Landscape Services Industry in the US

Part
01
of five
Part
01

Opportunities & Barriers to Entry in the US Landscaping Service Industry

Some key barriers to entry in the landscaping service industry in the US include the competitive market, labor shortages, legal issues surrounding the immigration of temporary workers. Some key opportunities to entry include quick adaptation to changes in demands, using position within other markets as a unique selling point, setting higher standard with customers in terms of deliverable and growth. Below is an overview of the findings.

KEY BARRIERS TO ENTRY IN THE LANDSCAPING SERVICE INDUSTRY IN THE US

  • In general, the barriers to enter the landscaping service industry in the US are low.
  • New companies wanting to enter the industry might face competitive markets of varying sizes (small, medium-sized, large) and varying geographies (local or regional).
  • Some customers opt not to outsource landscaping, which could have an effect on the industry by increasing the competition for existing and new companies.
  • Former employees of landscaping companies in the U.S. often establish their own companies and compete in the same market. Though they are unable to compete directly with their former companies for a short period, they still contribute to the market.
  • Former employees establishing their own businesses can lead to reduced market share and lowered financial positioning for other companies.
  • As it relates to the immigration of employees strict federal, state and local laws pose some difficulty for companies.
  • Other barriers to entry in the landscaping service industry in the U.S. that could be considered, based on barriers to growth rather than barriers to entry, include: labor shortages, immigration regulations for seasonal/ temporary workers, the high cost associated with the H-2B program, instability of income, and legal issues such as audits or raids.
  • Labor shortages are daunting and the legal processes for immigrant workers have frustrated employers.
  • Doing both office work and manual labor for landscaping due to customer demands and lack of staff can be burdensome.

KEY OPPORTUNITIES IN THE LANDSCAPING SERVICE INDUSTRY IN THE US

  • The opportunities that new companies entering the industry might want to consider are: market size with a few large competitors, providing better/higher quality service at a low cost, and building stronger bonds with existing customers or consumers in the industry. Based on the current market experience, these attributes will contribute to a successful business.
  • New companies could focus on adapting more quickly to demand changes than the current service providers (for example, by using new technology or software to conduct business).
  • They should also focus on utilizing better resources, promoting and selling services at a more advanced level than the existing service providers, and gaining access to more advantageous financial support.
  • Regional competitors have an edge over local competitors as they can use their position within other markets to their advantage.
  • There is the opportunity to target customers who are not outsourcing their landscaping.
  • Only a few existing companies can operate nationally and regionally.
  • The commercial market is predicted to grow at a CAGR of 3% until 2022, which may be attractive to new companies.
  • The largest service provider in the industry, Bright View, only has a 2.8% market share, which would be a great attraction for new companies looking to enter the industry.
  • Treating customers with the utmost respect and dignity could go a far way to avoid issues and stay ahead of competitors. This includes doing things such as honoring customer requests, not deviating from the agreed price and completing the job on time.
  • There are increasing opportunities due to the demands of residential and non-residential markets and the increase in housing and land properties.
  • There are even more opportunities in areas such as landscaping design & building services and lawn care & chemical application services. Nineteen percent of businesses see the former as their fastest-growing service, while 13% of businesses see the latter as their fastest growing service.

ADDITIONAL INFORMATION ABOUT THE US LANDSCAPING SERVICE INDUSTRY


Research Strategy:

We conducted research on the landscaping service industry in the U.S. with a specific interest in key barriers to entry, as well as opportunities. These two areas were looked at separately. To gather information about the United State’s landscaping service industry, we used a variety of trusted and reputable sources including landscaping industry reports, articles in association with landscaping in the U.S., market reports (such IBISWorld reports), and annual reports for landscaping businesses (which included information about the industry at large), among others. The findings were considered to be key to the industry because they were highlighted as issues within the industry for existing companies that have information specific to the industry (industry reports and annual reports).

We also checked other sources such as Ivey Publishing but were unable to find any additional information.

Part
02
of five
Part
02

US Landscape Service Industry Segmentation

Introduction

The U.S. landscaping services industry is segmented into the following: landscape and mowing maintenance, landscape design/construction, lawn care/chemical application, snow and ice management, irrigation installation/maintenance/service, trees and ornamental services, holiday lighting, and others. The 2018 market size for the U.S. landscaping services industry is $93 billion. The various segments of the U.S. landscape service industry with their market shares are as follows: landscape and mowing maintenance (46% or $42.78 billion), landscape design/construction (21% or $19.53 billion), lawn care/chemical application (11% or $10.23 billion), snow and ice management (7% or $6.51 billion), irrigation installation/maintenance/service (6% or $5.58 billion), trees and ornamental services (5% or $4.65 billion), holiday lighting (1% or $930 million) and others (5% or $4.65 billion).

