Impacts of COVID-19 on the Horticultural Industry

The COVID-19 pandemic has forced businesses to alter the way they operate. This includes, but may not be limited to, changing hours of operation, working with limited staff, and restricting customer access indoors. This could result in several challenges for businesses. In this study, we evaluate the impacts of COVID-19 on the horticultural industry and identify the challenges for businesses). Based on our research findings, the major challenges faced by businesses were not having enough employees and inventory to keep up with consumer demand during COVID-19. We also evaluate the effect of the pandemic on the sales of different plants, gardening products/services, and the overall revenues of businesses. For different types of plants included in the survey, landscape herbaceous flowers, landscape shrubs, and landscape trees showed the most significant increase in sales. In addition, for different gardening products/services, container plants, small plants, and soil & compost showed the most significant increase in sales. 64% of the businesses indicated higher overall sales compared to same season previous year. Over 46% of the businesses reported increased sales in 2020 under COVID-19. These findings imply a greater demand potential for plants and gardening products/services from consumers, in light of this pandemic.


Introduction
The COVID-19 pandemic is a health tragedy on a global scale. It has changed the world in numerous ways-quality of life, political, environmental, and economic sustainable development [1]. Businesses worldwide, as well as the United States economy, have been impacted. It is estimated that the United States real GDP suffered a year-on-year contraction of almost 11% in 2020 [2]. Gardening industry is an important part of United States economy. According to the 2019 USDA NASS Census of Horticultural Specialties, the value of all horticultural crops sold was over $13.7 billion [3]. Therefore, understanding the effect of this pandemic on the industry, for plants and gardening products/services, is important.
In this study, we evaluated the influence of COVID-19 on the gardening industry. COVID-19 has affected the agricultural industry in several ways. The pandemic has had an effect on the consumers, making it imperative for businesses to adapt to the new normal. As the pandemic forced people into isolation, they have been facing periods of stress [4]. Therefore, the potential benefits of being in contact with nature are gaining more importance [5]. In fact, extant literature suggests that leisure activities are being associated with tending to flowers and ornamental plants [4]. Moreover, gardening has been reported to be effective in alleviating the undesirable effects of isolation caused by the pandemic [6]. This might suggest a potentially higher demand for horticultural products. In addition, foreign countries' export of horticultural products saw a sharp decline in 2020 [7]. This might imply a lower supply of horticultural products in the U.S market.
The pandemic has also forced businesses to alter the way they operate. This includes, but may not be limited to, changing hours of operation, working with limited staff, and restricting customer access indoors. This could result in several challenges for businesses. We were able to shortlist the major challenges faced by businesses due to the pandemic.
We also evaluate the effect of the pandemic on the sales of different plants, gardening products/services, and the overall revenues of businesses. An important objective of this study is to investigate the extent of these impacts on different businesses based on their size (number of employees), business type (family or individual operation, incorporated), type of operation (retail, wholesale, etc.), and revenue.

Producer survey
We used the data from a Texas Nursery & Landscape Association (TNLA) survey conducted in September 2020. 67 TNLA members responded to the survey regarding the impact that the pandemic has had on the different components of their businesses, such as availability of employees, market access, and inventory management. The participants were asked to rate each issue on a scale of 1 to 5 (1=not challenging at all, 2=slightly challenging, 3=challenging but manageable, 4=definitely challenging, 5=very challenging). The relative index (RI) can be employed to compare the ranking of all the challenges faced by the businesses, based on their relative severity [8]. Relative index has been used in horticulture, engineering research, and project management (e.g., [9][10][11][12][13][14]). The following formula is used to calculate the relative index [15]: Here, I is the "importance" assigned by the survey respondents. In this study it refers to the severity of the challenge, on a scale of one to five (1=not challenging at all, 2=slightly challenging, 3=challenging but manageable, 4=definitely challenging, 5=very challenging), H is the value for highest severity and N is the total number of survey participants [9,15].
The survey participants were also asked about the changes in their business operations that they had to incorporate in light of the pandemic, such as changing hours of operation, working with limited staff, and restricting customer access indoors. We also asked the participants to choose the main factor affecting their sales (increase in sales, decrease in sales, and no effect) in 2020, from the following-COVID-19, weather, and general economy prior to COVID-19. Additionally, the survey also collected data on the size (number of employees), type of operation (landscaper, grower, retail, supplier, arborist, re-wholesaler), business type (partnership, individual or family, incorporated), and revenue for the businesses, in order to study the effect that the pandemic has had on different types of businesses. The plants included in the survey were-vegetables, fruits, florist type plants, landscape herbaceous flowers, landscape shrubs, and landscape trees. In addition, the gardening products/services included in the survey were-landscaping, seeds, small plants, container plants, bareroot plants, soil & compost, fertilizer & chemicals, and gardening accessories.

