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ARS Home » Midwest Area » Wooster, Ohio » Application Technology Research » Research » Research Project #444772

Research Project: Modernizing the Floriculture Supply Chain: Facilitating Adoption of Cost-Effective Technologies to Create Resilient Crops in a Changing Climate

Location: Application Technology Research

Project Number: 5082-21000-001-079-S
Project Type: Non-Assistance Cooperative Agreement

Start Date: Sep 1, 2023
End Date: Aug 31, 2028

While the body of consumer research designed to inform marketing strategies in the green industry has been expanding in the past two decades, consumer attitudes, perceptions, and preferences continue to evolve. Thus, timely consumer research is one of the few mechanisms available to industry professionals who work in firms without the resources or ability to conduct their own consumer research. Much like production research, no one study can answer all questions. Thus, the following objectives are designed to substantially contribute to the current understanding of consumer behavior with regard to live plants, defined as both nursery (e.g. shrubs, trees, turfgrass) and floriculture crops (e.g. bedding plants, potted plants, herbaceous perennials, foliage): (1) To augment the existing body of consumer-related research through timely and diverse investigation of the gaps in information regarding attitudes, perceptions, preferences and live plant purchases. (2) To profile and quantify consumer segments (including current non-purchasers) to explore how purchasers differ from non-purchasers (e.g. demographic and attitudinal characteristics) and identify key barriers and concerns non-purchasers have about buying plants. (3) To explore the effectiveness of selected omnichannel merchandising strategies in the green industry supply chain by measuring transactional tendencies such as purchase channel and amount spent with regard to plant purchases and investigating the efficacy of diverse communication components (e.g. price, imagery, features/benefits) for their effects in stimulating purchases of live plants.

Based on feedback from industry participants who have been interviewed and/or visited in the past 12 months for research priorities, we will focus on several aspects of supply chain modernization. In all cases, the team will review both technical feasibility from a horticulture science perspective and operational feasibility. We will evaluate economic costs and benefits [costs of goods sold (COGS), operating costs (OpEx), and capital investment costs (CapEx)] and return on investment (ROI). Usually, the comparison is between a benchmark system and one or more alternatives. All systems under comparison must face the same conditions, the same fixed costs, and only vary in explicitly specified components. the technique of partial budgeting examines only the effect of the proposed practice change, assuming all other aspects of the floriculture value chain remain unchanged. This is done by considering the physical changes associated with the alternatives being proposed and then determining the effects of these changes on the financial position of the business using, in this case, total costs of production as a proxy. The overall impacts will be evaluated by measuring four separate effects including: (1) added costs of production incurred by the use of alternative materials, cultural practices, and/or postproduction treatments; (2) added income resulting from increased levels of production and/or price premiums associated with higher quality crops; (3) costs savings realized through more efficient management practices or reduced inputs; and (4) income that may be lost when substituting one crop for another in the production system. When the development phase of the proposed practices extends to two or more years, it will be important to take into account the effect of delayed returns by using a net present value analysis to fully take into account the longer-term nature of any investment in capital equipment that may be necessary to implement some of the proposed changes in production or postproduction practices.