• by Karlene Lukovitz  @KLmarketdaily, May 3, 2007

Sales in the total lawn and garden market--including equipment, supplies and services--were flat last year at $24 billion, and will grow by only 1 to 2% per year between 2007 and 2011, according to the just-released 2007 edition of "Lawn and Garden Products in the U.S." from the Packaged Facts division of MarketResearch.com.

But second-quarter results just released by The Scotts Miracle-Grow Co. paint a decidedly more positive picture. Scotts reported a 9% sales jump worldwide to $993 million for the period, including 8% growth in North America and 18% growth in the U.S. alone.

While Scotts' diversified portfolio includes lawn care services, the Smith & Hawken franchise and other properties, its core business is in lawn and garden care consumables--fertilizers, growth media and pesticides. But while Packaged Facts projects that this supplies segment, like the overall market, will grow at just 1 to 2% per year over the next five years, Scotts estimates that this category (which PF puts at $5.9 billion for '06) is growing at a 4% to 5% clip, and its own business is exceeding that performance, says Jim King, vice president/investor relations and corporate communications for the company.

King points out that gardening, in particular, has never been more popular--in fact, it is the No. 1 outdoor leisure activity, with more than 91 million Americans participating at some level in 2005 (up from 76 million in 2000), according to the National Gardening Association (NGA).

But while King describes the aging population as a plus--"The 45- to 64-year-old demographic is just phenomenal" in its interest in gardening, he says--PF's study points to a lot of Boomer interest in enjoying gardens and backyards, but a waning interest in working on them.

Indeed, PF reports that despite more people gardening, overall L&G sales, by NGA's own parameters, were flat to down between 2002 and 2005, with annual L&G spending per household plunging 17% (from $466 to $387 per year) during the period.

Boomers can afford to hire people to do their yard/garden maintenance (only 48% of all households do their own lawn care work), and aging bodies and sore backs are creating "gardening fatigue," points out PF.

But dueling demographics analysis aside, Scotts, which dwarfs all other companies in the L&G supplies sector (and is also a player in the equipment and services sectors) is far from oblivious to the need to germinate the next generations of product buyers.

The company expects to increase its U.S. advertising/consumer marketing budget in line with projected full-year sales growth of about 10% this year, and the lion's share of media spending will continue to go to television, says King. "TV has worked for us for a long time, and we're not about to abandon it; we're still believers in the medium," he says. (Scotts' U.S. ad spend totaled $78.2 million in '05 and $93.1 million last year, according to Nielsen Monitor-Plus.)

At the same time, Scotts knows that "the paradigm is shifting, in terms of who we are talking to and how," adds King--an audience of prospective buyers that is both younger and more diverse in terms of ethnic/racial makeup.

In fact, Scotts views its main challenge as maintaining consumers' levels of engagement with gardening and yards in the face of competition for discretionary time and dollars from the Net, wireless, on-demand movies and affordable travel, he says.

All of which is leading to investment in improving the company's use of the Internet (including launching microsites where consumers swap tips and photos of their yards/gardens)--as well as to forays into product placements.

For example, characters on "Desperate Housewives" and "King of Queens" could recently be seen using Scotts products, and Scotts has signed for placement in a movie scheduled for release this fall, King reveals.

Scotts is also a NASCAR sponsor, and its sponsored driver, Carl Edwards, is being featured as a spokesperson in Scotts' nationwide efforts, in conjunction with Keep America Beautiful, to educate consumers about proper use of its L&G products to minimize potential environmental impacts.

Scotts' current TV efforts also reflect "new paradigm" thinking. Whereas past commercials for its biggest product, Scotts Turfbuilder Plus 2, featured an agronomist attesting to the brand's superior weed-killing performance, this year's spots show families enjoying their backyards and talking about how the product makes the yard a nicer place.

"More and more of our messages focus on the yard as a personal, emotional place for the family," sums up King.