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Publication #FE379

Market Expansion Strategies for Turfgrass Producers in the Western United States1

John J. Haydu, Alan W. Hodges, and Loretta N. Satterthwaite2

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Executive Summary

This paper reports the results of the third and last phase of a turfgrass marketing study in the United States. The previous two phases of this study were conducted in the Eastern and Central United States. This research project was a joint effort by International Turfgrass Producers Foundation (ITPF) and the University of Florida's Institute of Food and Agricultural Sciences. Each study consisted of two parts. In the first part, personal interviews were conducted with various sod-related businesses. The interview process identified critical factors influencing the demand for sod. This information was used to design, develop, and implement telephone surveys, the second part of the research. A total of 316 completed questionnaires were obtained from firms in 13 states, representing eight distinct Standard Industrial Classifications (SIC). Data were analyzed by:

  1. Geographic subregion—west-coastal and west-interior.

  2. Type of business—contractors and developers, landscape service firms, retail garden centers, and sports turf facilities.

Just as primary market outlets differed between the central and eastern regions of the country, the western region also varied considerably. The retail sector dominated the western region with 68 percent market share, followed distantly by landscape services (14 percent), contractors and developers (12 percent), and sports turf facilities (six percent). This contrasts sharply with the central and eastern regions, which had a less skewed market share distribution. Considerable differences in the quantities of sod purchased were also apparent between the west-coastal (W-C) and west-interior (W-I) subregions. For instance, very little (0.3 percent) sod was bought by contractors in the W-I, but considerably more (11 percent) was purchased by their counterparts in W-C. Similarly, home improvement chains such as Home Depot and Lowes were important outlets in W-I (46 percent), but much less so in W-C (22 percent). Landscape service firms had a 12 percent market share in W-I, but only two percent in W-C. Finally, market shares for sports turf facilities were negligible in subregions.

Use of grass varieties varied considerably between the two subregions, with bluegrass comprising over half (58 percent) of total purchases in W-I, whereas the bluegrass-fescue mix dominated (35 percent) in W-C. Ryegrass was important (21 percent) in the coastal subregion, but almost non-existent (2 percent) in the interior. Bermudagrass was slightly more important (18 percent) in W-I than it was in W-C (12 percent).

Comparing the use of sod versus seed, little difference surfaced by subregion, but noticeable disparities were observed by buyer category. More than any other group, contractors clearly preferred sod over seed, with over a 90 percent use rate. The retail sector and landscape services were roughly equal, with shares varying from roughly 50 percent in the interior to a high of 70 percent in the coastal areas. For the sports turf group, they preferred seed slightly more than sod with a 45 percent market share.

Compared to the studies conducted in the Eastern and Central United States, past activity and future business outlooks were less positive. Respondents were asked how their business volume had changed from the previous year (2000). Just under two-thirds (63 percent) claimed that business activity had grown, but this was down from 81 percent for the Central United States a year earlier. Nearly 20 percent claimed there had been no change in business activity, and another 20 percent indicated it had actually declined. With regard to the future outlook, roughly 40 percent felt it would improve in the coming year, 22 percent felt there would be no change, and 40 percent believed business activity would actually decline.

Results demonstrate that although there are common threads to both western geographic regions, pronounced differences were also apparent. Disparities became more prominent as the data were analyzed into smaller market segments. Results strongly suggest that producers interested in maximizing their marketing strategies must pay special attention to the differing needs and expectations of the target markets they are pursuing.

Keywords: western region, market demand, product characteristics, product supply, sod.

Acknowledgment: This research was sponsored by the International Turfgrass Producers Foundation, Rolling Meadows, IL.

Footnotes

1. This is EDIS document FE379, a publication of the Department of Food and Resource Economics, Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida, Gainesville, FL. Published March 2003. Please visit the EDIS website at http://edis.ifas.ufl.edu.

2. John J. Haydu, Professor, Mid-Florida Research and Education Center, Apopka, FL; Alan W. Hodges, Assistant-In, Department of Food and Resource Economics, University of Florida; and Loretta N. Satterthwaite, Senior Statistician, Mid-Florida Research and Education Center, Apopka, FL; Department of Food and Resource Economics, Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida, Gainesville, FL.

The Institute of Food and Agricultural Sciences (IFAS) is an Equal Opportunity Institution authorized to provide research, educational information and other services only to individuals and institutions that function with non-discrimination with respect to race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions or affiliations. For more information on obtaining other extension publications, contact your county Cooperative Extension service.

U.S. Department of Agriculture, Cooperative Extension Service, University of Florida, IFAS, Florida A. & M. University Cooperative Extension Program, and Boards of County Commissioners Cooperating. Larry Arrington, Dean.