• TABLE OF CONTENTS
HIDE
 Front Cover
 Title Page
 Table of Contents
 Executive summary
 Acknowledgement
 Introduction
 Scope of work and methods
 Findings of focus group sessio...
 Survey results
 Conclusion
 Reference
 Interview protocol for telephone...














Group Title: University of Florida. Agricultural Experiment Station. Economics report ; 01-2
Title: Competition in the horticultural container market in the Southeastern United States
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00027547/00001
 Material Information
Title: Competition in the horticultural container market in the Southeastern United States
Series Title: Economics report
Physical Description: 31 p. : charts ; 28 cm.
Language: English
Creator: Hodges, Alan W ( Alan Wade ), 1959-
Haydu, John J
University of Florida -- Food and Resource Economics Dept
Publisher: Food and Resource Economics Dept., Florida Agricultural Experiment Station, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville FL
Publication Date: [2001]
 Subjects
Subject: Nurseries (Horticulture) -- Economic aspects -- Florida   ( lcsh )
Competition -- Southern States   ( lcsh )
Container gardening -- Equipment and supplies -- Marketing   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Includes bibliographical references (p. 25).
Statement of Responsibility: by Alan W. Hodges and John J. Haydu.
General Note: "March 12, 2001."
 Record Information
Bibliographic ID: UF00027547
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 002694313
oclc - 46630114
notis - ANG1657

Table of Contents
    Front Cover
        Front Cover
    Title Page
        Page 1
    Table of Contents
        Page 2
        Page 3
    Executive summary
        Page 4
    Acknowledgement
        Page 5
    Introduction
        Page 5
    Scope of work and methods
        Page 6
    Findings of focus group sessions
        Page 7
    Survey results
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
    Conclusion
        Page 24
    Reference
        Page 25
    Interview protocol for telephone survey of wholesale nurseries
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
Full Text

' MIarch 2001


Economics Report


ER 01-2








Competition in the Horticultural Container
Market in the Southeastern United States


rn-rn


`-U UNIVERSITY OF
2 FLORIDA
Institute of Food and Agricultural Sciences
Florida Agricultural Experiment Station
Food and Resource Economics Department
Gainesville, FL 32611


Alan W. Hodges
John J. Haydu
















Competition in the Horticultural Container Market
in the Southeastern United States

Economics Report 01-2


by Alan W. Hodges, and John J. Haydu
University of Florida
Institute of Food and Agricultural Sciences
Food & Resource Economics Department
Gainesville, FL


March 12, 2001







Table of Contents


List of Tables


List of Figures ..................... .................................... 3

Executive Summ ary ..................................................... 4

Acknowledgments ............................. ......................... 5

Introduction ................. ............. ............................ 5

Scope of W ork and M ethods .............................................. 6

Findings of Focus Group Sessions ........................... ............... 7

S urvey R results ......................................................... 8
Characteristics of Surveyed Firms ..................................... 8
Sales .. ................................................... 8
Production A rea ............................................. 8
P lant Types ................................................. 9
Purchasing Patterns for Nursery Containers ............................ 10
C ontainer S ize .............................................. 10
C ontainer Type ............................................. 11
Container Brand Purchasing ................. .................. 13
Container Brand Market Share ............. ...................... 17
Container Price Changes ........................................... 18
Raw Material Costs for Container Manufacturing ...... ................. 22
Availability of Container Supplies ................... ... .............. 23
Preferences for Use and Substitution of Different Types of Containers ....... 23

C conclusions .......................................................... 24


References .


.......................................................... 25


Appendix--Interview Protocol for Telephone Survey of Wholesale Nurseries ........







List of Tables


Table 1. Population and survey sample of ornamental plant nurseries in the southeast United
States ................................................ .... ........... 6
Table 2. Number of firms by annual sales class, surveyed ornamental plant nurseries in the
southeast USA 1999 ................................... .. ............ 8
Table 3. Open field production area, surveyed ornamental plant nurseries in the southeast USA
.................. ..................................... ............. 8
Table 4. Types of plants grown, surveyed ornamental plant nurseries in the southeast USA .... 9
Table 5. Sizes of nursery containers purchased, surveyed ornamental plant nurseries in the
southeast USA, year 2000. ............................................... 10
Table 6. Types of nursery containers purchased, surveyed ornamental plant nurseries in the
southeast USA, year 2000. ............................................... 11
Table 7. Estimated value of container purchases, by type, surveyed ornamental plant nurseries in
the southeast USA, year 2000. ............................................ 11
Table 8. Brands of nursery containers purchased in 1999 and 2000, surveyed ornamental plant
nurseries in the southeast USA. .......................................... 14
Table 9. Value of blow-molded and hard can containers purchased and brand market share, 1999
and 2000, surveyed ornamental plant nurseries in the southeast USA .............. 17
Table 10. Respondents that experienced higher prices for containers in year 2000 compared to
1999, surveyed ornamental plant nurseries in the southeast USA ................. 18
Table 11. Brands of containers that have increased in price between 1999 and 2000, and
magnitude of price increase, surveyed ornamental plant nurseries in the southeast USA
.. .. .. ... . ............ .. ... .... .. .. .. ... .. . .... .. .... 19
Table 12. Respondents experiencing difficulty in obtaining the types and quantities of containers
required, surveyed ornamental plant nurseries in the southeast USA ............... 23
Table 13. Preferences for use of different container types for open field production, surveyed
ornamental plant nurseries in the southeast USA .............................. 24


List of Figures

Figure 1. Distribution of different types of plants produced, surveyed ornamental plant nurseries in
the southeast USA ...................................................... 9
Figure 2. Distribution of containers sizes purchased, surveyed ornamental plant nurseries in the
southeast U SA ..................................................... 10
Figure 3. Distribution of containers types purchased, surveyed ornamental plant nurseries in the
southeast U SA ........................................................ 12
Figure 4. Distribution of blow-molded container brands purchased currently, surveyed ornamental
plant nurseries in the southeast USA ............ ........................... 15
Figure 5. Distribution of blow-molded container brands purchased last year, surveyed ornamental
plant nurseries in the southeast USA ....................................... 15
Figure 6. Distribution of hard can container brands purchased currently, surveyed ornamental plant
nurseries in the southeast USA ........................................ 16
Figure 7. Distribution of hard can container brands purchased last year, surveyed ornamental plant
nurseries in the southeast USA ........................................... 16
Figure 8. Distribution of price increase for blow-molded containers, surveyed ornamental plant
nurseries in the southeast USA ........................................... 20
Figure 9. Distribution of price increase for hard can containers, surveyed ornamental plant
nurseries in the southeast USA ........................................... 20
Figure 10. Distribution of price increase for flower pots, surveyed ornamental plant nurseries in the
southeast U SA ........................................................ 21
Figure 11. Prices for polyethylene resin, March 1998 to January 2001, high density, general
purpose, hopper car loads, blow-molding and injection molding types .............. 22







Competition in the Horticultural Container Market in the Southeastern
United States

by Alan W. Hodges, Ph.D. and John J. Haydu, Ph.D.1
University of Florida



Executive Summary

This study investigated the question of whether competitiveness in the horticultural container
market in the southeast US has changed as a result of industry consolidation from three to two
major manufacturers in 1999. Focus group sessions were held with growers at two locations in
Florida to solicit opinions on this matter, and provide guidance for design of a survey
questionnaire. The focus groups indicated that availability of larger sizes of containers has
decreased, and prices for most containers in year 2000 have increased by about 15 to 20 percent
above 1999. A telephone survey was carried out in nine southeast US states with a representative
sample of 491 wholesale nursery firms that had open-field production of woody ornamentals.
Information collected regarding purchases of horticultural containers by growers included type,
size, manufacturer/brand, changes in prices paid, and availability of supplies. Also, information
was gathered on firm characteristics such as annual sales, production area, and number and type
of plants produced. Market share for each manufacturer-brand was estimated based upon the
survey data for percentage of purchases of different types and brands of containers, weighted
according to estimated sales and total container purchases. Results indicated that the
consolidated manufacturer Nursery Supplies/Lerio clearly has a dominant market position. For
blow-molded containers, the current market share for Nursery Supplies/Lerio is 92 percent, nearly
equal to the combined total in 1999 for the then separate manufacturers Nursery Supplies (52%)
and Lerio/lEM (42%). The market share has remained about the same for a third major
manufacturer (ITML) and other unspecified independent manufacturers (3-5%). Similarly for
injection-molded/vacuum-formed hard cans, the current market share for Nursery Supplies/Lerio is
82 percent, compared to 25% for Nursery Supplies and 61% for Lerio/IEM last year. The Nursery
Supplies/Lerio brand was purchased by 78 percent of respondents purchasing blow-molded
containers, 56 percent purchasing injection-molded/vacuum-formed hard cans, and 92 percent
purchasing injection-molded/vacuum-formed flower pots. For the blow-molded containers and
injection-molded/vacuum-formed hard cans, the percentage of growers purchasing from Nursery
Supplies/Lerio was about ten times greater than the next largest competitor (ITML). A majority of
survey respondents indicated that prices paid for containers of all types increased since the
previous year (1999). The increase in price averaged about 15 to 18 percent for blow-molded
containers, 9 to 15 percent for hard cans, and 13 to 18 percent for flower pots. The magnitude of
price increase did not significantly relate to brand. However, the increase in container prices was
commensurate with increased raw material costs for plastics. Average prices for high-density
polyethylene resins in year 2000 were 17 percent higher than in 1999 for blow-molding type resins,
and 11 percent higher for injection-molding type resins. A majority of growers indicated that they
prefer to ordinarily use blow-molded or hard can containers for open field production of woody
ornamentals, however about a third of respondents did use flowerpots for this purpose. A higher
number of respondents reported purchasing flower pots in 2000 than in 1999.