Findings

market share (by 2017 gross revenue share)

Segmentation by number of companies and property type

By the number of companies offering particular services:
  • 83% offer landscape maintenance.
  • 85% offer lawn care and chemical application.
  • 73% offer landscape design/construction.
  • 63% offer trees and ornamental services.
  • 49% offer irrigation services.
By property types:
  • Single-family residential: 61%
  • commercial/industrial: 21%
  • Multi-family structures: 7%
  • government/institutional: 4%

other useful findings

  • The U.S. landscape services industry is highly fragmented; the top 50 companies generate only about 15% of the industry revenue.
  • Commercial landscaping services account for around 50% of the industry revenue in the U.S., while residential accounts for around 30%.
  • Across the industry, the segment contributing most to overall growth is landscape maintenance.
  • 33% of U.S. landscaping businesses reported landscape maintenance as their fastest growing service by revenue in 2017.
  • 19% reported landscape design/building services as their fastest growing service by revenue in 2017.
  • 13% reported lawn care and chemical application services as their fastest growing service by revenue in 2017.
  • 30% identified landscape maintenance as their most profitable service in 2017.
  • 25% identified design/building services as their most profitable service in 2017.
  • 15% identified lawn care and chemical application as their most profitable service in 2017.
Part
03
of five
Part
03

Landscaping Service Industry Trends

Detailed research reveals that some trends in the landscaping services industry in the United States include increasing focus on the enhancement of corporate campus environments, rising disposable income leading to increased demand in landscaping, growing opportunities through mergers as well as acquisitions, among other trends. The identified trends have impacted the landscaping industry positively in the recent past and will continue to have some impact on the industry beyond 2019 as discussed below.

1. FOCUS ON THE ENHANCEMENT OF CORPORATE CAMPUS ENVIRONMENTS

  • According to a 2018 Businesswire publication, increasing focus on the enhancement of a corporate campus environment across the United States will continue to drive an increase in demand for landscaping services until 2022.
  • The focus on the improvement of a corporate campus environment as a trend is discussed across a plethora of sources including a 2019 Honest Version web publication. The Honest Version web publication claims this trend will be around from 2019 to 2022.
  • Findings reveal that Brightview, the top lawn & landscape company in the United States in 2018 currently has its focus on the corporate campus environment. The company currently maintains over 400 campuses across the United States.

2. RISING DISPOSABLE INCOME AND INCREASED DEMAND FOR LANDSCAPING

  • According to Businesswire, an increasing disposable income among the residents of the United States is one factor currently driving demand for landscaping services. This factor is predicted to continue up to 2022.
  • The Honest Version web publication confirms that a hike in disposable income for residents of the United States will continue positively affect the demand for landscaping services up to 2022.
  • According to a 2019 Trading Economics web publication, disposable personal income has been steadily increasing for residents of the United States within a few years in the past. Disposable personal income in the United States increased to $15944.70 billion in February 2019 from $15913.40 billion in January.

3. GROWING OPPORTUNITIES THROUGH MERGERS AS WELL AS ACQUISITIONS

  • Mergers and acquisitions within the landscaping sector will continue to create opportunities for players in the industry up to 2022.
  • There have been several mergers within the landscaping industry in the recent past. Aspen Grove Landscape Group recently acquired James River Grounds Management and Integrated Landscape Management. All three companies appear on the 2017 top 100 landscaping companies for 2017.
  • BrightView, the number one landscaping company in America, acquired Girard Environmental Services in September 2017, bringing together the number 1 on the top 100 landscaping companies in the United States and number 39.
  • Monarch Landscape Companies acquired Terracare Associates for $62-million in 2017.
  • In 2019, the trend for mergers and acquisitions has continued to improve opportunities for players in the industry as BrightView Holdings, the number one commercial landscaping services provider in the United States has announced its acquisition of Emerald Landscape Company.

4. MORE OPPORTUNITIES THROUGH ORGANIC METHODS IN LANDSCAPING

  • The use of organic methods in landscaping will continue to provide opportunities in the sector up to 2022.
  • According to a 2019 Civil Eats publication, organic landscapes are on the rise in America. Edible landscapes are replacing lawns and companies that specialize in edible landscapes have more opportunities.
  • According to Ben Barkan, whose company offers "edible" landscaping services, there is a growing interest in edible landscaping across America and this is responsible for the business growth of his firm.

