Texas holesale Market hristmas r225 AfTEXAS A&M UNIVERSITY TEXAS AGRICULTURAL EXPERIMENT STATION R. E. Patterson, Director, College Station, Texas w‘: Summaily Wholesale Christmas tree markets for Dallas,“ Houston and San Antonio were investigated during the 1962 Holiday Season to determine potential outlets for locally grown trees. The investigation was limited to species which could be grown in at least a part of the state, but it did not include those that cannot be grown in Texas such as Douglas fir, Scotch pine or balsam fir. Personal interviews were conducted with buyers in these three cities and a questionnaire was sent to service clubs in these three metropolitan areas and to Fort Worth. The study was performed at the request of the Texas Forest Service to provide information about the feasiblity and direction of Christmas tree man- agement research. Findings A market exists in the wholesale trade in the three surveyed cities for Christmas trees that can be grown in Texas. Principal interest was expressed in shortleaf pine followed by redcedar and slash pine. Cultural practices, including pruning tech- niques, will need to be developed to improve the Christmas tree quality of these species before they can compete with the two principal imported trees, Douglas fir and Scotch pine. Most wholesale produce buyers in these cities indicated they would be willing to purchase a small quantity of these locally grown trees to test their marketability. If tree quality could be improved and maintained, these buyers estimated that local i Season to take orders for the following Christm i trees might capture as much as one-half of » more than 2 million Texas evergreen tree mark Almost half of the Christmas trees ordered -. wholesalers were 5 to 6 feet in height, with tho 7 to 8 feet accounting for one-fourth, and th’ trees 5 to 4 feet in height accounting for 15 perce of the orders. The remainder or about one-ten, of the orders were represented in such sizes as l to 3 feet, 8 to 11 feet and 11 feet and over. Buye indicated they wanted to receive their first tre about 25 days before Christmas and their last slii-i ment about 20 days before Christmas. Orders we i placed as early as january or February for tree sali the following Christmas, but some buyers preferr to wait until mid-summer. The usual terms 0 trade among wholesalers were direct purchases an f.o.b. delivered. Service clubs reported that dir purchases, delivered consignment and charge ac counts were the most important terms of trade. Most of the wholesale buyers indicated thai representatives of tree growers or distributors car ried out very aggressive sales programs. Sales pe‘ ple would contact buyers shortly after the Holida and would offer a wide variety of trade terms Q ~ satisfy the desires of the buyer. a The principal retail outlets were chain foo stores, service clubs, supermarkets and other reta' grocery stores. Wholesalers reported selling tre to an average of 8O different retail outlets. Th tree markup by wholesalers was about 2O to 25 per cent and they estimated the retail markup to be 1O percent or more with higher quality trees. Interestingly enough the demand for artificia trees varied for the three market cities in the study The Dallas area appeared to have reached its pe 4 for artificial trees, and in some instances buyers ha reduced orders. However, in Houston and San An tonio sales of these items were still increasing Most buyers reported that the introduction of artifi cial trees had little influence on evergreen tre orders, and most of them had increased their busi} ness in recent years. I Potential markets for materials for Christm decorations were also investigated with wholesal buyers. These items included pine cones, mistletoe‘ tree boughs or limbs, holly, sweetgum balls other items. Some interest was expressed f0 mistletoe, holly, pine cones and evergreen tree limb I However, buyers emphasized that they needed a have an adequate, dependable supply of these ite p in packaged form for convenient handling, and th materials had to be fresh. » a Recommendatianr Because buyers surveyed by this study indi- cated some interest in buying locally grown Christ- mas trees, the Texas Forest Service has established test plantings of redcedar and shortleaf pine to p, develop acceptable cultural techniques. In addi- prion they will explore the possiblity of test plant- §ings of an exotic species which may hold promise 3 as a market substitute for Scotch pine. Despite . jmore rapid growing conditions than in more north- iiern climates, results will not be available for j several years. , It is recommended that the species tested be fdeveloped in a range of sizes, shapes and colors and ithat these be market tested to determine buyer ‘ Eand customer preference. Also, it is suggested that future information pertaining to locally grown trees contain recommendations on marketing. This will i, {likely require a review of the then prevailing mar- _ ..lrets. Prospective Christmas tree growers should be urged to consider carefully market requirements '- before entering the business. ‘x .