Alan Hodges is a Coordinator of Economic Analysis in the Food & Resource Economics
Department, Gainesville; telephone 352-392-1881x312, email AWHodges@mail.ifas.ufl.edu. John Haydu
is a Professor at the Mid-Florida Research and Education Center, Apopka; jjh@gnv.ifas.ufl.edu.







Acknowledgments


This research was made possible by the financial support of Florikan, Inc., of Sarasota, Florida.
Telephone surveys were conducted by the University of Florida, Bureau of Economic and Business
Research, coordinated by Chris McCarty and Scott Richards. Peer review of the manuscript was
provided by David Mulkey, Robert Degner, and Bill Messina.



Introduction

The nursery and greenhouse industry in the United States is the sixth largest major sector of
agriculture, with wholesale farm-level sales of about $11 billion in 1997 (NASS, 1999). The
southeast US is an important region for both production and marketing of ornamental plants
because of the favorable climate and relatively plentiful land and water resources.

Manufactured plastic nursery containers are widely used for horticultural production because of
their advantages of convenience and productivity over traditional field (in-ground) growing
systems. A recent survey of nursery growers in 22 states found that container-grown plants
represented two-thirds (67%) of overall production value, and in many states, including California,
Florida, Alabama, and Mississippi, over 80 percent of production is in nursery containers (Brooker,
Hinson, Turner, 2000). Purchase of nursery containers is a significant production expense for
growers, and is often the single largest direct cost item. According to data from Florida wholesale
nurseries, expenses for containers represented 5.4 percent of total operating costs, or 4.9 percent
of gross sales (Hodges, Satterthwaite and Haydu, 2000).

In recent years, the market for nursery containers has become more concentrated, and is
dominated by a small number of major firms. Nursery Supplies Inc. merged with Lerio/IEM in
March, 2000, leaving only two major producers of the commonly used blow-molded nursery
containers in large sizes, Nursery Supplies/Lerio, and ITML. Allegedly, this action has resulted in
reduced competition in this segment of the horticultural container market.

Most economic theory assumes perfect competition in the marketplace. Perfect competition brings
about the most efficient allocation of scarce resources, as costs of production and prices for
consumers are minimized (Goodwin and Drummond, 1982). Some attributes of perfectly
competitive markets include:
S Insignificance of the individual producing or consuming unit in relation to the total market,
such that all participants are "price takers".
* Homogeneity of product.
* Absence of artificial limitations on entry to or exit from the market.
* Stable and adequate supply of product.
* Widely available information about product features and prices.

In reality, however, most markets are not purely competitive. In the extreme case of monopoly (a
single producing firm), the market demand curve is the same as the firm's demand curve, so
increased sales volume results in a lower sale price and lower marginal revenue. Rational
monopolist firms may therefore restrict their production in order to maintain higher prices and
profits per unit.

The primary objective of this project was to assess the competitiveness in the market for
horticultural (nursery) containers in the southeast United States, through examination of brand
purchasing patterns, changes in prices paid for containers, and availability of container supplies.







Acknowledgments


This research was made possible by the financial support of Florikan, Inc., of Sarasota, Florida.
Telephone surveys were conducted by the University of Florida, Bureau of Economic and Business
Research, coordinated by Chris McCarty and Scott Richards. Peer review of the manuscript was
provided by David Mulkey, Robert Degner, and Bill Messina.



Introduction

The nursery and greenhouse industry in the United States is the sixth largest major sector of
agriculture, with wholesale farm-level sales of about $11 billion in 1997 (NASS, 1999). The
southeast US is an important region for both production and marketing of ornamental plants
because of the favorable climate and relatively plentiful land and water resources.

Manufactured plastic nursery containers are widely used for horticultural production because of
their advantages of convenience and productivity over traditional field (in-ground) growing
systems. A recent survey of nursery growers in 22 states found that container-grown plants
represented two-thirds (67%) of overall production value, and in many states, including California,
Florida, Alabama, and Mississippi, over 80 percent of production is in nursery containers (Brooker,
Hinson, Turner, 2000). Purchase of nursery containers is a significant production expense for
growers, and is often the single largest direct cost item. According to data from Florida wholesale
nurseries, expenses for containers represented 5.4 percent of total operating costs, or 4.9 percent
of gross sales (Hodges, Satterthwaite and Haydu, 2000).

In recent years, the market for nursery containers has become more concentrated, and is
dominated by a small number of major firms. Nursery Supplies Inc. merged with Lerio/IEM in
March, 2000, leaving only two major producers of the commonly used blow-molded nursery
containers in large sizes, Nursery Supplies/Lerio, and ITML. Allegedly, this action has resulted in
reduced competition in this segment of the horticultural container market.

Most economic theory assumes perfect competition in the marketplace. Perfect competition brings
about the most efficient allocation of scarce resources, as costs of production and prices for
consumers are minimized (Goodwin and Drummond, 1982). Some attributes of perfectly
competitive markets include:
S Insignificance of the individual producing or consuming unit in relation to the total market,
such that all participants are "price takers".
* Homogeneity of product.
* Absence of artificial limitations on entry to or exit from the market.
* Stable and adequate supply of product.
* Widely available information about product features and prices.

In reality, however, most markets are not purely competitive. In the extreme case of monopoly (a
single producing firm), the market demand curve is the same as the firm's demand curve, so
increased sales volume results in a lower sale price and lower marginal revenue. Rational
monopolist firms may therefore restrict their production in order to maintain higher prices and
profits per unit.

The primary objective of this project was to assess the competitiveness in the market for
horticultural (nursery) containers in the southeast United States, through examination of brand
purchasing patterns, changes in prices paid for containers, and availability of container supplies.







Scope of Work and Methods


Primary information on use of different types and brands of nursery containers was collected
through a telephone survey of wholesale nursery firms conducted during September and October,
2000. Surveyed firms were located in the southeast US states of Alabama, Arkansas, Florida,
Georgia, Louisiana, Mississippi, North Carolina, South Carolina, and Tennessee. Telephone
interviews were performed under subcontract by the University of Florida, Bureau of Economic and
Business Research, using a computer-assisted telephone survey system. Interviewed firms were
qualified as having open field container production of woody ornamentals, and having produced
nursery plants for sale in 1999. Interview respondents were qualified as an owner, manager or
other person knowledgeable about purchasing practices of the firm.

Lists of telephone numbers for wholesale growers in each state were obtained from state
government agencies and industry trade associations. A total of over 10,000 wholesale nursery
firms were registered in these selected states. Telephone numbers were compiled for a sample of
3,597 nursery firms, drawn roughly in proportion to the total population of firms in each state.
Where possible, sampling was concentrated on larger firms in order to maximize the share of the
total market covered. For several states in which information was available on production area,
firms were selected which had at least 5 acres of production area. At least three attempts were
made to contact each firm listed. A total of 491 firms were interviewed for the study, representing a
sampling rate of about 5 percent. The number of respondents in each state are summarized in
Table 1. Over half of the firms were located in the state of Florida, consistent with its share of the
overall population

Table 1. Population and survey sample of ornamental plant nurseries in the
southeast United States
State Population Number Firms Number Percent
Wholesale Available in Respondents Respondents
Nurseries Sample List
Alabama 450 159 34 7%
Arkansas 120 22 3 1%
Florida 6,657 2,177 300 61%
Georgia 1,717 700 76 15%
Louisiana 500 138 12 2%
Mississippi 125 42 8 2%
North Carolina 264 216 37 8%
South Carolina 184 49 10 2%
Tennessee na 94 11 2%
All 10,017 3,597 491 100%

The telephone survey interview protocol was developed based upon input from nursery industry
representatives and information provided by Florikan, Inc. and its legal counsel. In order to obtain
general opinions about the market for nursery containers, and to pre-test the survey questionnaire,
focus groups of nursery managers were conducted with nursery managers in Apopka and Seffner,
FL, in August, 2000. The questionnaire was also reviewed by the University of Florida Institutional
Review Board to assure protection of the rights of survey respondents. The text of the survey
protocol is provided in the Appendix.