5. INCREASED LANDSCAPING DEMAND DUE TO AN INCREASE IN THE NUMBER OF AGED AMERICANS

  • According to a 2018 Lawn and Landscape web publication, an increase in the number of aging Americans will continue to drive growth in the landscaping industry up to 2050.
  • Statistics obtained from the Bureau of Labor Statistics reveal that more workers will continue to be needed to meet the increasing demand for lawn care as well as landscaping services for aging and busy homeowners. The market for maintenance personnel will rise from 1,309,300 workers in 2016 to about 1,455,600 workers by 2026, representing an increase of 11%.
  • As some older people opt to move to care homes, there will be more nursing home buildings springing up every year and more demand for landscaping services for new nursing homes.
  • More than 1.4 million people across the United States now receive long-term care from nursing homes. This figure is predicted to double by 2050.

6. RISE IN OUTSOURCING OF LANDSCAPING SERVICES TO THIRD-PARTY COMPANIES

  • According to Businesswire, the growth of the landscaping market will continue to be supported by factors like increased outsourcing of landscaping services to third-party companies.
  • Detailed research reveals that outsourcing has continued to increase opportunities for major players in the landscaping sector. Recently, Colonial Williamsburg outsourced its landscaping to BrightView. Brightview is the number one landscaping service provider in the United States based on 2018 revenue.

7. GROWTH IN THE NUMBER OF MULTIFAMILY STRUCTURES POSITIVELY IMPACTS LANDSCAPING SERVICES

  • According to Businesswire, an increase in the number of multi-family structures like apartment buildings will drive opportunities in the landscaping industry up to 2022.
  • This trend is repeated across a plethora of sources including the 2019 IBISWorld report. According to IBISWorld, the value of residential construction is predicted to rise in 2019. This rise in multi-family structures represents a potential opportunity for the landscaping industry.

METHODOLOGY

To gain insights into key trends in the landscaping services industry in the United States, we researched precompiled information from landscaping industry reports, media articles, and research journals among other publications. Our research team studied various publications containing reports on trends contributing to the growth of the industry. Unfortunately, most details of the trends unearthed were behind paywalls and minimal statistical information was made available from precompiled resources.

We searched for granular information on the identified trends listed by Businesswire, Honest Version, and Lawn & Landscape among other web publications. We verified the authenticity of these trends by researching statistics that support the prevalence of the trends. Detailed research confirmed that some of the top players within the landscaping industry focus on some identified trends to stay unbeaten in business.

Part
04
of five
Part
04

Landscaping Services Industry, Market Growth

The average growth (CAGR) of the landscaping services industry in the US over the past 5 years is 4.23%. The industry growth has been associated with increased outsourcing of landscape service providers to third parties, growth of private residential non-construction, enhancing the corporate campus environment, and rising disposable income in the US.

THE CAGR OF the landscaping services industry in the US IN THE PAST 5 YEARS

  • Statistics published by the IBIS World reveal that the landscape service industry in the US has experienced growth over the past five years (2014-2018).
  • Based on triangulated data, the estimated growth rate (CAGR) of the landscape service industry in the US in the past five years is 4.23%.

RESEARCH STRATEGY

In order to estimate the CAGR revenue growth rate of the landscape service industry in the US in the past five years, we used the 2018 report by IBIS World that we previously used in estimating the market size of the industry. The report provides statistics for the market size of the industry in the past five years as follows:
We used the market size data for the years 2014 and 2018 to calculate the CAGR rate for the past five years. Our calculation is as follows;

Formula for finding CAGR is:

((Ending Value / Beginning Value) ^ 1 / # of years) -1

In other words: Divide the ending value by the beginning value, raise the result to the power of ‘1 divided by the number of years’, and then subtract 1.

Beginning Value: The beginning value is our earliest-most market size.
Ending Value: The ending value is our latest-most market size.
Number of Years: The number of years is simply the number of years between the two market sizes.
Beginning Value (Market Size as at 2014) = $79.57 billion
Ending Value (Market Size as at 2018 if growth rate remains the same) = $97.64 billion
Number of Years = 5 Years
(($97.64 billion / $79.57 billion) ^ 1 / 5) -1
(2.13) ^ 1 / 5) -1
1.23 ^0.2-1
1.04227188341-1=0.04227188341
0.04227188341 x 100=16.33%
CAGR as at 2014= 4.23%
The average growth (CAGR) of the landscaping services industry in the US over the past 5 years is 4.23%.

