The Top 3 Challenges Facing Greenhouse Growers in 2024 and Ways to Get Ahead

According to many reports from business analysts and industry groups, market disruptions and uncertainty are expected to continue. We’ve talked with many growers and identified the top 3 problems facing greenhouse growers in 2024:

• Scalability
• Market volatility
• Labor and supply chain challenges

Read on to learn more about the top 3 challenges and how Velosio can help you leverage Microsoft Business Central and SilverLeaf to address today’s industry challenges and manage your business more efficiently.

Challenge #1 – Market Uncertainty

Market uncertainty continues to be a challenge across many industries. Higher prices and supply chain shortages make it difficult for growers to strategically plan order fulfillment and coordinate shipping logistics. A prime example is the fertilizer crisis that has been steadily growing since 2021—when a 66% price increase occurred thanks to shortages. The high cost is likely to persist throughout 2024.

Globally, according to a study by JP Morgan for 2023, the economy is projected to expand but at a slow pace (1.6%). Financial conditions are tightening, winter is expected to aggravate China’s Covid policy, and Europe continues to struggle with natural gas problems.

However, for the horticulture industry, the long-term outlook is more positive. According to GME, the global horticulture market is projected to double by 2026 compared to 2021, and in the US, Business Wire estimates the greenhouse market will grow more than 30% by 2027 compared to 2022.

Challenge #2 – Labor and Supply Chain Shortages

According to Hortica, the labor and supply chain issues experienced over the past year will likely continue. And as Covid has shifted the job market, the impact has been felt by greenhouses and nurseries.

Specific to the horticulture market, freight costs, which skyrocketed in previous years, thankfully seem to be normalizing. This relief, however, is now being met by rising utilities. One grower indicated that their normal monthly spend was $100-$115K/month, and recently rose to over $400K. Additionally, for some, access to key materials like bark and peat is changing. “Just in time” manufacturing for this segment is not an option. Most must buy in bulk – many times a year’s worth of ceramics, hard goods, and grow materials – to successfully manage cash flow.

Adding to the challenge is that a vast majority are family-run businesses, and as family members choose different career paths, it can be a true challenge to recruit new talent, as these positions are normally in-person.

Challenge #3 – Scalability

It’s difficult to plan strategically when working with disconnected systems that aren’t able to update users in real time. This impacts production management, and inventory can go to waste when you don’t know what you have. Both issues affect the bottom line and your ability to expand your business.

The ability to scale operations is made more challenging as unplanned events occur that impact the supply chain, such as COVID-19. Even without unplanned events, the horticultural industry faces seasonal swings that influence customer demand. If increases in product demand occur at the same time as decreases in available labor, growers need to find new ways to get plants to their retail customers.

How Technology Can Help

None of us has direct control over market volatility, labor shortages, and supply chain issues. But technology can help you adapt as conditions change—by giving you access to data insights and helping you streamline processes to run more efficiently. This in turn enables your internal team to collaborate more effectively, and that translates into better experiences for your customers and your suppliers.

Smart technology also allows you to automate machines (such as liner-cutting planters), use robotics (spacing robots), and artificial intelligence. You can also expand your e-commerce operations, where it’s easier to reach a larger audience, provide more product details, lower operational costs, and accelerate the sales process with no-touch orders that go directly to your shipping department.

Interested in learning more? Check out our playlist on YouTube

An ERP Solution Built Specifically for Growers

Many growers have leveraged the capabilities of modern technologies by deploying SilverLeaf for Horticulture, which runs on Microsoft Dynamics 365 Business Central. SilverLeaf offers advanced ERP processes that reduce manual labor and cumbersome duplicate entry processes that lead to costly errors. By adopting greenhouse management software built specifically for growing businesses, growers and plant processers can scale their operations through automation and real-time smart reporting.

SilverLeaf captures and stores information to help organize and prioritize workflows, drive efficiencies, and reduce manual processes:

• Generate cost and margin insights to set pricing.
• Check inventory availability to know what you have too much of and which products are short.
• Analyze cash flow to prioritize bill payments.
• Visibility to shipping and invoicing to drive invoice timeliness and impact DSO
• Diversify your supply chain options.

With Silverleaf, you can do more with less and drive efficiencies by streamlining order entry and integrating with commonly used productivity tools like Microsoft Office (Excel and Teams). It’s also easier to train employees, which makes it easier to retain your staff compared to training them on disparate systems or tribal knowledge.

Now more than ever, it’s crucial for greenhouse growers and processors to turn to solutions that were built for them and address their business needs now, but also into the future.

For information on how your grower business can benefit from SilverLeaf for Horticulture, contact Velosio today.

Frequently Asked Questions

Can technology improve scalability for my horticulture business during seasonal swings?

Yes, technology like SilverLeaf and Dynamics 365 Business Central provides scalable solutions to manage seasonal demand fluctuations effectively. By automating production and utilizing AI for demand forecasting, SilverLeaf ensures that you can scale operations up or down quickly, optimizing resources and meeting customer demands efficiently.

How does Dynamics 365 Business Central help greenhouse growers manage market volatility?

Microsoft Business Central, integrated with SilverLeaf for Horticulture, equips growers to handle market fluctuations by providing advanced analytics and real-time data. This allows for agile decision-making, helping you anticipate market trends and adjust your strategies accordingly, ensuring your business remains resilient despite economic uncertainties.

What solutions does SilverLeaf offer to address labor shortages in the horticulture industry?

SilverLeaf helps mitigate labor challenges by automating key processes, from inventory management to order processing. This reduces the need for manual labor and enhances productivity, allowing your existing workforce to accomplish more with less and focus on critical tasks that require human intervention.