Respondent firms were characterized in terms of the number and types of ornamental plants
produced, production area, and business volume. Survey questions concerning purchase of
nursery containers addressed specific types (blow-molded, injection molded, vacuum-formed),
sizes (e.g. 1, 3, 5, 7 gallon), and manufacturer or brand name (Nursery Supplies, Lerio, IEM,
ITML, other). Respondents were asked about changes in prices for different types and brands of
containers, and about difficulties in obtaining needed supplies of containers.

Estimates of the value of container purchases and market share for the various container
manufacturer-brands in years 1999 and 2000 were developed based upon survey data for the
percentage of purchases of different types and brands of containers, weighted according to
estimated sales and total container purchases, as follows:
Vii = ,Er Bjix Tj, x K x S,

where V, is the total value of purchases of container type j and brand i,
Bjr is the percentage of total purchases of brand i for container type j by respondent r,
Tjr is the percentage of total container purchases of type j by respondent r,
K is a constant (0.0489) representing the ratio of container purchases to annual sales, and
Sr is the estimated annual sales of firm r.

Company annual sales were estimated at the midpoint of the sales range indicated (see Table 2),
and total value of container purchases were estimated at 4.89 percent of annual sales, based on
cost data for Florida nurseries (Hodges, Satterthwaite and Haydu, 2000).

The margin of error for estimation of the proportion of firms for a binary (yes-no) variable was
determined using the following formula: d =I t2 x p x q / n]05, where d is the relative margin of
error (percent), t is the tail area of Student's t distribution, p and q are the respective proportions of
the binary variable, and n is the sample number (Cochran, 1953). For t=2.69, representing an
alpha value of 0.05, this expression gives a 95 percent confidence interval for the estimated
proportion of firms that answered "yes" or "no". For the sample sizes in this survey, a margin of
error of plus-or-minus 3 to 6 percent was obtained, and is reported for each binary variable.


Findings of Focus Group Sessions

Focus groups were convened with selected nursery managers on August 8-9, 2000 at Apopka and
Seffner, Florida. At the Apopka session, eight nursery managers were present, including four
greenhouse growers and four woody ornamentals growers, while at Seffner, there were four
growers of woody ornamentals, plus an agricultural extension agent and a grower association
executive. Participants stated that Nursery Supplies/Lerio is now the only source for large (15+gal)
growing containers, and that large pots are difficult to get, with a waiting period up to 6 months.
Availability of certain types of specialty containers, such as 7+ gal. and plastic cell trays is also
very limited, and delivery times may be as long as 6-8 weeks. The market for blow-molded one
gallon containers is not as critical, but is less competitive now than previously. There is a belief
that the supply of pots is being artificially constrained by the manufacturerss. Most firms now
recycle pots to the degree possible, and purchase reused containers from dealers who specialize
in this, however, pots are now made thinner and are less durable. In both focus groups, growers
agreed that costs for nursery pots have increased 15 to 20 percent this year compared to last
year. However, it is unclear to what degree this may be attributed to reduced competition, as it was
noted that prices for nursery pots have historically fluctuated widely, due to cyclical variations in
raw material costs for plastic resins which are tied to petroleum commodity prices. There was a
general belief that other competitors will enter the container market if prices rise high enough. For
example, some other plastic molding manufacturers may be interested in the nursery pot business.








There was some talk of a grower cooperative to manufacture pots. It was learned that Nursery
Supplies is now building a large new plant in Kisimmee, and closing their operation in Mobile, AL.
Also, the "Kool-Ring" system was mentioned as a promising alternative to large (45+ gal)
containers, consisting of steel wire cages lined with porous fabric, and open on the bottom to allow
plants to root into the ground.


Survey Results

Characteristics of Surveyed Firms

Sales. Annual sales in 1999 for respondent firms are summarized in Table 2. Of the 491 firms
interviewed, roughly one-third (36%) of firms had sales of less than $250,000, another 30 percent
of firms had sales of $250 to $999 thousand, and 21 percent had sales of $1 million or greater,
including 3 percent greater than $5 million. Some 13 percent of respondents didn't know the firm's
annual sales or refused to answer this question. Total estimated sales of survey respondents
amounted to $402.9 million and sales per firm averaged $945,716.

Table 2. Number of firms by annual sales class, surveyed ornamental
plant nurseries in the southeast USA, 1999


Annual Sales Class


Number
RPesonrdAntc


Percent
Ricennrlnntc


less than $250,000
$250,000 $499,000
$500,000 $999,000
$1 million $2.4 million
$2.5 million $5 million
greater than $5 million
Don't know, Refused, Not Available
All


36%
15%
15%
14%
4%
3%
13%
100%


Production Area. Open field production area for respondent firms averaged 32.5 acres, with half
(50%) of firms having less than 10 acres, another third of firms having 10 to 49 acres, and 14
percent having 50 or more acres, as summarized in Table 3.


Table 3. Open field production area, surveyed ornamental plant
nurseries in the southeast USA


Production Area (acres)


Number
Respondents


Percent
Respondents


Less than 10 247 50%
10 to 24 103 21%
25 to 49 61 12%
50 or more 71 14%
Don't know, Refused, Not Available 9 2%
Average acreage 32.5


eI eIprv ll







Plant Types. The number and percentage of survey respondents who reported producing
different types of plants is given in Table 4, and the distribution of each plant type as a percentage
of their total production is represented in Figure 1. A majority of survey respondents reported
growing shrubs and other small woody plants (83%) or trees and larger woody plants (66%), while
a smaller number of respondents (18%) grew tropical foliage plants. Shrubs and small woody
plants represented most of production (80 to 100 percent) for 36 percent (176 of 491) of
respondents (Figure 1). Surveyed firms sold or grew an average of 103 different species or
varieties of plants, with one-third of firms having 24 or fewer plant species, and 41 percent of firms
having 50 or more species.

Table 4. Types of plants grown, surveyed ornamental
plant nurseries in the southeast USA


Type of Plant Product


Number
(percent*) of
Respondents


Shrubs and other small woody plants 409 (83%)
Trees and larger woody plants 326 (66%)
Tropical Plants 90 (18%)
Numbers represent firms with at least 1% of product type, and
percentages represent proportion of total 491 respondents.

Figure 1

Distribution of Different Types of Plants Produced


-


I-


20-39% 40-59% 60-79%
Percent of Production


80-100%


200
u,

v 150

0)
a100


~50
z


1-19%


* Shrubs and other small plants lb Trees and larger plants
E3 Tropical Plants


- -


I







Purchasing Patterns for Nursery Containers


Container Size. Different sizes of nursery containers purchased by survey respondents are
summarized in Table 5. Over three-quarters (79%) of respondents reported purchasing 1 to 3
gallon containers, about half of respondents purchased 5 to 7 gallon containers and 10 gallon or
larger containers (55%, 49%, respectively), and about one-third (34%) of respondents purchased
containers less than 1 gallon in size. A small number of respondents purchased other unspecified
sizes, and a few purchased none, presumably using containers from inventory or recycling pots.
The mean percentage of total container purchases reported by respondents for each container
size ranged from 19 percent for the 5-7 gallon size to 63 percent for the 1-3 gallon size (Table 5).
The distribution of purchases represented by each size of container is summarized by quintile
ranges in Figure 2.

Table 5. Sizes of nursery containers purchased, surveyed ornamental plant
nurseries in the southeast USA, year 2000.