Part
05
of five
Part
05

Landscaping Services Industry, Current US Market Size

The US market size for the Landscaping Services Industry is expected to grow by 1.9% from $93 billion in 2018 to $99 billion in 2019.
Sources
Sources

From Part 03
Quotes
  • "The United States (US) landscaping services market is expected to grow at a healthy rate over the forecast period (2018-2022). The growth of the market is supported by factors such as increased outsourcing of landscaping services to third party companies, focus on enhancement of corporate campus environment, increased spending on construction of private non residential entities and hike in disposable income in the US."
  • "Market Dynamics Growth Drivers Increased Outsourcing of Landscape Service Providers to Third Parties Focus on Enhancing of Corporate Campus Environment Growth of Private Residential Non Construction Rising Disposable Income in the US"
  • "Challenges Seasonal Nature of the Landscaping Industry Shortage of Quality Labor Highly Competitive Industry Fluctuating Fuel Prices"
  • "Trends Mergers and Acquisitions Use of Organic Methods in Landscaping Sole Sourcing expected to gain Prominence Technological Innovations Growing Number of Multifamily Properties"
Quotes
  • "Size of the Industry Statistics from the IBIS World November 2018 Landscaping Services Industry Report shows that the landscape services industry has annual revenues of $93 billion, employs more than 1 million people and represents 513,305 businesses. "
  • "The Bureau of Labor Statistics tracks industry employment and wages and employment in the following categories: Landscaping Services Supervisors of Landscaping, Lawn Service, and Groundskeeping Workers Landscaping Groundskeeping Workers Tree Trimmers Pruners"
Quotes
  • "With increased interest from both landscape companies and private equity firms, the M&A market is hot in the green industry. Valuation is high, the economy is strong and capital is available, making it a prime time both to buy and to sell. In the last 12 months, we’ve seen some big moves: • Aspen Grove Landscape Group (No. 6) acquired James River Grounds Management (No. 74) as well as Integrated Landscape Management, which was No. 99 on the 2017 Top 100 List."
  • "• BrightView acquired Girard Environmental Services in September, bringing together the No. 1-ranked Top 100 company and the 39th. • Also in the California market, Gothic Landscape (No. 5) acquired Terra Pacific. • Yellowstone Landscape (No. 8) acquired Heads Up Landscape, a $19-million company based in New Mexico, as well as North Carolina-based Ecoscape in 2017."
  • "• In the Northeast, TruGreen (No. 2) acquired Lawn Dawg and its 10 locations in September. The company also acquired Turfmasters. • SavATree (No. 15) acquired Swingle Lawn, Tree & Landscape Care (No. 99)."
  • "• Monarch Landscape Companies acquired $62-million Terracare Associates (No. 21). Earlier in 2017, the company, led by former ValleyCrest executive Brian Helgoe and backed by private equity firm One Rock Capital Partners, also acquired Hort Tech Landscape and Land Systems, both in California. Monarch/One Rock Capital did not report a combined revenue for all acquired companies for The Top 100 List."
  • "• Rotolo Consultants (No. 30) acquired Greenscape Grounds Management and Massengale Grounds Management."
Quotes
  • "BrightView Holdings, Inc. (NYSE: BV) (“BrightView”), the leading commercial landscaping services company in the United States, today announced the acquisition of Emerald Landscape Company, Inc. (“Emerald”), a preeminent commercial landscaping company located in California’s Bay Area. Terms of the transaction were not disclosed. Emerald specializes in commercial landscape maintenance, enhancement, tree care, turf management, and irrigation services, employing more than 200 highly skilled team members. It operates branches in the key Bay Area markets of Livermore, Hayward, Concord, San Jose, Manteca, and Tracy."
Quotes
  • "2018 Rank Company 2017 Rank 2017 Revenue Headquarters Employees 1 BrightView 1 $2,260,000,000 Plymouth Meeting, Pa. 22,000 2 TruGreen Cos. 2 $1,347,221,842 Memphis, Tenn. 13,674 3 The Davey Tree Expert Company 3 $916,000,000 Kent, Ohio 8,661 4 Bartlett Tree Experts 4 $271,000,000 Stamford, Conn. 1,730"
Quotes
  • "Lawns are ubiquitous in the United States and according to a 2015 NASA study, they take up three times as much space as the next largest irrigated crop, corn. "
  • "A growing group of people and businesses are trying to change that. For over a decade, “unlawning,” or the act of turning sterile lawns into fertile, edible landscapes, has been gaining popularity in the United States. These edible yards aren’t just backyard garden plots with a few squash and tomato plants, rather they are landscapes that incorporate edible native plants, like paw paw trees or bush cherries, along with fruit trees, pollinator habitats, medicinal herbs and water features."
  • "One well-known proponent of edible landscapes is Fritz Haeg, an artist who in 2005 began a years-long project called “Edible Estates,” during which time he traveled the country and turned ordinary yards into edible masterpieces. In the years since Haeg’s project, there has been a steady growth in awareness of edible landscapes in the U.S."