\ _' 1 4- =-' ’ '1 S ._ . “ks ./,1.""\\\\\ / . '1 '1 » \ m alt/d‘ ,1. ~ \ < n“, , flf/‘i/ . ~/ K ./' //’r/ / ’ I i’ ' Aft/V’; '1 Q * V _,'- __ 24/] / f // ,/';l/,//’ ' 719/ '- ’_, ~ ‘_ _\\5< __ . -; ;~- r71]? ‘\\,, ._ - q‘ ":“\‘\\\ ’ /""‘ \\\..:»!./; . ‘ Y‘. \\ . / 1n 3‘ QA, _ -_\ _ _-_._. \; -\‘_ r 41/ 4, /’;\\ I // / , . ’ 1:“ - 1 a».- / ff’ ' /" '4,’ , ' ,"/ Contents Summary .......................................................................... __ 2 Findings .................................................... ____________ __ 2 Recommendations ___________________________________________________ __ 3 Introduction .................................................................... ,_ 5 Method and Procedure ................................................. __ 5 Market Potential for Texas Trees ............................... .. 6 Marketing Locally Produced Trees ...................... .. 6 Market for Christmas Decorations ........................ ._ 6 Marketing Practices for Texas Christmas Tree Wholesalers ...................................... .. 6 Shipping Point Information .................................. .. 6 Species, Size and Source of Christmas Trees .................................... .. 7 Methods of Sale .............................................. -. 7 Shipping Point Price Range .......................... .. 7 Loading and Transporting ............................ .. 8 Terminal Market Receiver .................................... .- 8 Changes in Quantity of Trees Sold .............. .. 8 Number of Dealers from Whom Trees Were Purchased .............................. .. 9 Duties of the Wholesaler ............................ .. 9 Purchasing of Christmas Trees by Wholesalers ........................................... .. 9 Source of Purchases ...................................... .. 9 Preferred Dates to Receive Trees .................. .. 9 Tree Quality .................... ... ............................ .. 9 Pricing of Trees ............................................. .. 9 Retailing ................................................................. -. 10 Displaying Christmas Trees .......................... .- 10 Retail Pricing ................................................. .. 10 Species Purchased ................................................... .. 10 Competition ............................................................ .- 1O Demand for Certain Artificial Trees ...... .. 11 Handling of Evergreen or Natural Trees... 11 Advertising ...................................................... .. 11 Acknowledgments ......................................................... .- 11 References ...................................................................... -- 1 1 United States is big business. - nually dispose of over 35 million evergreen trees in the $125 million a year U. S. Christmas tree market. Ap- 1 proximately 1O million trees are imported almost en- . tirely from Canada and artificial trees total about 5 mil- i‘ lion each year. alone increased about 6O percent from 1948 to 1962 (1). . Texas . Wholesale Market i" I01‘ Qtbristmas Ultras The growing and selling of Christmas trees in the The U. S. evergreen tree production About 2 out of every 5 evergreen trees decorated in American homes during Holiday Seasons were grown on privately-owned lands in the U. S. of these trees were harvested on small Christmas tree Y farms located principally in the Lake States, Northeast :_and Pacific Northwest (1). In the past two decades, numerous magazine and newpaper articles have cited {examples of both large and small-scale, profitable Christ- mas tree growing enterprises. These articles have gen- ietated interest among Texas landowners anxious to con- ¢sider growing Christmas trees on a part-time commercial ‘basis. About one-fourth In 1953, H. F. Morris estimated that Texas was importing about 2 million Christmas trees yearly (2). Despite the portion of the market captured by metal and ‘other artificial trees, this number likely had increased iby 25 percent by 1962. jconsidering the 25 percent increase in homes built in Tegfas between 1950 and 1960, U. S. Population Census Dam. The main species