The “B” word might be on everyone’s lips at the moment and talk of the ebb and flow of business optimism is constant but, perhaps surprisingly, consumer confidence remains high. Brexit does not seem to have dented consumer spending and this is apparent not just in the high street stores but also in the garden product sector.
A recent survey conducted by Opinium Research on behalf of home improvement marketplace, Plentific, showed that 20% of the homeowners surveyed planned to spend more on their gardens this year than in 2016.
For London homeowners surveyed, that figure rises to 25%.
This is borne out by manufacturers in the sector who all report good demand for their products.
“Our business has always been far more influenced by the weather than by economic factors,” said John Gomersall, sales director at Forest Garden Group. “In fact, we have previously seen during the recession that people do tend to invest in their gardens rather than spend big on holidays or moving home.”
“I don’t think people will ever stop spending money on their gardens,” said David Twigg, director at Severn Valley Woodworks, whose garden products are marketed under the Hutton brand.
“Home ownership is aspirational for some people and actual for others – it’s the biggest investment of money in your life and if your garden isn’t good and well maintained it can have a dramatic impact on the value of that property.
“Gardens are a past-time, a reason to be outside and a way of differentiating your property from the neighbours’. I don’t see that changing one bit.”
“People do know that if they invest in their houses and gardens it is adding value that is above what they are putting in,” agreed Michael Stubbs, managing director of NFP Europe. “We’re also seeing that people are spending their money on quality products rather then just ‘doing something up’ and they are prepared to look at longevity and whole life costs rather than finding the lowest price for everything.”
Grange Fencing added that there are more pragmatic reasons why the market will remain strong.
“We believe that consumers will still invest in their gardens as gardening tends to be one of the last areas people decide to reduce spending on,” said Neil Taylor, managing director. “This is especially true when it comes to boundary fencing, which is an essential requirement in the UK consumer’s garden.”
Latvian manufacturer Byko Lat (Fencing and Garden products) processes Latvian and Russian timber, increasingly sourced from its own mills within the Norvik group, of which it is part. The company maintains that the impact of Brexit on garden spend remains to be seen but Nick Apperley from the UK office said that initial indications are that “buyers are keen to continue with business as usual”. At Zest 4 Leisure, part of the P&A Group, 2017 started well and has shown no sign of Brexit woes.
“Currently we are up almost 50% on pre-season orders,” said Alwyn Williams, sales manager. “We’re delighted with the way the market is shaping up.”
One Brexit impact that has already been felt is that costs and prices are somewhat higher for those companies whose manufacturing is based outside of the UK or who are importing timber and components.
“This is certainly an important and ongoing factor,” said Nick Apperley. “However, it’s the same for all imported goods and we anticipate our position in the market to remain and develop as planned.” Indeed, currency fluctuations aren’t new to manufacturers, as Neil Taylor pointed out.
“Grange has been sourcing components from Europe for UK manufactured products for several years,” he said. “This means that the exchange rate position has always affected the company, regardless of where it is being manufactured.
“This always presents a challenge, however, we have remained consistent through the years in administering price increases that cover key costs but also keep in mind the position of our customers.” Zest 4 Leisure has also had to pass on Brexit-induced price increases and reported that implementing the living wage and extra labour costs has had an additional impact. It’s not all about price increases, however.
For example, Hutton imports kiln-dried joinery grade redwood for its products but, like some others, has bought strategically for the year ahead and has “the wood in the system at the right price”.
Hutton has also made significant savings on production and distribution costs over the last couple of years. A new Weinig moulding line and a 10,000ft2 warehouse have enabled the company to manufacture products in greater volumes, store it appropriately and cut lead times. Photovoltaic solar panels installed on the roofs of many of its buildings have reduced energy costs. These efficiencies have resulted in Hutton being able to reduce some prices and to hold others at 2016 levels.
While Forest Garden does import some finished goods and raw materials, the majority of its timber is grown in Britain and supplied through its integrated sawmill operations. This does afford the benefits of continuity of supply and competitive advantage. However, said, Mr Gomersall, “there is a risk that as imported product costs rise it squeezes prices up on UK timber”.
As mentioned, demand has been good across the sector. Fencing hasn’t hit the dizzying heights of previous years when storms flattened fences across the UK but it is expected to pick up with the spring season.
And when it does, decorative fencing is likely to make a showing, having become more important to manufacturers in recent years. Garden buildings are also proving popular.
“Demand remains strong for all sheds and garden buildings and we have seen particular growth within the builders merchants’ channel, with more customers either stocking products or ordering for their own customers,” said Mr Gomersall.
“Log cabin sales continue to grow, especially across online channels, and we have a new Oakley range of summerhouses, which we expect to sell really well.”
Hutton introduced a four-strong shed range to its portfolio a couple of years ago and has seen year-on-year growth of around 30%.
“Sheds have been a real success story,” said Mr Twigg. “We could undoubtedly sell more but service levels are critical in that area. In the season a shed manufacturer may quote four to six weeks to make your shed whereas ours are sold from stock. Availability of product has been key to the success and growth of our shed business.”
