Following a modest resurgence in 2011, the landscape maintenance and lawn care business is poised for more growth this year. Both residential and commercial clients are showing signs of loosening up, and contractors are deploying strategies to make 2012 their best showing in several years.
Just look at what some of the industry's giants are saying.
TruGreen, the Green Industry's largest service provider with annual sales in excess of $1 billion, had a relatively flat 2011. This was primarily due to a reduction in full service-program accounts. However, the company's new president, Tom Brackett, is feeling optimistic about growth this year. Several changes have been implemented recently that are already working to reverse some of the negative trends that hindered growth in 2011.
"We are pleased with our customers' response to the TruGreen Healthy Lawn Plan," Brackett says. "We created this service based on customer feedback combined with individual agronomic programs based on climate zones in our service areas. The Healthy Lawn Plan is a more comprehensive service than we've offered in the past, and customer response has been powerful. As we continue to systemically improve our service delivery standards, feedback from our customers has been great."
ValleyCrest's sales grew 1.7% last year to $850 million. Things could improve even more this year. Sources at the company say that, as a result of several "market changes," there is quite a bit of additional work it plans to bid on in 2012.
Chapel Valley Landscape has a similar view. “We’re certainly seeing more interest in buying as there are a lot more jobs and projects on the market,” says Landon Reeve, founder and chairman. “So while this isn’t going to be a knock-your-socks-off year, it’s definitely going to be a big improvement over what we’ve been going through." With annual sales near $30 million, Chapel Valley Landscape serves Maryland, Virginia and Washington, D.C.
'Average-size' companies also faring well
It's not just the big boys that are more optimistic about business conditions. According to a fall survey of Green Industry PRO readers, 58% expect maintenance sales to grow this year while 49% expect lawn care sales to grow. On the other hand, less than 10% expect maintenance and/or lawn care sales to dip.
Since 90% of landscape companies employ fewer than 20 people, we're talking about a lot of average-size companies that are feeling pretty good about their chances of remaining competitive.
One example is lawn care contractor Mark Schlossberg. His company, Pro-Lawn-Plus in Baltimore, MD, grew sales 6% in 2010 and another 5% last year. Schlossberg is calling for 7% growth this year. As of late-February, "Our prepayments are more than 14% ahead of last year," Schlossberg points out. "That is a good sign." Most of Pro-Lawn-Plus' growth has been organic (advertising and referrals). The company also made an acquisition in 2010, and continues to look for other small to mid-sized companies to acquire in the Maryland/D.C. area.
Nebraska contractor Larry Burklund has also been holding his own. “We’re planning to grow a little this year, but not a lot,” says Burklund, general manager of World of Green in Lincoln. "We’ve probably weathered this thing better than a lot of companies. But we’re still going to have some issues with fuel and fertilizer costs, just like everybody is.”
Down in Mississippi, Harry Collins of Landscape Services & Total Lawn Care has been fighting an uphill battle since his company posted record sales in 2007-8. Sales then dropped 20% in 2009 and remained flat the following year. Mild growth ensued in 2011. Collins is again calling for mild growth this year.
"Things might start growing a bit faster now," Collins optimistically predicts. "About 20 miles from our facility in Tupelo is a Toyota plant that just opened up in the fall. We had our best January ever, and February also proved to be very strong." The fact that Tupelo-area residents knew the Toyota plant would be opening did a lot to bolster consumer confidence over the past year, according to Collins.