imported are firs, pines and This is about normal when spruces grown in more northern climates. In attempts Ito take over part of this market, Texas tree producers would have the obvious advantages of fresher trees and ilower transportation cpsts. (Christmas tree producing areas are to increase plantings ‘jand production. Reports from some states indicate that plantings nearly doubled the annual sales. However, trends in present i*Respectively, associate professor, Department of Agricultural Economics and Sociology, Texas Agricultural Experiment Sta- ition and forestry specialist, Texas Agricultural Extension ; Service. American producers an- H. B. Sorensen and W. A. Smith* Past Texas trials at growing the non-native firs, pines and spruces for Christmas trees or other purposes have been very unsuccessful (3, 4). Therefore, it was necessary to determine the extent of the market potential for species which could be grown in at least a part of the State. The Texas Forest Service requested that the Texas Agricultural Experiment Station and the Texas Agricul- tural Extension Service undertake a study with the follow- ing objectives: 9 Determine the potential for selling Texas grown Christmas trees. 0 Determine what the competitive market require- ments would be, i.e., what would local producers need to do to meet established marketing pro- cedures? ' How, when and where does the competition for markets occur — species, area of production, size, grade, quality and that arising from artificial trees? ° Would buyers discriminate against locally produced trees ? Method and Procedure The study was designed to use personal interviews of wholesale dealers in three selected Texas cities to develop information about their purchases of Christmas trees. A questionnaire was designed to include only the dealers who had the responsibility of deciding where and from whom the trees were purchased. Wholesalers who purchased from other wholesalers were excluded. The cities were Dallas, Houston and San Antonio. These cities were selected to survey major market areas and pro- vide geographic representation with a limited amount of time and money. In addition to the wholesalers in the selected cities, a mailed questionnaire was used to con- tact service clubs in Dallas, Fort Worth, San Antonio and Houston. TABLE 1. QUESTIONNAIRE RESPONSES OF CHRIST- MAS TREE WHQLESALERS AND SERVICE CLUBS IN SELECTED TEXAS CITIES, 1962 Wholesalers Service clubs Cities Usable Mail-ed Clubs Selling trees Contacted question- question- reporting Yes NO naires naires Number Number Number Number ——Percent-—— Dallas 13 11 45 27 15 85 Fort Worth 44 32 6 94 Houston 1 7 14 1 1 100 San Antonio 9 7 1 1 7 100 Total 39 52 101 67 221 179 Percent 100 82 100 66 55 45 This study obtained information on the 1962 mar- keting season. The number of wholesalers interviewed and the responses to the service club questionnaire are indicated in Table 1. Data were collected in November and December, 1962, and early in January, 1963. The use of 1962 in the tables will refer to that Christmas tree marketing season. In addition, 65 Shipping firms were mailed a re- quest for price list catalogues. Information concerning the selling and shipping of trees from the growing areas was obtained from the 41 responding firms. This report presents the results of these investigations. Market Potential for Texas Trees The market for locally produced Texas Christmas trees was investigated, as was the potential for marketing certain decorative materials such as pine cones, mistle- toe, holly and other items. Marketing Locally Produced Trees The buyers for wholesalers and service clubs were asked if they would buy locally produced trees if they were available. More than three-fourths replied “yes” if the trees were of comparable quality to northern species, such as Douglas fir and Scotch pine. Quality in this case referred mainly to tree form or shape, color and ability to retain needles. There is a market for locally grown trees, provided cultural techniques can be developed to improve tree form. Wholesalers pointed out that they did not have a minimum number of trees they had to buy, but would purchase as few as 100 trees per order. Some buyers said they would prefer initially to purchase a small quan- tity of about 100 trees or less to_test their saleability. Generally, they said they would buy in quantities the pro- ducer had available. Most of the buyers surveyed were shown representa- tive pictures of seven species of trees which could be rown in most or a part of Texas. These included short- leaf, loblolly, slash, and longleaf pines; redcedar; Arizona cypress