Container Size


Number
Respondents
Purchasing


Percent
Respondents
Purchasing


Number
Respondents
Reporting
Percentage of
Purchases


Mean
Percentage of
Purchases


Less than 1 gallon 167 34% 151 31.7
1 to 3 gallon 387 79% 341 62.5
5 to 7 gallon 268 55% 230 19.0
10 gallons or larger 241 49% 207 28.9
Other size(s) 28 6%
None 10 2%
Don't know, Refused 6 1%
Figure 2

Distribution of Container Sizes Purchased
Surveyed Ornamental Plant Nurseries in the Southeast US, 2000


u 200

150-

. 100-
I-
*. 50-

z 0O


0-20


21-40 41-60 61-80 81-100
Percent of Purchases


* Less than 1 gallon 1 to 3 gallon
3 5 to 7 gallon [ 10 + gallons








Container Type. Information on the types of containers purchased by survey respondents in year
2000 is summarized in Tables 6 and 7 and Figure 3. A majority of respondents (61%) purchased
blow-molded containers, 27 percent purchased injection-molded or vacuum-formed hard cans, 15
percent purchased injection-molded or vacuum-formed flower or greenhouse pots, and 11 percent
purchased other unspecified types of containers (Table 6). A smaller number of respondents
reported the percentage of their total purchases for the various types of containers. The mean
percentage of total purchases reported was 82 percent for blow-molded containers, 60 percent for
injection-molded or vacuum-formed hard cans, 50 percent for injection-molded or vacuum-formed
flower or greenhouse pots, and 47 percent for other types of containers. Among the 270
respondents that indicated the percentage of total purchases for blow-molded containers, 165
(61%) indicated that this type of container represented between 81 and 100 percent of their total
purchases (Figure 3). For a significant minority of firms (36%), injection-molded or vacuum-
formed hard cans represented 81 to 100 percent of their purchases.

Table 6. Types of nursery containers purchased, surveyed ornamental plant nurseries in the
southeast USA, year 2000.


Type Container


Number Percent
Respondents Respondents
Purchasing


Number
Respondents
Reporting
Percentage of
Purchases


Blow-molded containers 300 61% 270 82.3
Hard cans (injection-molded or vacuum- 135 27% 117 60.2
formed)
Flowerpots (injection-molded or vacuum- 72 15% 62 50.4
formed)
Other 52 11% 39 47.2
None 16 3%
Don't know 48 10%

For those respondents that reported complete information on sales, and percentage of purchases
by type of container, the total value of container purchases was estimated at $16.6 million,
including $11.4 million or 68 percent for blow-molded containers, $3.6 million (22%) for hard cans,
$1.4 million (8%) for flower pots, and $245,000 (1%) for other types of containers (Table 7). The
mean value of purchases per firm ranged from $47,220 for blow-molded containers, to $7,209 for
other types of containers.

Table 7. Estimated value of container purchases, by type, surveyed ornamental plant nurseries in
the southeast USA, year 2000.


Type Container


Number Mean Per
Respondents Firm ($)


Standard
Error ($)


Total ($) Percent
of Total


Blow Mold Containers 241 47,220 4,529 11,380,128 68%
Hard Cans (injection-molded or vacuum formed) 108 33,373 4,587 3,604,235 22%
Flower Pots (injection-molded or vacuum 58 24,211 5,079 1,404,224 8%
formed)
Other Containers 34 7,209 1,842 245,111 1%
Total All Types 16,633,698


Mean
Percentage
of
Purchases








Figure 3
Distribution of Container Types Purchased
Surveyed Ornamental Plant Nurseries in the Southeast US, 2000
200 .


150 -


100


50


0-20


-JIVA


21-40 41-60 61-80
Percent of Purchases


81-100


I Blow molded U Hard cans 0 Flowerpots


_ I.


L







Container Brand Purchasing


Survey results on the different brands of nursery containers purchased currently (year 2000) and
last year (1999) are summarized in Table 8 and Figures 4 through 7.

For blow-molded containers, 78 percent of respondents reported purchasing in year 2000 from
Nursery Supplies/Lerio, 8 percent from ITML, and 19 percent from other manufacturers. By
contrast, in the previous year, 34 percent of respondents purchased from Nursery Supplies, 55
percent from Lerio/IEM, 6 percent from ITML, and 13 percent from other sources. Thus, the
percentage of growers purchasing blow-molded containers from Nursery Supplies/Lerio in 2000
(78%) was not quite as high as the combined total of those purchasing from Nursery Supplies plus
Lerio/IEM previously (34% plus 55%) (Table 8). The ITML brand and other brands were
purchased by a marginally higher percentage of growers in 2000 than in the previous year (8% vs.
6%, 19% vs. 13%, respectively). For respondents that reported the percentage of total purchases
for various brands of blow-molded containers, the mean percentage of purchases in year 2000
was 84 percent from Nursery Supplies/Lerio, 54 percent from ITML, and 54 percent from other
sources. In 1999, the comparable mean percentage of blow-mold container purchases was 79
percent from Nursery Supplies, 76 percent from Lerio/IEM, 41 percent from ITML, and 54 percent
from other sources. Nearly two-thirds (64%) of respondents purchasing from Nursery
Supplies/Lerio indicated that this brand represented 81 percent or more of their current purchases
of blow-molded containers (Figure 4). This represented roughly the same number of respondents
that previously purchased 81 percent or more of their containers from either Nursery Supplies or
Lerio/IEM (Figure 5).

For injection-molded or vacuum-formed hard cans, there was a generally similar pattern of results,
although the number of growers purchasing this type of container was much lower. The
percentage of growers purchasing from Nursery Supplies/Lerio in year 2000 (56%) was slightly
lower than the combined total purchasing from Nursery Supplies and Lerio/IEM in 1999 (22% plus
47%) (Table 8). Again, the percentage of growers purchasing of the ITML brand and other brands
in 2000 was marginally higher than the previous year (5% vs. 4%, 23% vs. 16%, respectively).
Purchases of injection-molded or vacuum-formed hard cans from Nursery Supplies/Lerio
represented 81 percent or more of total purchases for 52 growers in 2000 (Figure 6), compared to
18 from Nursery Supplies and 38 from Lerio/IEM in 1999 (Figure 7).

For injection-molded or vacuum-formed flower or greenhouse pots, 92 to 85 percent of
respondents that purchased this type of container in 2000 purchased from each of the
manufacturers, while a lower number and percentage of respondents (26% to 44%) purchased
any manufacturer brand in 1999 (Table 8). However, only a very small number of respondents
reported the percentage of their total purchases represented by each brand of this type of
container.







Table 8. Brands of nursery containers purchased in 1999 and 2000,
surveyed ornamental plant nurseries in the southeast USA.

Number
Number and
Percent* of Respondents Mean
Type-Period-Brand Respondents Reporting Percentage
Percentage of of Purchases
Purchasing Purchases
Blow-Molded Containers Purchased 2000
Nursery Supplies/Lerio 234 78% 215 84.0
ITML 23 8% 16 53.8
Other 57 19% 46 53.4
Don't Know, Refused 31 11%
Blow-Molded Containers Purchased 1999
Nursery Supplies 103 34% 90 79.3
Lerio/IEM 165 55% 143 75.7
ITML 17 6% 10 41.4
Other 39 13% 25 45.5
Don't Know, Refused 46 16%
Hard Cans (injection-molded or vacuum formed) Purchased 2000
Nursery Supplies/Lerio 75 56% 71 84.9
ITML 7 5% 6 40.0
Other 31 23% 28 49.1
Don't Know, Refused 38 28%
Hard Cans (injection-molded or vacuum formed) Purchased 1999
Nursery Supplies 30 22% 26 80.1
Lerio/IEM 64 47% 60 81.3
ITML 5 4% 3 70.0
Other 22 16% 18 58.1
Don't Know, Refused 37 27%
Flower Pots (injection-molded or vacuum formed) Purchased 2000
Nursery Supplies/Lerio 66 92% 6 68.3
ITML 61 85% 0 na
Other 65 90% 1 20.0
Don't Know, Refused 64 89%
Flower Pots (injection-molded or vacuum formed) Purchased 1999
Nursery Supplies 21 29% 9 88.9
Lerio/IEM 31 43% 20 56.6
ITML 19 26% 7 68.3
Other 32 44% 19 61.3
Don't Know, Refused 30 42%
*Percent of respondents represents share of respondents purchasing that type of container
in 2000 (see Table 6).







Figure 4
Distribution of Blow-Molded Container Brands Purchased Currently
Surveyed Ornamental Plant Nurseries in the Southeast US, 2000
160
S140
- 120 -
S10oo
e 80-
L 60-

E 40-
Z 20 -
0
1-20 21-40 41-60 61-80 81-100
Percent of Purchases


* Nursery Supplies/Lerio I ITML 0 Other


Figure 5
Distribution of Blow-Molded Container Brands Purchased Last Year
Surveyed Ornamental Plant Nurseries in the Southeast US,2000
100 1


80-

60 -

40-


21-40 41-60 61-80 81-100
Percent of Purchases


1 Nursery Supplies l LeriollEM E3 ITML N Other


1-20


~l~w .







