Gardening has long been a favorite leisure activity of home-owning consumers in the 45 to 65 age group, boosting sales in the consumer market for pesticides and fertilizers. In 2009, total sales of branded consumer products have increased at an average annual rate of 2.0%, representing growth across all segments. The seemingly large consumer market for pesticides and fertilizers, with its own set of barriers to entry in comparison with the agricultural and professional markets, has attracted both basic manufacturers of pesticides such as Bayer and specialized formulator marketers such as Scotts. The basic manufacturers are looking for a stable, profitable revenue source and the specialized formulator marketers are consumer marketing pros with retail selling expertise. Often the marketing expertise trumps the manufacturing expertise and the basic producers wind up using the marketers as channels for active ingredient sales growth.
However, the tempting appearance of the market is actually rather deceptive. The market is well-populated by existing suppliers, and the leading marketers are formidable. The leading company in the consumer market for pesticides and fertilizers is Scotts, with sales of roughly 35.2% of the total. S.C. Johnson is the second-leading company. Both are leading edge marketers.
Product differentiation has become difficult as similar claims are made for competing actives, or competing product labels offer common actives. Product labeling has become crucial to sales success, enabling consumers to better understand what a particular product will do by reading the product name. Formulations have rarely been proprietary, but this situation is changing as competitors with new formulations are putting the consumer market on a faster track than it had been on historically.
One of the most difficult barriers for a new entrant is access to retail shelf space as mass-merchandise stores and home improvement centers continue to attract the majority of consumers and major marketer brands dominate the shelves.
However, demographic trends in the United States favor gardening-related products for the next 10 to 20 years as the “baby boomer” generation continues to pursue yard and garden leisure-time activities. Opportunities for growth in sales will be the greatest for marketers that either identify new consumer forms for existing products or commercialize new active ingredients in consumer markets, and then can leverage their way onto the shelves of major retailers.