and arborvitae. Response for the trees varied between cities, but shortleaf pine led the selection in all three because of its superior shape, especially as depicted in the picture shown to buyers. Redcedar was next in order of selection followed by slash pine. It should be noted that redcedar was more acceptable in the San Antonio area than in Dallas or Houston because the con- 6 sumers are accustomed to having them readily available from the surrounding areas. Buyers indicated they would pay as good a price for locally produced trees as for northern species if they were of equal grade and quality. Wholesalers were asked to estimate the amount of the 9 market that locally produced trees might capture within . They reported that starting with a small per- , centage of the market, the volurfie could be increased to g their area. 25 or even as high as 5O percent of the total market if the trees were of high quality and available in sufficient quantity. Container-grown or balled and burlapped evergreen » They are { purchased for planting outdoors after Christmas. About Z one-fourth of the respondents indicated that they had I trees are occasionally sold for Christmas trees. tried this type of tree for Christmas tree sales, but they had not been too successful in marketing them because of ~ space and extra care needed in handling. In addition to the trees used as exhibits in this study, some exotic trees might be tested to determine if they would make suitable Christmas trees. However, any species grown for Christmas trees in Texas will need to be pruned or sheared to develop them into the more com- pact, symmetrical shapes desired by the consumer. Trees x 1 i I 1 '3 #1 i .1 a a 2' 5 to 6 feet in height are the most desirable, but some markets exist for both shorter and taller trees. Market for Christmas Decorations These items were included in this category; boughs, mistletoe, pine cones, holly, magnolia leaves, sweetgum balls, colored leaves, decorative fruit, hardwood limbs _ and other material that a housewife might use for home decorations. Mistletoe, holly, pine cones and boughs were the more desired items mentioned by wholesalers. Wholesalers in the three surveyed cities indicated that in the past they had had opportunities to sell one or more of these items. However, they had been discouraged from further attempts to market decorative material be- cause it was not readily available in convenient packages and continuous supply. Also, if this material was not fresh, it detracted from sales. Some wholesalers were not interested in buying decorative materials. The rea- sons reported were that they were produced locally and sold directly to retail stores, thus eliminating the whole- saler, or the materials were too perishable for easy mar- keting. Problems in the marketing of Christmas specialties indicate a need for adequate, dependable supplies of a packaged materials so that the retailer can conveniently i handle it and have fresh material. There is a demand for this material by the housewife for decorating the a home, especially during the Holiday Season. However, much of this demand is currently being supplied by artificial materials made of plastic. Marketing Practices for Texas Christmas Tree Wholesalers Shipping Point Information At the shipping point, Christmas trees were cut from . planted tree farms, or as natural or wild trees from both private and public lands. Once harvested, they were hauled to the roadside, bundled and then moved to an Nova Scotia Y TABLE 2. SPECIES or CHRISTMAS TREES ADVERTISED BY SHIPPING FIRMS, 1962‘ p State or Dfug Scotch 153a? spruceligggfy 2:; White region fir pine fir pine pine Pine — — —— — Indication markers’ — — —— —— ‘ 5 Illinois X X X X X _j_ Maine X X Michigan X X X X X X “ Missouri X X ' Pennsylvania X X X X , »_ Wisconsin X X X X _, British Columbia X X X X ‘Sixty-five shipping firms were requested to supply a price list; 41 firms responded. ’Several firms were associations representing a number of growers. raccessible road where they were loaded. At the‘ cutting I site, the trees were graded, sized and bundled by species. iSfiecies, Size and Source 0f Christmas Trees There are a number of species of evergreens that are used for Christmas trees; for example, Douglas fir, Scotch pine, balsam fir, several spruces, Norway or red pine and white pine. Producing areas are in the northern section of the United States and Canada — Maine, Pennsyl- ;var1ia, Michigan, Wisconsin, Illinois, Montana, Washing- i ton and certain Canadian provinces, such as British Colum- 1 biasand Nova Scotia. spossible to purchase several species of evergreens