Figure 6
Distribution of Hard Can Container Brands Purchased Currently
Surveyed Ornamental Plant Nurseries in the Southeast US,2000
60

5 50 -
or 40
* 30 -

S20 -

z 1 0
z
0
1-20 21-40 41-60 61-80 81-100
Percent of Purchases


U Nursery Supplies/Lerio f ITML E Other


Figure 7
Distribution of Hard Can Container Brands Purchased Last Year
Surveyed Ornamental Plant Nurseries in the Southeast US,2000
40

v 30
0
e 20

0 10


1-20 21-40 41-60 61-80 81-100
Percent of Purchases

U Nursery Supplies L LeriollEM E ITML H Other








Container Brand Market Share


The estimated value of purchases of various types and brands of nursery containers by survey
respondents, and their relative market share, are summarized in Table 9. Estimates of market
share for the various container manufacturer-brands represent the percentage of purchases of
each type, weighted according to estimated sales and total container purchases for each
respondent. Purchases of blow-molded containers by survey respondent in year 2000 were
estimated at $9.8 million, including $9.1 million or 92 percent from Nursery Supplies/Lerio,
$317,000 (3%) from ITML, and $465,000 (5%) from other brands (Table 9). In year 1999,
purchases of blow-molded containers by survey respondents totaled $9.6 million, with $5.0 million
or 52 percent from Nursery Supplies, $4.0 million (42%) from Lerio/IEM, $260,000 (3%) from
ITML, and $307,000 (3%) from other brands. So, the market share of Nursery Supplies/Lerio in
2000 was nearly equal to the combined market share of Nursery Supplies and Lerio/IEM the
previous year.

For hard can containers, a similar pattern of results was found. The total value of purchases of this
type of container by survey respondents was estimated at $2.2 million in year 2000. The market
share of Nursery Supplies/Lerio in 2000 (82%), was nearly equal to the combined market share of
Nursery Supplies and Lerio/IEM the previous year (24% and 61%, respectively) (Table 9).

Table 9. Value of blow-molded and hard can containers purchased and brand market share,
1999 and 2000, surveyed ornamental plant nurseries in the southeast USA.
Value of Purchases Market Share
Type-Brand-Period (Percent of Total Purchases,
Number Mean Per Standard Total ($) best estimate, and 95%
Respondents Firm ($) Error ($) confidence interval)
Blow Molded Containers Purchased 2000
Nursery Supplies/Lerio 185 48,964 5,536 9,058,391 92% (97%--85%)
ITML 14 22,644 6,751 317,009 3% (7%--1%)
Other brand 39 11,932 3,028 465,344 5% (9%--2%)
Total All Brands 9,840,745
Blow Molded Containers Purchased 1999
Nursery Supplies 77 65,269 10,476 5,025,712 52% (69%--36%)
Lerio/IEM 122 32,856 5,034 4,008,474 42% (59%--27%)
ITML 9 28,895 10,034 260,056 3% (7%--1%)
Other brand 22 13,953 4,665 306,973 3% (8%--1%)
Total All Brands 9,601,216
Hard Can (injection-molded or vacuum formed) Containers Purchased 2000
Nursery Supplies/Lerio 61 30,309 4,665 1,848,853 82% (96%--64%)
ITML 5 12,737 8,744 63,686 3% (10%--0%)
Other brand 26 12,769 4,509 332,000 15% (31%--4%)
Total All Brands 2,244,540
Hard Can (injection-molded or vacuum formed) Containers Purchased 1999
Nursery Supplies 22 27,062 5,293 595,373 24% (44%--12%)
Lerio/IEM 52 29,093 5,103 1,512,834 61% (82%--39%)
ITML 3 21,178 12,370 63,533 3% (9%--0%)
Other brand 17 18,399 6,631 312,777 13% (29%--3%)
Total All Brands 2,484,517







The uncertainty in these market share estimates due to possible errors in survey sampling was
reflected in 95 percent confidence intervals calculated using the mean value of purchases per firm,
plus or minus two times the standard error, multiplied by the number of respondents. The 95
percent confidence interval represents the range of values in which we can be 95 percent
confident that the true value lies. So, for example, the value of blow-molded containers purchased
in year 2000 from Nursery Supplies/Lerio ranged from a lower bound of $7.0 million [(48,964 (2 x
5,536)) x 185] to an upper bound of $11.1 million [(48,964 + (2 x 5,536)) x 185]. The upper and
lower bounds of the estimated container purchases within the confidence interval for each brand
were then used to determine the range in market share estimates indicated in Table 9. The
market share of blow-molded containers for Nursery Supplies/Lerio in year 2000 ranged from 85 to
97 percent. The market share of blow-molded containers for Nursery Supplies in 1999 ranged
from 36 to 69 percent, and the market share for Lerio/IEM ranged from 27 to 59 percent.


Container Price Changes

One of the most important indications of competitiveness in an industry is prices and price
changes over time. In particular, rapid increases in price could potentially indicate an
uncompetitive market, in the absence of other factors. Survey results regarding price changes
experienced by growers for different types and brands of containers are summarized in Tables 10
and 11 and Figures 8-10. Growers were asked "Has your business experienced higher prices for
containers this year compared to last year?" For blow-molded containers and injection-molded/
vacuum-formed hard cans, two-thirds or more of respondents answered in the affirmative,
indicating that prices in year 2000 were higher than in 1999 (Table 10). This finding was strongest
for blow-molded containers, with 79 percent of respondents indicating that this type had increased
in price. For injection-molded/vacuum-formed greenhouse pots, a lower percentage (49%) of
respondents reported that prices had increased. The margin of error (95 percent confidence
interval) for these results ranged from 3.5 to 10.7 percent, depending upon the number of
respondents reporting for each type of container. In other words, we can be 95 percent confident
that the true proportion of the entire population of nursery growers that experienced price
increases were within the range of the percentage indicated plus or minus the margin of error.

Table 10. Respondents that experienced higher prices for containers in year 2000
compared to 1999, surveyed ornamental plant nurseries in the southeast USA
(Number and Percent of Respondents).

Blow-Molded Injection-molded or Injection-molded or
Response Containers vacuum-formed hard vacuum-formed
cans greenhouse/flower pots
Yes 236 79% 89 66% 54 49%
No 51 17% 33 24% 37 34%
Don't know, Refused 13 4% 13 9% 19 17%
Margin of Error 3.5% 6.0% 10.7%
(95% confidence)


For blow-molded containers, 79 percent of respondents that purchased the Nursery Supplies/Lerio
brand indicated that prices have increased, compared to 100 percent of respondents for ITML, and
74 percent for other brands (Table 11). For those respondents indicating the magnitude of
increased prices for blow-molded containers, the average percentage increase was 16.6 percent
for the Nursery Supplies/Lerio brand, 14.5 percent for ITML, and 15.6 percent for other unspecified








brands (Table 11). The distribution of respondents reporting price increases for each brand of blow
molded container is given in Figure 8, for ranges of 1 to 10 percent, 11 to 20 percent, 21 to 30
percent, and 31 percent or more.

For injection-molded or vacuum-formed hard cans, 88 percent of respondents indicated that prices
have increased for Nursery Supplies/Lerio, 100 percent for ITML and 68 percent for other brands
(Table 11). For those respondents indicating the magnitude of price increases for hard cans, the
average percentage increase was 13.7 percent for Nursery Supplies/Lerio, 14.7 percent for ITML,
and 8.5 percent for other brands. The distribution of respondents reporting price increases for
each brand of hard can container is given in Figure 9.

For injection-molded/vacuum-formed greenhouse or flower pots, 33 percent of respondents
indicated that prices have increased for Nursery Supplies/Lerio brand, compared to 20 percent for
ITML and 23 percent for other brands (Table 11). For those respondents indicating the magnitude
of price increases, the average price increase was 13.3 percent for the Nursery Supplies/Lerio
brand, 12.3 percent for ITML, and 18.2 percent for other brands. The distribution of respondents
reporting price increases for each brand of greenhouse/flower pots is given in Figure 10.

Table 11. Brands of containers that have increased in price between 1999 and 2000,
and magnitude of price increase, surveyed ornamental plant nurseries in the southeast
USA
Number Standard
Number and Respondents Mean Price Error of Price
Type-Manufacturer/Brand Percent* of Reporting Increase Increase
Respondents Magnitude of (percent) (percent)
Increase
Blow-Molded Containers
Nursery Supplies/Lerio 184 79% 132 16.6 1.1
ITML 23 100% 17 14.5 3.2
Other 42 74% 5 15.6 2.1
Hard Cans (injection-molded or vacuum formed)
Nursery Supplies/Lerio 66 88% 49 13.7 1.0
ITML 7 100% 9 14.7 2.2
Other 21 68% 2 8.5 1.1
GreenhouselFlower Pots (injection-molded or vacuum formed)
Nursery Supplies/Lerio 22 33% 24 13.3 1.5
ITML 12 20% 11 12.3 1.1
Other 15 23% 16 18.2 4.0
*Percent of respondents represents share of respondents purchasing that type and brand of
container in 2000 (see Table 8).








