Price Environment  - Key Takeaways

Prices for landscape maintenance services have been rising, primarily due to volatile demand and purchase costs.  Rising labor and material costs (especially fertilizers) are contributing factors. Also homeowners have been investing more in home improvements, including landscaping services, thus pressuring service prices upwards (as resources were taken away from the commercial sector during the pandemic)

The average price of landscape maintenance services is forecast to continue increasing.  Strong demand combined with rising fuel costs will be the primary drivers of service price growth

Low specialization means the cost to enter the market is inexpensive and setup is relatively easy.  Low service specialization benefits buyers because it widens the supplier base and generates greater competition, which leads to more favorable service prices. The disadvantage is around offering safe work practices or the ability to administratively manage the safety account requirements. Additionally, some startup firms will fall short in their knowledge base, offering horticulturally sound practices

The lack of alternative services limits buyers’ leverage in negotiating lower service prices with vendors

The prices of suppliers’ primary inputs, which include fertilizer materials and gasoline, have been highly volatile.  Although external demand drivers have displayed moderate volatility on average, it has not been enough to offset these high input costs. The invasion of Ukraine by Russia is continuing to strain the production and export of fertilizer from Russia, a leading global source of all major fertilizers

On average, switching costs are moderate and although there are incentives to stick with one contractor, most buyers can terminate most contracts early without a financial penalty. Pay particular attention ensuring there is "True-Up" Language in the contract. Services performed don't always match equal payment installments

There are no hidden costs associated with procuring landscape maintenance services.  Most of the costs associated with providing the service (e.g., permit and inspection fees and contingency costs) are already factored into the price

GLS-011 - Ver 1.0 (Aug 23)

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Smart Irrigation Technology Conversion 

 30% - 40% of Landscape Water Bills

  • Implementation of tech to save on labour and utilities

Example:

  • Advances in Irrigation technology can help reduce water use, from drip irrigation to “Smart” controllers or components. Accounts can improve water used for irrigating landscapes and reduce operating costs, all while enhancing plant health and curb appeal. An existing irrigation system can be optimized through retrofits to the control mechanism or other components. Consider replacing existing clock-timer controllers with more advanced control systems that water plants only when needed
  • Dedicated irrigation meters can track irrigation water use and allow for documentation of actual savings. Install and monitoring a dedicated meter or submeter for your irrigation system, as this is by far the most effective way of determining outdoor water use
  • “Smart” irrigation controllers use local weather and landscape conditions to determine when and how much to water. Soil moisture-based control technologies can be inserted into the soil to measure moisture, regulating irrigation so that it only occurs when soil moisture falls below a set threshold

Natural / Water Efficient Landscape Practices          20% - 50% of Outdoor Water Use

  • Installing and maintaining natural landscaping instead of a conventional lawn

Example:

  • Consider reduction of regularly mowed areas, with conversion to meadows/Xeriscapes. Use turfgrass where it serves a practical purpose (e.g., play space for children and pets) and consider other plantings for areas that receive little to no foot traffic or use
  • Outdoor water efficiency starts with the landscape itself. The soil, slopes, plantings, plant selection and placement of foliage can make the difference between a water-smart landscape and irrigation inefficiency
  • Consult with suppliers who can provide consultation around property conversions to reduce cost while maintaining an aesthetically pleasing exterior.

Reduction / Elimination of Reoccurring Operations 10% - 14% Reduction of Annual Maintenance

  • Alternative approaches to traditional services

Example:

  • Conversion away from annual flowers to Perennial plantings
  • Departure from annual mulch applications by converting to stone.
  • Reduce labor costs around excessive turf and shrub growth with PGR’s (Plant Growth Regulators)
  • Consult with suppliers who can provide consultation around operational conversions to reduce cost while maintaining an aesthetically pleasing exterior

Grounds, Landscaping & Snow

Savings Levers - Landscaping

Suppliers / Pricing

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Savings Levers

Sources: Landscaping Services - Beroe Landscaping Services 2021, Procurement IQ Procurement Research - 48646332 Landscape Maintenance, https://cleantechnica.com/2021/06/19/the-fully-electric-future-of-landscape-maintenance/

Go-Electric 

5% - 8% Reduction of Annual Maintenance

  • Switch from gas powered machinery to battery powered

Example:

  • Overall reduction of Carbon Footprint: Gas and harmful emissions are eradicated, and noise pollution is reduced
  • A cleaner environment, with a reduction of machinery maintenance (gas / oil / replacement parts). Cheaper to charge the batteries with electricity
  • Significant advancements made in handheld commercial 2 cycle equipment conversions to electric, over larger mowing technology