to be I used for Christmas trees and from others only one or f two species were available for sale. , Christmas trees advertised during 1962 by selected ship- jj ping point firms located by states or provinces are shown Table 2. " trees from these shippers are shown in Table 3. in most instances, were referred to as top quality from "their own producing areas and occasionally they referred i to the trees as U. S. No. 1. . ideas as to what constitutes Christmas tree quality, but pi this idea of quality is not consistent throughout the i industry. From some shipping firms, it was The species of Available grades and sizes of Christmas Grades, Each shipper has his own , Met/sods 0f Sale Selling of Christmas trees at the shipping point varies with type of sale methods, i.e., f.o.b. delivered, ; tree on the stump, tree at the roadside and other means. Some shippers offered to obtain transportation while others did not. Thus, there exists a vast variety of mer- chandising methods for Christmas trees. There was competition in the marketing of these trees within and between areas and species. In some states a large number of small growers have formed a state marketing organization through which trees are sold} This allows for some control over the number of trees to be cut, grades, desirable sizes and other marketing information. In other areas, small individual growers did their own advertising and selling. In a number of instances, Christmas tree farms were owned by persons operating another business. Thus, marketing of Christ- mas trees was secondary and a part-time function for them. Shipping Poim‘ Price Range A review of the price lists received from shippers indicates a wide range of prices according to the specified conditions of sale. Table 4 indicates the 1962 range in Christmas tree prices at shipping points for various sizes of Scotch pine. The conditions listed cause considerable price variation and intensify the price competition for Christmas trees at the wholesale and retail level. The following list illustrates price variations ac- cording to sale conditions. 1. Quantity discounts were available — discounts varied with size of order. 2. Prices f.o.b. destination, in carload lots. 5. Prices f.o.b. shipping point or farm. 4. Prices f.o.b. shipping point with added transporta- tion charges. 5. One price quoted if seller cuts trees and an- other reported if buyer selects and cuts trees. 6. Prices delivered by area zone number. 7. Prices quoted on baled and unbaled trees. 8. Prices quoted loaded in freight car, 1O cents less when loaded in semitrailer, f.o.b. shipping point. 9. Prices quoted for sizes different from normal accepted size, examples: 3441/2’, 41/2551/2’, 51/257’, 61/219’, etc. ‘A list of the State Christmas tree associations and copies of their constitutions are available from the Agricultural Economics and Sociology Department, Texas A&M University, College Sta- tion, Texas. i; TABLE 3. GRADES AND SIZES OF CHRISTMAS TREES ADVERTISED BY SHIPPING FIRMS, 1962‘ Grades listed . Tr‘; Size of trees E t 1 t i‘ - Over X f‘? 5e ec U. s U s . . ' specles r r r r r I I I I r r r r r r I r Prernlurn tOP i i l Utlllty t. 2 -3 3 -4 . 4 -5 5 -6 6 -7 7 -s s -9 9 -11 11 quality No. 1 No. 2 j_» — — — — — — — — — — - — Indication Markersz — — — — — — — — — — — — — - -- J Douglas fir x x x x x x x. x . Austrian pine i‘ X X X X I Norway (red) ‘ pine _ X X X X X Scotch pine X X X X X X X X X .1 Wihite spruce X X X X X X X I ‘Sixty-five shipping firms were requested to supply price list; 41 firms responded. i, "Several firms were associations representing a number of growers. TABLE 4. SAMPLE OF 1962 PRICE RANGE FOR VARIOUS SIZES OF SCOTCH PINE TREES FROM SHIPPING POINT ARE Range in Christmas tree prices at shipping point (price per tree)‘ Size of trees Species — ~ — — — — — — — — — — ——Dollars————————————-——-- Scotch pine .85 1.00-2.00 1.15-2.50 1.25-3.00 ‘Sixty-five shipping firms were requested to supply price list; 41 firms responded. 10. Trees baled singly with automatic bale-r for a 10 cent additional charge. 11. Quoted tree prices when bundled by machine and placed adjacent to an improved highway for trailer truck pickup. If trees are taken from field not bundled, 10 cents per tree may be deducted from price. 12. Prices range from $1.25 to $1.50 on the stump for N0. 