Figure 8
Distribution of Price Increase for Blow Molded Containers
Surveyed Ornamental Plant Nurseries in the Southeast US, 2000
60

S50
S 40







Percent Price Increase

Nursery Supplies/Lerio 0 ITML E2 Other

Figure 9
Distribution of Price Increase for Hard Can Containers
Surveyed Ornamental Plant Nurseries in the Southeast US, 2000
30,
8 20

z
0
1-10 11-20 21-30 31-40 41-50 51-60 61+
Percent Price Increase

U Nursery Supplies/Lerio 5 ITML W Other

Figure 9
Distribution of Price Increase for Hard Can Containers
Surveyed Ornamental Plant Nurseries in the Southeast US, 2000
30


1-10 11-20 21-30 31-40
Percent Price Increase

I Nursery Supplies/Lerio E ITML E Other


S20
|25
e 15



z
0








Figure 10
Distribution of Price Increase for Flower Pots
Surveyed Omamental Plant Nurseries in the Southeast US, 2000
16
, 14




6 -
4 -
12
z 0
1-10 11-20 21-30 31-40 41-50 51-60 61+
Percent Price Increase

Nursery Supplies/Lerio 5 ITML 0 Other







Raw Material Costs for Container Manufacturing


An important consideration in assessing the competitiveness of a market is the cost of production.
In competitive markets, it is expected that changes in cost of production will be passed on to
consumers as proportionate increases in the price of finished products. To examine the raw
material cost for manufacturing horticultural containers, data were obtained on prices for high
density polyethylene resins, including blow-molding and injection-molding types, from 1998
through 2000 (Chemical Market Reporter), and these data are plotted in Figure 11. Prices for
these plastic resins decreased during the latter part of 1998, then increased during 1999, and
stabilized during the year 2000. The price for blow-molding type resins increased from an average
of $0.411 per pound in 1999 to $0.480 in 2000, representing a 16.8 percent increase, while the
price for injection-molding resins increased from $0.452 to $0.500, a 10.7 percent increase. In
comparison of material prices before and after the March 2000 merger of Nursery Supplies and
Lerio/IEM, prices for blow-molding resins increased from $0.409 to $0.480 per pound (17.4%), and
injection-molding resins increased from $0.457 to $0.494 per pound (8.1%). The magnitude of
these raw material price increases are similar to the magnitude of price increases for nursery
containers. It should be noted that these prices are for virgin or food grade plastic resins.
Horticultural container manufacturers often use reprocessed plastics, which may be somewhat
less expensive, however, the price trends for virgin plastics are probably representative of recycled
plastics as well.


Figure 11
Prices for Polyethylene Resin, March 1998 to January 2001
High density, general purpose, hopper car loads, blow-molding and injection mol
0.55
10 Blow-Molding Type
S0.50 ---
o Injection Molding Type
'0.45 ---

0.40

O 0.35 -

0.30

c a CLu : a OL U

Month-Year
Source: Chemical Market Reporter (first week of each month)
Note: prices represent average of high and low values reported







Availability of Container Supplies


Another indicator of industry competitiveness is the availability of a product. Lack of availability of
a product could potentially indicate that the market is less than perfectly competitive. Responses to
the question "Has your business experienced difficulty in obtaining the types and quantities of
containers you require this year?", are summarized in Table 12. For blow-molded containers, 43
percent (+/- 4.7%) of survey respondents indicated "yes" that they have had difficulty in obtaining
the containers needed. For injection-molded or vacuum-formed hard cans, a similar percentage
(42% +/- 6.8%) said that they had difficulty in obtaining container supplies. For injection-molded or
vacuum-formed greenhouse of flower pots, a substantially lower percentage (21% +/- 6.3%) of
respondents had this difficulty.

Table 12. Respondents experiencing difficulty in obtaining the types and quantities of
containers required, surveyed ornamental plant nurseries in the southeast USA
(Number and Percent of Respondents)

Blow-Molded Injection-molded or Injection-molded or
Response ner Vacuum-formed hard Vacuum-formed
cans greenhouse pots
Yes 127 43% 58 42% 23 21%
No 166 56% 75 55% 77 71%
Don't know, Refused 5 2% 4 3% 9 8%
Margin of Error 4.7% 6.8% 6.3%
(95% confidence)


Preferences for Use and Substitution of Different Types of Containers

A final indicator of competitiveness in the industry concerns the adoption of substitute products. It
has been suggested that many growers are now using injection-molded or vacuum-molded
"flower" or "greenhouse" pots for open field production, because of limited availability or because
prices for blow-molded containers have risen too high. Although flower or greenhouse pots are
not designed for extended use in outdoor growing situations, they apparently can be used for this
application with some sacrifice in utility. To address this issue, survey respondents were asked two
questions:
S In open-field production, if a blow-molded container or an injection-molded or vacuum-
molded hard can is available and adequate for a particular plant, do you ordinarily use that
type of container?, and
S In open-field production, do you ordinarily use injection-molded or vacuum-molded "flower"
or "greenhouse" pots?

Responses to these two questions are summarized in Table 13. For the first question, 73 percent
(+/-3.1%) of respondents answered in the affirmative. For the second question, 37 percent
answered "yes" and 54 percent answered "no" (+/- 3.7%). In other words, nearly three-quarters of
nursery growers would prefer to use blow-molded containers or injection-molded/vacuum-formed
hard cans, however, about one third did use flower or greenhouse pots.







Table 13. Preferences for use of different container types for open field production,
surveyed ornamental plant nurseries in the southeast USA
Ordinarily use blow-molded Ordinarily use injection-molded or
Response containers or injection- vacuum-molded "flower" or
molded/vacuum-formed hard cans "greenhouse" pots for open field
for open field production production
Number Percent of Number Percent of
Respondents Respondents Respondents Respondents
Yes 313 73% 157 37%
No 85 20% 234 54%
Don't know, Refused 32 7% 39 9%
Margin of Error (95% confidence) 3.1% 3.7%


Conclusions

A representative survey of wholesale nursery growers in 9 states of the southeast US regarding
their purchases of horticultural containers showed that the consolidated manufacturer Nursery
Supplies/Lerio currently has a dominant market position, with 78 percent of growers purchasing
some of their blow-molded containers, 56 percent purchasing their injection-molded/vacuum-
formed hard cans, and 92 percent purchasing their injection-molded/vacuum-formed flower pots.
Taking into account the size of firms and the percentage of their total purchases reported for each
type and brand of container, the market share for Nursery Supplies/Lerio was estimated at 92
percent for blow-molded containers and 82 percent for hard cans. The market share of blow-
molded and hard can containers for Nursery Supplies/Lerio in year 2000 was nearly equal to that
for the previously separate manufacturers Nursery Supplies and Lerio/IEM in 1999. The market
share for a third major manufacturer, ITML, and the other independent manufacturers, has
remained about the same. These results suggest that the nursery grower customers have rather
strong brand loyalties, and that the markets for Nursery Supplies and Lerio were largely
independent and complementary. A majority of respondents indicated that prices paid for blow-
molded and hard can containers increased by 10 to 20 percent between 1999 and 2000.
However, this change in prices reflects a commensurate increase in raw material costs for plastic
resins used in container manufacturing. About 43 percent of growers surveyed indicated that they
had experienced difficulty in obtaining needed supplies of both blow-molded and hard can
containers. About three-quarters of respondents indicated that they prefer to use blow-molded
containers or injection molded hard cans for growing woody ornamentals, however, about a third
of growers reported using greenhouse/flower pots for open field production of woody ornamentals.
A somewhat higher number of growers reported purchasing of greenhouse/flower pots in 2000
than in 1999. Taken together, these results indicate that there certainly was potential for
competition in the horticultural container market in this region to be adversely affected by the
dominance of Nursery Supplies/Lerio. However, the fact that prices increases for containers were
similar to increases in the cost of virgin plastic raw materials for container manufacturing suggest
that normal market factors were in effect, and that consumers have not yet suffered unduly
increased costs for nursery containers.







References


Brooker, J.R., R.A. Hinson and S.C. Turner, 2000. Trade flows and marketing practices within the
United States nursery industry: 1998. Southern Cooperative Series Bulletin 397
(http://web.utk.edu/~brooke00/research/scb397.pdf).

Chemical Market Reporter, Schnell Publications.

Cochran, W.G., 1953. Sampling Techniques, 2nd edition. John Wiley & Sons, NY, pp. 74-75.

Goodwin, J.W. and H.E. Drummond, 1982. Agricultural Economics. 2nd Ed., Reston Publishing,
Reston, Va.

Hodges, A.W. and J.J. Haydu, 2000. A decade of change in Florida's ornamental plant nursery
industry, 1989-99. Economic Information Report E100-03, University of Florida, Food & Resource
Economics Department, April 2000. (http://www.ifas.ufl.edu/-hort$/).

