A Look at Professional Lawn Care

Definition: Treatment, Not Maintenance
Professional lawn care services are here narrowly defined as services exclusively devoted to lawn care “treatment,” as opposed to “maintenance.” The difference is that treatment primarily involves use of lawn and garden supplies (applying fertilizers and pesticides), while maintenance primarily involves use of lawn and garden equipment (for mowing, blowing, trimming, etc.).

Prime Selling Points
The prime selling points professional lawn care services possess are that they have the knowledge and experience to diagnose problems and apply “lawn chemicals” properly, effectively, and safely; they have the proper equipment to do the job; and they provide the materials, thus eliminating the need for homeowners to store toxic chemicals on residential premises. Services also charge relatively low prices, which makes it easier for homeowners to justify using them.

Customized Options
Besides offering standard programs, a significant minority of lawn care firms also offer customized options or enhanced treatment services. The customized options mainly involve some form of structural lawn modification to promote growth, such as aeration, dethatching, resodding, or overseeding. Note, though, that two other customized options involve basic changes in the treatment process altogether. These two options are integrated pest management (IPM) and organic treatments.

Services at $3.9 Billion in 2002
Packaged Facts estimates that sales of professional lawn care services reached nearly $3.9 billion in 2002, a jump of 8 percent over 2001. While this is impressive – especially relative to other lawn and garden categories – services have actually exhibited a marked slowdown in growth rates compared with the late 1990s and 2000. During those years, services were skyrocketing up at double-digit rates. But then the recessionary year of 2001 came along and put a brake on this upward surge. It is estimated that growth suddenly slowed to just 7 percent in 2001, followed by a slightly better 2002.

Reasons for Slight Growth Slowdown
During the 1998-2000 period, the double-digit growth rates exhibited by services reflected three “explosive” factors: the housing boom, the booming economy, and the aging of the baby boom. All three came together to generate an optimum environment for services growth. The record number of homeowners created a vast pool of properties that service firms could tap; the exuberant economy rendered services easily affordable for many; and the aging baby boomers, many of whom were affluent but time-pressed, often chose to employ services as the easy way to maintain their lawns.

During 2001 and 2002, however, the economic prop was weakened as the economy moved into slow-growth mode. Nevertheless, the housing boom continued, and baby boomers continued to age. Thus, while money was tighter, there was still a demand for services. This is reflected in the lower but still impressive growth rates in services over the past two years.

Projections: Strong but Slower Growth
Packaged Facts foresees a slow-growth economy and rising costs for lawn care services combining to soften growth rates for services over the next five years, with the days of double-digit gains gone for awhile. Nevertheless, growth rates will continue to be positive, as demand based on a number of factors will remain strong. Based on this assessment, Packaged Facts projects that services will reach more than $5 billion by 2007.

Most Firms are Small Independents
The vast majority of service firms are small, metro-based, privately held independent operators. Estimates of their number range widely – from 1,000 up to 5,000. Sales for these small firms typically range from the high five figures well into the six figures. The most successful generate $1 million or more in sales.

TruGreen-Chemlawn Dominates
At the other end of the scale is TruGreen-Chemlawn, owned by ServiceMaster. In terms of sales and geographic scope, TGCL completely dwarfs the other industry players, with close to $1 billion in revenues and operations on a national scale. TruGreen-Chemlawn currently accounts for roughly one-fourth of all lawn care service sales.

Service Users Display Strong Upscale Profile.
Lawn care service users present an extremely strong upscale profile – meaning that all factors favoring use are uniformly skewed to the upper end of the consumer base. The parameters of this profile are simple: every single demographic factor influencing use indicates older, established, well-off homeowner status.

This article was provided by the U.S. Lawn and Garden Market, published by Packaged Facts, a division of MarketResearch.com.