1 or better grades, 6 to 7 feet tall. Cutting and bundling would add about 35 cents per tree. Loading and Tran; portin g The loading and transportation requirements varied within each producing area. F.O.B. was one method of transportation while in other cases the buyers at the terminal receiving point had to make arrangements for the type of transportation used. Transportation was either by truck or rail, depending upon the distance traveled and the demands or wishes of the buyer. Rail transportation was generally used for shipments from more distant points such as Canada. The number of trees in each railroad car ranged from about 2,600 to 4,050. The trees were tied in bales or bundles by various height classes and each railroad car ranged from 600 to over 1,050 bales. The number of trees per bale varied — the smaller trees (2 to 3 feet) had 8 trees per bale, those 3 to 4 feet had 6 trees per bales, 5 to 6 feet had 4 trees per bale and larger trees (11 feet and over) had a single tree per bale. Therefore, the smaller number of bales per car may have indicated TABLE 5. BUSINESS CLASSIFICATION OF CHRISTMAS TREE WHOLESALERS INTERVIEWED IN SE- LECTED TEXAS CITIES, 1962 T eof -——~—————Citi6S———————— wshlolesaler Dallas Houston San Antonio Total Num- Per- Num- Per- Num- Per- Num- Per- ber cent ber cent ber cent ber cent Service wholesalers 2 18 8 58 1 14 1 1 3 5 Distributors 0 0 1 7 2' 30 3 10 Jobbers 0 0 1 7 1 14 2 6 Purveyors 1 9 0 0 0 0 1 3 Others 1 9 1 7 0 0 2 6 National chains 5 46 1 7 0 0 6 19 Regional chains O O 1 7 I 14 2 6 Local chains 1 9 0 0 1 14 2 6 Voluntary cooperatives 0 0 1 7 0 O 1 3 Cooperatives 1 9 0 0 1 14 2 6 Total 1 1 14 7 32 Percent 100 100 100 100 6'-7' 7'-s' s19’ 9110' 10'-11' - 1.40-4.00 1.75-5.00 2.50-5.00 2.50- 500- 5‘ that it contained more of the larger size trees. For ti reason, transportation can become an important w; factor, i.e. a lower number of trees per car causes an _ crease in the transportation charge per tree. Z, Terminal Market Receiver The term wholesaler includes a number of busines operations such as receivers, service wholesalers, distrii butors, jobbers and others. Therefore, it was importan to determine the type of business operation associatg with the wholesaling of Christmas trees. For all thr cities, the largest number were service wholesalers. Th next largest group were national chain stores. Table shows the distribution and types of wholesalers locat in the three cities. In order to have a better understanding of th‘ methods and experience of the persons ordering tre . from the shipping point, it was desirable to know hoi long the firms had been associated with the purchasin and handling of Christmas trees. The 11 fir 1 responding to the questionnaire in Dallas averaged 5f years’ experience; 14 firms in Houston ‘had a 13 ye‘ average and San Antonio's 7 averaged 18 years. Of th 14 reporting service clubs in the four selected areas thi average was 9 years’ experience, ranging from 1 to 1 years. One service club in Houston was the central pu chasing group that handled trees for the entire clu“ membership in that city. This information indicates t Q the buyers surveyed had considerable experience in put chasing Christmas trees. Changer in Quantity 0]‘ Tree; Sold Increases in the volume of trees handled is a u‘ indication o-f business growth. Reports from buyers i; dicated that the number of wholesalers who purchas Christmas trees from the shipping point had decrease However, the increase in business reported by survey wholesalers and service clubs was significantly great than the reported decrease. One-half of the wholesal. in the three selected cities during the 3 years beforf the 1962 survey stated an increase of business, nearl one-fourth reported a decrease, and 28 percent stat" their. business had remained the same. In the case 1, the service clubs, for the previous 3 years, the f0‘, areas reported that over one-half had increased, over s percent decreased, and nearly one-seventh had remaine the same. No check was made of the number of fir l“ no longer selling trees, or of the service clubs that di not reply to the questionnaire to determine an over Texas Christmas tree market change. , San Antonio had the largest increase in busin in both the service club and wholesale trades. S0 i of these wholesalers reported shipping large quantiti of trees to Mexico. The overall increases indicated q ..,.;,.» , -, v m1‘ the surveyed wholesale and service club Christmas tree a business had improved during the previous few years. Number of Dealer; from W’ 120m Trees were Purchased Sixty-four percent of the wholesalers an.d service ‘ clubs reported that they had purchased trees from more 1 than one Christmas tree shipping point dealer. The number of dealers from whom trees were purchased ranged from two to three for the wholesalers with an average of three different shippers. For the service clubs, it averaged two shippers. This indicates that the buyers do shop for the type of trees they want in various areas. ; This might be due to the fact that certain trees come from certain areas, and buyers are interested in purchas- . ing the better quality trees. Duties 0f the W/aoleruler The wholesaler or receiver at the terminal market -7 had various duties to perform, such as, ordering the trees I in advance long before the cutting season to insure de- .