Hodges, A.W., L.N. Satterthwaite, and J.J. Haydu, 2000. Business analysis of ornamental plant
nurseries in Florida, 1998. Economic Information Report EIR 00-05, University of Florida, Food &
Resource Economics Department, November 2000. (http://www.ifas.ufl.edu/~hort$/).

Johnson, D.C. 1999. Floriculture and Environmental Horticulture Situation and Outlook Report.
FLO-1999, Economic Research Services, U.S. Department of Agriculture, Washington, D.C.

National Agricultural Statistics Service (NASS), 1999. Census of Agriculture, 1997. U.S.
Department of Agriculture, Washington, D.C. (http://www.nass.usda.gov/census/).









Appendix--Interview Protocol for Telephone Survey of Wholesale Nurseries


Question HELLO
Hello, my name is I'm calling from the
University of Florida on behalf of the Institute of Food and
Agricultural Sciences. We are conducting a survey about
nursery irrigation and purchasing of horticultural containers.
INTERVIEWER: PRESS 1 TO CONTINUE WITH SURVEY
PRESS CTRL/END TO TERMINATE CALL

Hello, my name is I'm calling from the
University of Florida for a survey of nursery growers. We
started an interview a few days ago about the nursery
business. May we continue?
PRESS 1 TO CONTINUE WITH SURVEY

Question HOME
May I speak to the person most knowledgeable about the
purchasing of supplies for the business, and about its irrigation
practices?
1 You have the person on the line
2 Person passes the phone
3 No one is present who knows about the purchase issues

Question NOTHANK
As we are only interviewing the person most knowledgeable
about irrigation practices and supply purchasing for the
business, I do not have any other questions for you. We will
call back at a later time. Thank you for talking to me.
INTERVIEWER -- PRESS CTRL/END AND SELECT
CALLBACK

Question TAKETWO
Hello, my name is I'm calling from the
University of Florida. This is not a sales call in anyway. We
are simply interested in your opinions. According to our
selection procedures, I need to interview the most
knowledgeable person in your nursery about irrigation
practices and supply purchasing.
PRESS 1 TO CONTINUE WITH SURVEY

Question RNAM
Your phone number was randomly selected from a list of
businesses similar to yours. Your answers will be completely
confidential and you do not have to answer any questions you
do not wish to answer. Responses will not be publicly identified
with your name or the company's. IF
NECESSARY it should take less than 10 minutes.
May I have your first name?

RECORD SEX OF RESPONDENT (NOT INFORMANT)
1 Male
2 Female

Question Q1
Did your company produce nursery plants for sale last year
(1999)?
1 Yes
2 No
-8 Don't know
-9 Refused

Question Q2
Does your nursery have open field container production of
woody ornamentals? INT:(BIRCH, BEECH, MAPLE, and
DOGWOOD trees are examples of woody ornamentals)
1 Yes
2 No
-8 Don't know
-9 Refused

Question Q2a


How many acres of open field production area did you have
last year?
(0-999)
-8 Don't know
-9 Refused

Question Q3
Approximately how many species of plants did you sell (or
grow) last year?
(1-999)
-8 Don't know
-9 Refused

Question Q4a
Which of the following types of nursery plants do you grow,
and what percentage of your total production does each
represent.

Do you grow shrubs and small landscape materials?
1 Yes
2 No
-8 Don't Know
-9 Refused

Question Q4b
What percentage of your total production do shrubs and
landscape materials represent?
(0-100)
-8 Don't Know
-9 Refused

Question Q4c
Do you grow trees and larger landscape materials?
1 Yes
2 No
-8 Don't Know
-9 Refused

Question Q4d
What percentage of your total production do trees and
larger landscape materials represent?
(0-100)
-8 Don't Know
-9 Refused

Question Q4e
Do you grow tropical plants for interiorscapes?
1 Yes
2 No
-8 Don't Know
-9 Refused

Question Q4f
What percentage of your total production do tropical
plants for interiorscapes represent?
(0-100)
-8 Don't Know
-9 Refused

Question Q19
Which of the following sizes of nursery containers do you
purchase?
Less than 1 gallon
1 to 3 gallon
5 to 7 gallon
10 gallons or larger
Other size(s)
None
Don't know
Refused










Question Q19a
What percentage of your total purchase does a less than 1
gallon container amount to?
(0-100)
-8 Don't know
-9 Refused

Question Q19b
What percentage of your total purchase does a 1 to 3 gallon
container amount to?
(0-100)
-8 Don't know
-9 Refused

Question Q19c
What percentage of your total purchase does a 5 to 7 gallon
container amount to?
(0-100)
-8 Don't know
-9 Refused

Question Q19d
What percentage of your total purchase does a greater than
10 gallon container amount to?
(0-100)
-8 Don't know
-9 Refused

Question CHECK
Your percentages must total 100 and they do not. They equal
.We need to go back and change some things.
INT: PRESS 2 TO GO BACK & CORRECT %s
IF RESPONSES INCLUDE -8, -9, ETC. JUST CONTINUE
PRESS 1 TO CONTINUE
PRESS 2 TO GO BACK & RE-ENTER %s

Question Q20
Which of the following types of nursery containers do you
purchase?
Blow-molded field-growing containers
Injection-molded/vacuum formed "hard cans"
Injection-molded or vacuum-formed flower or "greenhouse
pots"
Other
None
Don't know
Refused

Question Q21a
What percentage of your total purchases do blow-molded
field-growing containers represent?
(0-100)
-8 Don't know
-9 Refused

Question Q21b
What percentage of your total purchases do Injection-molded
or "vacuum-formed hard cans" represent?
(0-100)
-8 Don't know
-9 Refused

Question Q21c
What percentage of your total purchase do injection-molded or
vacuum formed "flower" or "greenhouse pots" represent?
(0-100)
-8 Don't know
-9 Refused

Question Q21d
What percentage of your total purchase do other types of


containers represent?
(0-100)
-8 Don't know
-9 Refused

Question Q21back
Your percentages must total 100 and they do not. They equal
We need to go back and change some things.
INT: PRESS 2 TO GO BACK & CORRECT %s
IF RESPONSES INCLUDE -8, -9, ETC. JUST CONTINUE
PRESS 1 TO CONTINUE
PRESS 2 TO GO BACK & RE-ENTER %s

Question Q22
What brands of blow-molded field-growing containers do you
purchase CURRENTLY?
Nursery Supplies/Lerio
ITML
Other
Don't Know
Refused

Question Q22A
What percentage of your total purchases does NURSERY
SUPPLIES/LERIO brand of blow-molded field-growing
containers represent? INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q22b
What percentage of your total purchases do ITML brand of
blow-molded field growing containers represent?
INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q22c
What percentage of your total purchases do OTHER brands of
blow-molded field-growing containers represent?
INT: INTERVIEWER IF YES THEN ENTER THE
PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q22back
Your percentages must total 100 and they do not. They equal
.We need to go back and change some things.
INT: PRESS 2 TO GO BACK & CORRECT %s
IF RESPONSES INCLUDE -8, -9, ETC. JUST CONTINUE
PRESS 1 TO CONTINUE
PRESS 2 TO GO BACK & RE-ENTER %s

Question Q23
What brands of blow-molded field-growing containers did you
purchase LAST YEAR?
Nursery Supplies
Lerio/IEM
ITML
Other
Don't Know
Refused

Question Q23a
What percentage of your total purchases did NURSERY
SUPPLIES brand of blow-molded field-growing containers
represent last year? INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused










Question Q23b
What percentage of your total purchases did Lerio/IEM
brand of blow-molded field-growing containers represent
last year? INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q23c
What percentage of your total purchases did ITML brand of
blow-molded field-growing containers represent last year?
INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q23d
What percentage of your total purchases did OTHER brands
of blow molded containers represent last year? INT: ENTER
THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q23back
Your percentages must total 100 and they do not. They equal
We need to go back and change some things.
INT: PRESS 2 TO GO BACK & CORRECT %s
IF RESPONSES INCLUDE -8, -9, ETC. JUST CONTINUE
PRESS 1 TO CONTINUE
PRESS 2 TO GO BACK & RE-ENTER %s

Question Q25
Has your business experienced higher prices for blow-molded
field-growing containers this year compared to last year?
1 Yes
2 No
-8 Don't Know
-9 Refused

Question Q25a
What brands have increased in price?
Nursery Supplies/Lerio
ITML
Other
Don't Know
Refused

Question Q25aa
How much has Nursery Supplies/Lerio brand increased?
1-1000%)
-8 Don't Know
-9 Refused

