The industry must work hard in the face of rising foreign competition and the growing influence of supermarkets
London, United Kingdom (PRWEB) February 12, 2013
The financial crisis has had a mixed effect on the Flower & Plant Growing industry. Initially, industry revenue fell and demand waned as consumers were far more stringent in their approach to spending on discretionary products. However, the recession forced the pound to depreciate against the euro, making imports comparatively more expensive. Given the extremely high level of import penetration, this raised demand for domestically-grown produce. Overall, IBISWorld expects that industry revenue will grow at a compound annual rate of 2.0% over the five years through 2012-13. However, revenue is forecast to decline by 3.7% in 2012-13, to £1.01 billion.
According to IBISWorld industry analyst Lewis Sutton, “downstream market conditions have been transformed by the growing influence of supermarkets, which account for the majority of industry sales and have been forcing industry operators to meet exacting supply contracts”. This has accelerated industry consolidation, as smaller and less-profitable growers have struggled to meet these quotas. Over the five years through 2012-13, the number of industry establishments and enterprises has fallen at a compound annual rate of 3.2% and 2.1% respectively.
Sutton adds, “growers must also contend with fierce foreign competition in the domestic market, which is especially attractive to foreign growers due to the high incomes and above-average spending on flowers in Britain, compared with the rest of the European Union”. Imports satisfy over 54% of domestic demand and this proportion continues to grow. Exports are less important to the industry, as they account for just 5.9% of its revenue.
Over the next five years, the industry is expected to face more challenges as a result of stagnant disposable income growth, rising import competition and an appreciating pound. On a brighter note, industry players will be able to capitalise on several growth opportunities, including the development of premium niche markets, such as those for organic produce. Growers are also likely to benefit from continued advances in industry technology, such as hydroponics and micropropagation. IBISWorld expects industry revenue to contract slightly over the five years through 2017-18.
The UK Flower & Plant Growing industry has a very low level of market share concentration as the largest four industry operators account for just 8.8% of industry revenue It is a highly fragmented industry, characterised by small, family run farms.
For more information on the Flower & Plant Growing industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
This industry involves businesses that grow and propagate plants and bulbs. Industry players supply retail and wholesale businesses, landscapers, councils and other horticulture businesses, such as fruit and vegetable growers. The industry also includes the growing of turf, flowers and foliage for cutting and displaying, and seed collection.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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