- livery; determining the number, size, grade and species j of trees; and selecting delivery date and type of trans- s portation. needed to receive these trees and move them to the Z various retail outlets on a specified date. . salers may sell directly to retail outlets or supply other 1 wholesalers who in turn furnish some of their retail , outlets with trees. The wholesaler or terminal market receiver These whole- The terminal market receiver may be an established produce wholesaler, or a service Club that is selling . Christmas trees as a club fund-raising project. * of a carload may be used by service clubs in adjacent Pooling i areas, thus splitting the transportation costs and satisfy- ing the requirements of ordering one carload. » Purcburiug of C/arirtmar Treer by W/oolemlerr The wholesalers interviewed had placed their orders , by at least November 1, and some reported placing orders with sales representatives as early as January or February. i, Some of the salesmen are lo-cated in the Southwest Christ- ’ m-as tree market areas. . stationed in other regions carry out a very aggressive i. sales program by making frequent contacts with pros- They, and sales representatives pective buyers. Sixty percent of the wholesalers reported that they i‘ also bought trees locally from wholesalers. This was done K when they needed a certain size or species of tree and . they were unable to have these shipped in soon enough to market. Also, a few individuals offered ungraded, I locally produced trees and they were purchased for public . relation purposes. * Souirre of Purchaser The wholesalers reported that buying directly from " the grower was their most important method of pur- 7 chase. Next in importance was purchase through brokers, followed by purchase through distributors and service _s wholesalers. This distiibution is shown in Table 6. The usual terms of trade among wholesalers were direct pur- , chases, f.o.b. delivered and other methods. Service clubs ' reported that direct purchases, delivered, consignment and charge accounts were the most important terms of trade ‘for the Christmas trees purchased. Most of the whole- salers reported that when they worked with a reliable TABLE 6. SOURCE OF PURCHASE OF CHRISTMAS TREES FOR WHOLESALERS IN SELECTED TEXAS CITIES, 1962 Source ———~———Cities———-—— Ttl of trees Dallas Houston San Antonio O a Num- Per- Num- Per- Num- Per- Num- Per- ber cent ber cent ber cent ber cent Growers 5 41 6 42 3 44 14 43 Service wholesalers 5 2 5 0 0 1 1 4 4 12 Sale agents for shippers 0 0 1 7 1 14 2 6 Brokers 2 18 5 22 1 14 6 18 Distributors 1 s 5 2 2 1 14 5 15 other 1 8 1 7 O O 2 6 Total 12 14 7 ' 33 Percent 100 100 100 100 grower, they could establish their own method of trade terms agreeable to both parties. When the wholesalers bought directly from the shipping point, they dealt primarily with the grower-shipper and shipping point broker, or with salaried buyers. Preferred Duter t0 Receive Tree; The wholesalers needed to have their first trees about 25 days before Christmas and averaged about 2O days before that holiday for their last delivery. They preferred to receive all trees in a short time; such as 5 days. The wholesalers said they needed to sell all of their trees about 7 to 13 days before Christmas, averaging around 9 days. Service clubs needed to have their first trees about 25 days before Christmas and their last trees about 18-20 days prior to that holiday. The clubs would like to sell all their trees a day or 2 before Christmas. Tree Quality One-fourth of the wholesalers reported that 85 per- cent of their purchases were for pruned or sheared trees and that their markets had been decreasing for the non- pruned trees during the past few years. They indicated a definite preference for the better formed trees which could be obtained from relatively intensively managed Christmas tree farms. When asked about the length of time the different species would remain fresh, three out of four wholesalers said they had found a difference. They indicated certain species remained fresh longer than others. From the buyers viewpoint, it was diffi- » cult to isolate a single species as superior to all others. However, all of the spruces were rated low on the