Business Barometer October 2011

Water Garden News regularly surveys koi, pond and water garden companies about their business climate and sales trends. Respondents are granted anonymity. These responses came from an October 28 survey.

Progressive Companies Faring Well
A green industry product distributor in La Center, Wash.
We are doing pretty well this year, and it’s pretty similar to this time last year. The improvement is not reflective of the market being better; it has 1 to 2 percent growth because of product inflation.

Our manufacturers held off as long as they could on price increases. Because of the rising costs of materials, they had to increase their prices this year.

With the economic downturn, we chose to take some of the riskier customer segments, such as the commercial market, off the table. We’ve started putting the higher risk back on the table, and it’s worked for us.

When things started to recede, the waterscaping segment was the most affected. It was strictly consumer caution. Waterscaping was seen as an unnecessary expense.

Even before the economic crash, we started feeling a backlash against water features because so many were built improperly and required a lot of maintenance. There was a lot of negativity toward water features. Coupled with the recession, it devastated the segment.

We’ve seen the smaller pondless features come back pretty strong in the last 12 to 18 months. People like water, they just don’t want to maintain it.

There also have been some replacement opportunities. Some water features are getting older and need the improved and more energy efficient products now available. Replacing pumps and lighting for more energy-efficient options as well as moving from submersible to external pumps are strong right now.

Companies that focused on the maintenance side of their businesses are stronger. Those who have been progressive in their thought process of opening up a broader range of services offered certainly are starting to fare very well. Their ability to go to a residential or commercial site and say, “You need us to come in to mow, blow and trim, but while we’re here we can upgrade your lighting and water feature pump to be more progressive and energy efficient.”

Early Buy Orders Up
Pond product manufacturer in Cape Coral, Fla.
The water garden industry continues to be our No. 1 industry as far as sales and one of our top 3 market segments since 2001. At most shows this year, the early buy orders were above last year. Hard goods were impacted more than us because we are a consumable. People continue to maintain their ponds and feed their fish.

The aquarium industy was hurt more than water garden industry. When people make a substancial investment in their yards, they are less likely to fill it in and relandscape. Aquariums are easier to shut down for the time being. The last couple years in Europe and the United States, the aquarium industry has been in decline.

A related growth area is water harvesting. It makes a lot of sense in larger features.

Year-to-date Sales Up
Pond product manufacturers representative in Crystal Lake, Ill.
Our sales are up about 10 to 11 percent year-to-date. We’re up in commercial lighting, municipal projects, water gardening and related products. We’re flat-to-down in irrigation products.

I’m hearing cautious optimism because people say it cannot get worse. It can get worse, but I don’t think it will. Everyone’s planning on a good 2012. I’m looking for 15 percent growth for next year.

We’re working harder than ever to get less. We’re focusing more on lines that are not as harmed by a bad economy or housing market. Lines like irrigation are not going to do well in this housing market, but maintenance and repairs are doing well. We’re focusing very hard on LED with lighting.

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Business Barometer October 2011

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