Econometric Model
We investigated the impact of COVID-19 on sales of horticultural businesses controlling for important factors such as business size (no. of employees), revenue, operation type (grower, retailer, landscaper, etc.), business type (partnership, family or individual, incorporated), and changes in business operations (open with modified procedures or with no access for customers). We employed an ordered logit model for our analysis as described in Equation 1 [16,17]: The dependent variable Y in our analysis is the change in sales for the businesses. Y ranged from -2 to 2 (-2=significantly decreased, -1=moderately decreased, 0=no change, 1=moderately increased, 2=significantly increased).

Producer sales
For all types of plants as well as gardening products and services included in our study, with the exception of bare root plants, the percentage of businesses reporting higher sales outweighed the percentage of businesses reporting decreased sales ( Figures  1 and 2). In the survey, over 46% of the businesses reported increased sales in 2020 under COVID-19. For different types of plants included in the survey, landscape herbaceous flowers, landscape shrubs, and landscape trees showed the most significant increase in sales. In addition, for different gardening products/services, container plants, small plants, and soil & compost showed the most significant increase in sales.

Effects of business size and total revenue
The summary statistics for the survey are described in Table 1. Different operation types included landscaper, grower, retail, supplier, arborist, and re-wholesaler. The main business types included incorporated under state law, partnerships, and family or individual operation. 58.21% of businesses were open as before COVID-19, while others reported modified operations. 64% of the businesses indicated higher overall sales (compared to same season previous year), while less than 24% of the businesses reported decreased sales. The estimates from our ordered logit model for change in businesses' sales are shown in Table 2. Based on the type of operation, the retail operations were associated with 16 times higher probability of increased sales, compared to the growers (base). The results were not statistically significant for other business types. In terms of change in daily operations, the difference was not statistically significant as businesses shift from "open -as before COVID" to "open -with modifications" or "open -with no customer access". We also found that the effects of number of employees and revenue on overall sales during the pandemic were not statistically significant. The estimates from our ordered logit model for change in sales of different plants and gardening products are shown in Table 3. An important result from our analysis was difference in change of sales of different plants and gardening products based on type of operation. Retail operations were associated with higher probability of increased sales for seeds, small plants, container plants, soil & compost, fertilizer & chemicals, gardening accessories, and florist type plants. Supplier operations were associated with higher probability of increased sales for small plants, container plants, vegetables, and fruits.  Table 4 shows the weighted average rating on a scale of 1 to 5 (1=not challenging at all, 2=slightly challenging, 3=challenging but manageable, 4=definitely challenging, 5=very challenging), as well as the relative index, for several issues faced by businesses due to the pandemic. Our findings indicated that the major challenges faced by the businesses were not having enough employees to keep up with demand during COVID-19, not having enough inventory to meet customer demand, and social distancing for employees.

Discussion
In general, businesses reported higher overall sales for all plants and gardening supplies during COVID-19, with the exception of bare root plants. 64% of the businesses indicated higher overall sales compared to same season previous year. Over 46% of the businesses reported increased sales in 2020 under COVID-19. These are interesting findings, which imply a greater demand potential for plants and gardening products/services from consumers, in light of this pandemic. It is very important for businesses to match this potential demand in order to move towards economic recovery in the aftermath of the pandemic.
The major challenges that all businesses faced were lack of enough employees to cover hours of operation, not enough inventory to keep up with the consumer demand, and social distancing for employees. Based on the type of operation, the retail type businesses were associated with 16 times higher probability of increased sales, compared to the growers (base). The results were not statistically significant for other business types. In terms of change in daily operations, the difference was not statistically significant as businesses shift from "open -as before COVID" to "open -with modifications" or "open -with no customer access". We also found that the effects of number of employees and revenue on overall sales during the pandemic were not statistically significant. This suggests that in general, the pandemic has affected diverse businesses in a similar manner. For different plants and gardening products, we were able to analyze the effect on change in sales due to modified operations, type of operations, business type, size, and revenue. We found that retailers and suppliers were associated with a higher probability of increased sales for several plants and products.
Awareness regarding the major challenges, and the impact of the pandemic on change in sales of businesses in general, as well as different products, would provide insight to governmental agencies while planning aid, relief programs, and assistance. The results from our producer surveys indicate that the pandemic has had a huge impact on the gardening industry. Results of this study provide important information for supply chain management, general operations, and marketing practices for businesses in the gardening industry; it is useful to guide the nursery owners and the green industry to drive towards the economic recovery from COVID-19.