Zest 4 Leisure reports “great success’ with its decorative range of garden structures, such as arbours and arches. Furniture has also boosted the company’s sales, said Mr Williams.
“I think that’s because we’ve paid attention and listened to what the market wants,” he said. “We haven’t had as much luck with pavilions but we haven’t got a range as yet that allows people the choice. Over the next year or two we’ll be working on enhancing our range of pavilions and gazebos.”
NFP Europe is a licensed Accoya distributor in the Baltic states and works with manufacturers in that region producing “very high ticket priced” cabins and summerhouses, some of which are imported into the UK.
“Some of these summerhouses cost £40,000-50,000 but products in that price range haven’t been hit by the recession or by Brexit,” said Mr Stubbs. “People who have got the money to spend £10-30m on a house think nothing of spending more than £50,000 on garden rooms.”
There is still demand for products that cater for the ‘grow-your-own’ market, although this is thought to have peaked and is not to previous levels. Planters, on the other hand, are still selling well.
“These products remain good sellers for us and we have seen growth both through traditional outlets such as garden centres, and within online channels,” said Mr Gomersall at Forest.
“Planters are a growing side for us and it’s something we’ll be working on to bring more into the market over the next few years,” said Mr Williams at Zest 4 Leisure.
“I think the mass market for grow your own products has come and gone,” agreed Hutton’s David Twigg. “However, planters for flowers and shrubs are still a strong market because they’re relatively low cost items to buy when people want a change.”
Sleepers continue to figure in garden purchases, either for landscaping projects or for creating raised beds. Hoppings has introduced Use Class 4 treated 4×8 sleepers available in three colour stains – pebble grey, autumn brown and black peat – under its Q-Shades brand (see page 34-35 decking feature).
As with every spring season there is a plethora of new products available. Some of these were showcased at Glee last September.
Glee continues to divide opinion among manufacturers with some opting not to exhibit for the first time in decades.
Glee stalwart Grange Fencing said the show “delivered well” and resulted in some interesting leads but it won’t be exhibiting this year. Instead it will focus on achieving growth within its existing customer base by introducing stronger ranges into the market.
Byko Lat maintained its presence and Nick Apperley said that while visitor numbers weren’t as high as had been hoped, the company’s products generated plenty of interest.
Zest 4 Leisure said the show is the best opportunity it has to showcase its new products and to speak to new and existing customers.
It paid extra dividends last year as the company won a Garden Industry Manufacturer’s Association product of the year award for its Bahama round table and stool set.
The 2016 show was the first time its online manager Simon Davison was in attendance, enabling the company to highlight its home delivery offer (which it is rebranding as Zest 4 Leisure Direct) and garner interest from online retailers.
Hutton’s experience was also positive. “It was, without doubt, the best Glee we’ve every had,” said Mr Twigg. “And I’m measuring that not just in terms of the warm feeling we got from visitors to the stand but in cold, hard orders.
“Within two weeks of the show ending and us being back at our desks we had generated substantially more business as a result of Glee than we had ever done before.”
Meanwhile, Forest Garden stayed away but invited customers to its own extensive showroom.
“It has worked really well for us with over 50 key customer visits undertaken during the year,” said Mr Gomersall. “We have now refurbished the space with new and exciting products and display concepts ready for the 2017 season.”
Forest’s new launches cover several of its product categories, including innovative storage solutions, such as a boot store, and a new Whitby Arch and Arbour range.
“We are also investing more in marketing and PR activity this year to showcase our new products and existing ranges to drive sales through our customers,” said Mr Gomersall. “And, watch this space for an exciting development in high performance fencing.”
Hutton’s new products include a Dean circular dining set, a Dorset bird house range, a triangular log store and square planters to complement the existing hexagonal and rectangular versions.
Existing products are often “tweaked” to improve their performance or simply to freshen them up to catch the attention of buyers who may already have a Hutton product but who could be tempted by the next incarnation.
Zest has added a Norfolk Arbour to the range, along with a picnic table, dining sets and some planters and has garden timber mirrors, gazebos and barbecue shelters in the pipeline for 2017. It is also looking to introduce a range of painted, dipped products.
The company is also in the process of developing ranges specifically for its Zest Online customers. This will include further products in the Zest 4 Pets range and accessories such as bench pads and covers.
Grange has 16 new products for 2017 and is focusing on product differentiation. “We have improved the design and added products to the Ultimate range (two new fence panel sizes and a gate),” said Mr Taylor. “We have also introduced decorative fence panels such as the Elite Lille and Contemporary Vogue.
“Our lap panel design will also be unique from this year,” he added. “Using the cutting edge technology now available to us in Poland [see box] we have been able to improve its construction.”
Along with expanding product portfolios, companies are also looking to improve and increase their manufacturing facilities.
Forest said there will be “exciting news” on manufacturing very soon, while Zest said it had outgrown its premises and was looking for a bigger site that would allow it to grow and increase production capacity.
Meanwhile NFP Europe, which among other things, distributes Megawood’s wood plastic composite (WPC) decking in the UK, said the German company is launching a WPC fence system called Limes. This has a 25-year in ground warranty and its many features include sound attenuation values, which, said Mr Stubbs, “set it apart from more standard fence panels”.
