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Table of Contents

Executive Summary

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TABLE OF CONTENTS

1 INTRODUCTION 5

2 SUMMARY 6

3 ECONOMIC ENVIRONMENT 9

3.1 INTEREST RATES 9

3.2 INFLATION 9

3.3 PUBLIC SPENDING, HOUSING AND UNEMPLOYMENT 10

3.4 FUTURE PROSPECTS 11

4 GARDEN PRODUCTS MARKET 12

5 GARDEN CHEMICALS MARKET 17

5.1 DEFINITIONS 17

5.2 GARDEN CHEMICALS MARKET 18

5.3 PRODUCT MIX 20

5.4 MARKET SEGMENTATION 21

6 GENERAL INFLUENCING FACTORS 36

7 SUPPLY 39

7.1 KEY SUPPLIERS 39

8 DISTRIBUTION 45

8.1 MARKET SHARE OF DISTRIBUTION CHANNELS 45

8.2 MARKET SHARE OF GARDEN CENTRES 47

8.3 DIY MULTIPLES 51

8.4 OTHER OUTLETS 56

9 KEY MARKET INFLUENCES 58

9.1 CONSTRUCTION MARKET 58

9.2 POPULATION PROFILE 59

9.3 PERSONAL DISPOSABLE INCOME 61

9.4 CONSUMER RETAIL EXPENDITURE 63

9.5 HOUSEHOLDS 64

10 FUTURE PROSPECTS 67

TABLES & CHARTS

CHART 1: GARDEN CHEMICALS MARKET 1987-1996 (£M RSP)

TABLE 2: GARDEN PRODUCTS MARKET 1986 - 1996 ( £M RSP )

CHART 3: THE TOTAL SALES OF GARDEN CHEMICALS - 1987-2000 (£M RSP)

CHART 4: ARKET SHARE OF GARDEN CHEMICALS BY VALUE IN 1996

TABLE 5 THE UK SALES OF FERTILIZERS 1990-2000 - £M RSP

CHART 6 MARKET SHARE OF FERTILIZERS BY VALUE IN 1996

TABLE 7: THE UK SALES OF LAWN CARE PRODUCTS 1990-20 00 £M RSP

TABLE 8 THE UK SALES OF CONTROL PRODUCTS 1990-2000 - £M RSP

CHART 9: THE MARKET SHARE OF CONTROL PRODUCTS - BY SECTOR IN 1996

TABLE 10: THE UK SALES OF GROWING MEDIA 1990-2000 - £M RSP

CHART 11: THE MARKET SHARE OF GROWING MEDIA BY VALUE IN 1996

CHART 12: MARKET SHARE OF COMPOST BY PRODUCT VALUE - 1996

TABLE 13: THE MARKET SHARE OF THE MAJOR SUPPLIERS - percent BY VALUE FOR 1996

TABLE 14: COMPARISON OF DISTRIBUTION CHANNEL SHARES FOR GARDEN PRODUCTS 1991-96 BY VALUE

TABLE 15: COMPARISON OF DISTRIBUTION CHANNEL SHARES FOR GARDEN CHEMICAL PRODUCTS IN 1995 BY VALUE

TABLE 16: GARDEN CENTRE MARKET SHARES - 1995

TABLE 17: THE MARKET SHARE OF THE MAJOR DIY MULTIPLES FOR GARDEN PRODUCTS - percent BY VALUE FOR 1995/6

TABLE 18: HOUSING COMPLETION'S - UK (000'S DWELLINGS) - 1990-1997

TABLE 19: PROPERTY TRANSACTIONS IN ENGLAND AND WALES (000'S)

TABLE 20: AGE DISTRIBUTION OF RESIDENT POPULATION

CHART 21: PDI & SAVINGS RATIO

CHART 22: CONSUMER EXPENDITURE ON DURABLE GOODS REVALUED AT 1990 PRICES (£ BILLION)

CHART 23: TOTAL CONSUMER EXPENDITURE - percent CHANGE ON A YEAR EARLIER

TABLE 24: STOCK OF DWELLINGS IN GB1983-1995

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EXECUTIVE SUMMARY

During the last few years the garden industry has been particularly affected by the difficult trading conditions of the early 1990's. However, some underlying growth has been maintained within the industry throughout this period, and the overall market size for garden products in 1996 was estimated to be around £2.5 billion.

The popularity of the Home Improvement market has accelerated consumer interest in the development of both the home and garden. For example, the rapid growth of conservatories over the past few years is a key factor linking the home with the garden.

The use and perception of the garden, however, has changed as householders increasingly regard the garden as an area of leisure and entertainment, rather than a hobby. The weather is another major influencing factor on performance within this industry. The exceptional summer of 1995 saw a significant increase in the sale of garden furniture and leisure equipment, while lawnmower sales, for example, declined. Equally, some factors of the garden chemical market are also heavily influenced by weather conditions at specific times of the year.

The market size of the domestic garden chemicals sector is estimated to be worth around £250m in 1996, enjoying underlying growth, which has almost been recession proof and can be attributed to the rising interest of gardening and an increasing awareness of the benefits of maintaining a garden with a relatively low level of effort for many householders.

Recent product developments are targeted at the needs of the consumers who are generally concerned with convenient and easy to use products which can produce immediate results effectively and efficiently. Brand loyalty is a major influencing factor for the garden chemicals market and purchasing behaviour may be altered if a brand does not reach the required expectations of the consumer. Generally, the level of brand loyalty is high in this sector of the garden products market.

In addition, many manufacturers have been looking at ways to extend the life span of a product and increase the depth of certain lines. Companies have introduced products for the various seasonal issues in order, for example, to encourage the consumer to be aware of the need to 'feed and weed' the garden throughout the year. Consumer education on product benefits, therefore, are a major promotional factor supporting chemical products.

The garden chemicals industry can be extremely volatile in nature, affected in general by current social and cultural pressures on environmental issues. Sales of specific garden chemical products have been affected by these factors and in some cases the products have been removed from sale totally. Although the market has in general been buoyant it disguises a fall in sales amongst some product ranges. For example, the performance of the growing media market has been disappointing, as well as other product areas such as lawn care.

However, fertilizers and control products have not only seen increasing diversification of product ranges but also a relatively strong rise in sales. Consumer expectations have also risen over the last few years and a product must provide immediate results for a consumer to remain loyal to the brand. The environmental concerns over the usage of peat reduced the sales of this product for a number of years, however, with the disappointing results of some of the peat substitute products, gardeners are converting back in some cases.

The main distribution channels within the garden chemicals market are Garden Centres with a market share of approximately 35 percent, with DIY Multiples also accounting for over 30 percent. While both sectors offer convenient parking for bulky items, Garden Centres generally offer better advice which is important in this sector of the market.

Own branded products within DIY stores has risen to approximately 20 percent, although the primary aim of some retailers is not to offer a less expensive solution but create more of an image of authority to their own-label products. e.g. Homebase.

Major suppliers in the sector include Levington, William Sinclair, Miracle, Phostrogen etc, all enjoying wide distribution and strong brand loyalty to well-established product ranges.

This comprehensive report represents a detailed assessment of the market, reviewing major trends, key factors influencing developments and future prospects for the sector. Analysis is both quantitative and qualitative, based on our substantial experience of the building and home improvement markets.

Text © 1997 AMA Research

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