Question Q25ab
How much has ITML brand increased?
1-1000%)
-8 Don't Know
-9 Refused

Question Q25ac
How much have Other brands increased?
(1-1000%)
-8 Don't Know
-9 Refused

Question Q26
Has your business experienced difficulty in obtaining the types
and quantities of blow-molded field-growing containers you
require this year?
1 yes


2 no
-8 Don't Know
-9 Refused

Question Q26a
In what way has your business experienced difficulty?
Please describe.
1 (Has Answer)
-8 Don't Know
-9 Refused

Question Q27
What brands of Injection-molded and vacuum-formed hard
cans do you purchase CURRENTLY?
Nursery Supplies/Lerio
ITML
OTHER (PLEASE SPECIFY)
Don't know
not available

Question Q27A
What percentage of your total purchases do Nursery
Supplies/Lerio brand of Injection-molded and vacuum-formed
hard cans represent?
INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q27b
What percentage of your total purchases do ITML brand of
Injection-molded and vacuum-formed hard cans represent?
INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q27c
What percentage of your total purchases do OTHER brands of
Injection-molded or vacuum-formed hard cans represent?
INT: INTERVIEWER IF YES THEN ENTER THE
PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q27back
Your percentages must total 100 and they do not. They equal
We need to go back and change some things.
INT: PRESS 2 TO GO BACK & CORRECT %s
IF RESPONSES INCLUDE -8, -9, ETC. JUST CONTINUE
PRESS 1 TO CONTINUE
PRESS 2 TO GO BACK & RE-ENTER %s

Question Q28
What brands of Injection-molded or vacuum-formed hard cans
did you purchase LAST YEAR?
Nursery Supplies
Lerio/IEM
ITML
Other
Don't Know
Refused

Question Q28a
What percentage of your total purchases did NURSERY
SUPPLIES brand of Injection-molded or vacuum-formed hard
cans represent last year?
INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused










Question Q28b
What percentage of your total purchases did Lerio/IEM
brand of Injection-molded or vacuum-formed hard cans
represent last year? INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q28c
What percentage of your total purchases did ITML
brand of Injection-molded or vacuum-formed hard cans
represent last year?
INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q28d
What percentage of your total purchases did OTHER
brands of Injection-molded or vacuum-formed hard cans
represent last year?
INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q28back
Your percentages must total 100 and they do not. They equal
.We need to go back and change some things.
INT: PRESS 2 TO GO BACK & CORRECT %s
IF RESPONSES INCLUDE -8, -9, ETC. JUST CONTINUE
PRESS 1 TO CONTINUE

PRESS 2 TO GO BACK & RE-ENTER %s

Question Q29
Has your business experienced higher prices for
Injection-molded or vacuum-formed hard cans this year
compared to last year?
1 yes
2 no
-8 Don't Know
-9 Refused

Question Q29a
What brands have increased in price?
Nursery Supplies/Lerio
ITML
Other
Don't Know
Refused

Question Q29aa
By how much has Nursery Supplies/Lerio brand increased?
(1-1000%)
-8 Don't Know
-9 Refused

Question Q29ab
By how much has ITML brand increased?
(1-1000%)
-8 Don't Know
-9 Refused

Question Q29ac
How much have Other brands increased?
(1-1000%)
-8 Don't Know
-9 Refused

Question Q30


Has your business experienced difficulty in obtaining the types
and quantities of Injection-molded or vacuum-formed hard
cans you require this year?
1 yes
2 no
-8 Don't Know
-9 Refused

Question Q30a
In what way has your business experienced difficulty?
PLEASE DESCRIBE.
1 has answer
-8 Don't Know
-9 Refused

Question Q30bl
What brands of injection-molded or vacuum-formed flower or
greenhouse pots do you *currently purchase*?
Nursery Supplies/Lerio
ITML
Other
Don't Know
Refused

Question Q30b2
What percentage of your total purchases did NURSERY
SUPPLIES/LERIO brand of injection-molded or
vacuum-formed flower or greenhouse pots containers
represent last year?
INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q30b3
What percentage of your total purchases did ITML
brands of injection-molded or vacuum-formed flower or
greenhouse pots represent last year?

INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q30b4
What percentage of your total purchases did OTHER
brands of injection-molded or vacuum-formed flower or
greenhouse pots represent last year?
INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q30back
Your percentages must total 100 and they do not. They equal
We need to go back and change some things.
INT: PRESS 2 TO GO BACK & CORRECT %s
IF RESPONSES INCLUDE -8, -9, ETC. JUST CONTINUE
PRESS 1 TO CONTINUE
PRESS 2 TO GO BACK & RE-ENTER %s

Question Q31
What brands of injection-molded or vacuum-formed flower or
greenhouse pots did you purchase *last year*?
Nursery Supplies
Lerio/IEM
ITML
Other
None-- no injection/vacuum pots.
Don't Know
Refused









Question Q31a
What percentage of your total purchases did NURSERY
SUPPLIES brand of injection-molded or vacuum-formed
flower or greenhouse pots containers represent last year?
INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q31b
What percentage of your total purchases did Lerio/IEM
brand of injection-molded or vacuum-formed flower or
greenhouse pots represent last year?

INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q31c
What percentage of your total purchases did ITML
brand of injection-molded or vacuum-formed flower or
greenhouse pots represent last year?
INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q31d
What percentage of your total purchases did OTHER
brands of injection-molded or vacuum-formed flower or
greenhouse pots represent last year?
INT: ENTER THE PERCENTAGE.
(0-100%)
-8 Don't Know
-9 Refused

Question Q31back
Your percentages must total 100 and they do not. They equal
We need to go back and change some things.
INT: PRESS 2 TO GO BACK & CORRECT %s
IF RESPONSES INCLUDE -8, -9, ETC. JUST CONTINUE
PRESS 1 TO CONTINUE
PRESS 2 TO GO BACK & RE-ENTER %s

Question Q32
Has your business experienced higher prices for
injection-molded or vacuum-formed flower or greenhouse
pots containers this year compared to last year?
1 Yes
2 No
3 No-doesn't buy injection/vacuum pots
-8 Don't Know
-9 Refused

Question Q32a
What brands have increased in price?
Nursery Supplies/Lerio
ITML
Other
Don't Know
Refused

Question Q32aa
By how much has Nursery Supplies/Lerio brand increased?
(1-1000%)
-8 Don't Know
-9 Refused

Question Q32ab
By how much has ITML brand increased?
(1-1000%)


-8 Don't Know
-9 Refused

Question Q32ac
How much have Other brands increased?
(1-1000%)
-8 Don't Know
-9 Refused

Question Q33
Has your business experienced difficulty in obtaining the types
and quantities of injection-molded or vacuum-formed flower or
greenhouse pots you require this year?
1 yes
2 no
3 No-doesn't buy injection/vacuum pots
-8 Don't Know
-9 Refused

Question Q33a
In what way has your business experienced difficulty?
Please describe.
1 (Has Answer)
-8 Don't Know
-9 Refused

Question Q40
In OPEN-FIELD production, if a blow-molded container, an
injection- molded or vacuum-molded hard can is available and
adequate for a particular plant, do you ordinarily use that type
of container?
1 yes
2 no
-8 Don't Know
-9 Refused

Question Q43a
Why?
1 has answer
-8 don't know
-9 not available

Question Q43b
Why not?
1 has answer
-8 don't know
-9 not available

Question Q44
In OPEN-FIELD PRODUCTION, do you ordinarily use
injection-molded or vacuum-molded "flower" or "greenhouse"
pots? (INT: DO THEY USE EITHER TYPE OF POT? IF SO,
ANS. IS YES.)
1 yes
2 no
-8 Don't Know
-9 Refused

Question Q44a
Why?
1 has answer
-8 don't know
-9 not available

Question Q44b
Why not?
1 has answer
-8 don't know
-9 not available

Question Q45
Please indicate which of the following categories describes









the annual sales of your company last year?
(CHOOSE ONE)
less than $250,000
$250,000 $499,000
$500,000 $999,000
$1 million $2.4 million
$2.5 million $5 million
greater than $5 million
Don't know / Refused to answer
Not available

Question THANKS
We can only ask questions of companies who produced
nursery plants for sale last year (1999) and nurseries who
have open field container production of woody ornamentals.
Thank you very much for your patience and cooperation.
PRESS G TO CONTINUE DO NOT HIT CTRL/ENTER OR
QUIT!!!!!

Question THANKYOU
This concludes the interview. Thank you very much for your
patience and cooperation. PRESS G TO CONTINUE
DO NOT HIT CTRL/ENTER OR QUITI!!!! IF YOU DO THIS
WILL NOT BE COUNTED AS A COMPLETE!!!!!




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