highly dependent on the economy, housing, household formation, regulations, weather, and seasonality.  Continued economic challenges have made market recovery uneven and weather has also created fluctuations in sales year-to-year.  Sales peaked at the height of the housing boom in 2005, and have been declining and trying to recover ever since.   The market has stabilized somewhat with sales basically flat between 2010 and 2014.  Packaged Facts estimates total retail sales at $5.7 billion in 2014.  Growth media accounted for an estimated 35% of the total, pesticides 32%, fertilizers 24% and grass seed 9% of total sales.

Slow growth is predicted with sales projected to increase by a CAGR of 3% to reach $6.6 billion in 2019.  Performance depends on the economy, sustained housing recovery, and an increase in household formations.  Weather will have a significant impact and is impossible to predict.  Continued drought conditions and severe water restrictions in some parts of the U.S. will likely have a negative impact on several products segments, although products that promote water efficiency can outperform.

If conditions are favorable the market can grow faster over the next five years because Americans continue to view lawn and garden care as a way to beautify their homes while maintaining and increasing home values.  But research from various sources shows that many consumers find it confusing to purchase and apply L&G supplies.  A plethora of products with numerous formulations on the shelves confuses consumers and makes buying challenging. Scotts’ research shows that of the large number of households participating in DIY lawn and garden activities 60% do not regularly buy lawn fertilizer, and 70% don’t regularly buy grass seed.   Pesticide maker Bayer Advanced says its research shows that 40% of shoppers leave stores without making a purchase because they are confused.   Consumers also want products that are easier and less messy to use and apply.  Scotts says research shows 82% of Americans would feed their plants if it was quick and easy to do, 55% think feeding can be messy, 45% think feeding can be confusing, and 49% worry about over-or-underfeeding their plants.  

Market growth will be driven by products that consumers find easier to use and provide added value in the form of cost or convenience.  Combination products should continue to grow as will ready-to-use items that make application easier.  Products that target garden care will likely outpace lawn care products as many consumers find gardens easier to maintain with less water.  Also consumers are increasingly growing their own fruits and vegetables in suburban and urban gardens.   According to Packaged Facts’ April 2015 online consumer survey the most popular reason people do outdoor gardening is to grow fruits and vegetables.   Packaged Facts estimates that 60 million Americans grow edibles during the year.  Forty-four percent of all outdoor gardeners in the survey said enjoying the taste of garden-fresh vegetables/fruit was their reason for gardening.  A third said benefiting from the nutrition of garden-fresh vegetables/fruit, while 27% mentioned saving on buying vegetables/fruit.   Increased vegetable and fruit gardening will help drive the growing demand for natural and organic products, a trend particularly popular with younger homeowners who are most concerned over the health and safety of chemical products.  

-- ByTom Pastre