  • "“When we began, there was very little ecological literacy,” says Sarah Kelsen, an ecological engineer and co-owner of Land Beyond the Sea, an edible design firm founded in 2010 in Ithaca, New York. But now, she says of ecological awareness and her own business, “It feels like there’s been a completely exponential increase.” Ben Barkan, an edible landscaper who started HomeHarvest LLC 10 years ago in Boston, has also seen the difference. “Not a lot of people were used to the idea of replacing parts of their lawn or ornamental landscapes with edible landscapes,” Barkan says about the first years of his business. Now, he says, there is more interest and his business has grown a lot."
Quotes
  • "Landscaping The landscaping industry consists of about 93,000 companies in the United States combining for an annual revenue of about $50 billion and employing nearly 900k people. Residential landscaping services most often consist of mowing, clearing leaves, and chemical lawn care, while commercial landscape services also include mulching, flower-planting, pruning, and mowing. Margins are fairly low in this business because of very strong price competition."
  • "The landscaping business tends to be seasonal, particularly for residential providers. While commercial clients may pay monthly, demand from residential clients tend to be greatest during the spring and summer months, depending on the local climate. Sometimes landscapers do snow removal during the winter to alleviate this. Although simple services like mowing tend to be consistent no matter the economic state, clients may opt not to use premium services if the economy is poor."
Quotes
  • "The United States (US) landscaping services market is expected to grow at a healthy rate over the forecast period (2018-2022). The growth of the market is supported by factors such as increased outsourcing of landscaping services to third party companies, focus on enhancement of corporate campus environment, increased spending on construction of private non residential entities and hike in disposable income in the US."
Quotes
  • "This chart shows building permits issued for single-family homes across the US, and as you can see, the South has been the predominant area for growth for at least the past two years. More houses going up in the South is great news for the landscaping industry because clients and customers need yardwork year-round there. Competition will be tough, however. Lawn & Landscape reported that 38 percent of all landscaping service providers located in the US are in the South."
  • "According to one of Zillow’s 2017 press releases, “the nation's fastest-growing home values have moved from the typical California markets to Southern markets in Florida, Texas and Tennessee."
  • "To drive the point home, here’s another chart, which shows a somewhat steep rise in the number of privately owned housing units that were completed in the South. One thing to keep in mind is that the houses being built in the region could lead to added customers for landscaping companies for generations to come, not just a short-term boost."
  • "2. The increasing number of older Americans will add to demand for landscaping. Lawn & Landscape’s 2017 State of the Industry report showed that “an aging population of Baby Boomer customers has been a major reason for increased business this past year,” for a landscape company in Topeka, Kansas. According to the Bureau of Labor Statistics’ Occupational Outlook Handbook for Grounds Maintenance Workers, “more workers will be needed to keep up with increasing demand for lawn care and landscaping services from aging or busy homeowners.” Their projection is that overall employment for grounds maintenance workers will grow from 1,309,300 workers in 2016 to 1,455,600 workers in 2026, or by 11 percent."
  • "Of course, some older people will choose to move into nursing homes as the years go by, making their positive impact on the landscaping industry seem less significant. Nursing homes, however, need landscaping too, and there are plenty of them across the US, with more being built every year. According to the Centers for Medicare & Medicaid Services website, “over the past five years, 19 states have had an increase in the number of nursing homes.” SeniorAdvisor.com states that “over 1.4 million people in the United States currently receive long-term care in a nursing home… this number is expected to double by the year 2050.”"
Quotes
  • "Our McKinney, TX, team is looking for a full-time landscape architect with 0-2 years experience to join us in our new office just south of The Square in downtown McKinney. This entry-level position will support our growing landscape architecture practice in many exciting sectors, including corporate campus projects"
Quotes
  • "Education Landscaping Experts Bring clean, sustainable, and inviting entrances, walkways and outdoor learning environments to your campus to create a best-in-class learning experience. The campuses we've designed, developed and continue to maintain foster learning and positively impact the lives of students, faculty, and alumni at more than 400 schools and colleges across the country."
Quotes
  • "Disposable Personal Income in the United States increased to 15944.70 USD Billion in February from 15913.40 USD Billion in January of 2019. Disposable Personal Income in the United States averaged 5273.04 USD Billion from 1959 until 2019, reaching an all time high of 15948.29 USD Billion in December of 2018 and a record low of 351.54 USD Billion in January of 1959."