char- acteristics of remaining green and fresh. They qualified their preferences based upon the condition of the trees, loading method and how they had been shipped and the amount of hot weather encountered in shipping. Pricing 0f Trees The wholesalers reported various methods of figuring wholesale markup. It varied from 25 to 5O cents per bun-dle or more and the individual tree markup ranged from 2O to 25 p-ercent. The markup varied through the season for the wholesalers and decreased as Christmas Day approached, especially if they had only poorer quality trees left. The wholesale markup was the same for all species of trees. TABLE 7. DISTRIBUTION OF CHRISTMAS TREES BY WHOLESALERS IN SELECTED TEXAS CITIES, 1962 - ————————Cities——————— Businesses Dallas Houston San Antonio Total Num- Per- Num- Per- Num- Per- Num- Per- ber cent ber cent ber cent ber cent Retail grocery 3 10 8 19 1 9 1 2 14 Supermarkets 4 1 3 7 17 1 9 1 2 14 Chain food stores 8 25 6 a 15 3 28 17 21 Gas stations 1 3 2 5 O 0 3 4 Individuals using empty lots 2 6 7 17 2 18 11 13 Service clubs 3 9 7 17 2 1 8 1 2 14 Youth groups 3 9 2 5 0 0 5 6 Other 8 2 5 2 5 2 18 1 2 14 . Total 32 41 1 1 84 Percent 100 100 100 100 According to the wholesalers and service clubs, the number of trees discarded in 1961 depended on a number of factors. These included how accurately they had estimated the quantity of trees needed and the condition of trees upon arrival or how long they remained green. The average wholesaler reported about 6.5 percent of the trees discarded, ranging from 4 to 10 percent. The service clubs had an average of 6 percent, ranging from 3 to 10 percent.) Retailing The wholesale establishments contacted in the three selected cities supplied trees to various types of retail outlets such as grocery stores, supermarkets, chain stores, gas stations, service clubs, youth groups and others, as shown in Table 7. Wholesalers reported that the retail outlets to which they sol-d trees varied in number from 40 to 135 per firm with an average of 79 outlets. The 24 wholesale firms reported they furnished 1,907 ~- retail outlets with Christmas trees. Displaying Christmas Trees The retail grocer and the service clubs competed with each other for Christmas tree sales. They performed similar functions for the purchaser. The trees are dis- TABLE 8. RELATIVE DISTRIBUTION OF CHRISTMAS TREES PURCHASED BY WHOLESALERS AND SERVICE CLUBS BY i played outside and arranged so that they will spread out to their normal shape for visual inspection by the cus-l ’ tomers. This requires a considerable amount of display area and most retail grocery stores were at a disad- vantage because they did not have adequate space. Service clubs usually used a vacant lot for display pur- poses. Both groups reported that when purchasers made selections, the trees were moved or shaken, resulting in some damage to them. Retail Pricing The retail markup varied with almost every outlet and ranged from double the wholesale price to increasing; it four times for an exceptionally well-shaped tree. The At {I16 ’ time of the study, the uniform grades or standards for The various shapes and sizes were generally sold as one grade, but some differentia- i tion was made in price. Trees with better shape sold for service clubs indicated this was near normal. trees were often used. higher prices and poorer ones sold for less. This sug- gests that there was not any set pattern for markup of trees a at the retail level. Wholesalers generally pointed out that the tree j should be symmetrical and well balanced with uniform Y Most of the retail grocery '_ stores handled Christmas trees for the convenience of f However, they reported that it was necessary for them to perform this service to maintain s grocery sales before the Holiday Season because shoppers spacing of the branches. their customers. would frequent those stores with trees for sale. Species Purchased The wholesalers and service clubs sampled in four Texas cities purchased over 527,000 Christmas trees l Douglas fir ranked first in choice with ' more than 445,000 trees, followed by Scotch pine and‘ balsam fir. The trees ranged in sizes from 2 to 3 feet i to trees over 11 feet in height. The most predominant i; size was 5 to 6 feet, followed by trees 7 to 8 feet. Table 8 f shows the distribution of Christmas trees purchased by j- iduring 1962. S1Z€. Competition Competition for Christmas trees came from a num- Y ber of different sources. It occurred between the evergreen SPECIES AND SIZE, IN SELECTED TEXAS CITIES, 1962 Species of -—-—————-Sizeoftrees————--——----_-i Christmas trees Christmas trees 2’-3' 3'-4' 5'-6' 7’-8' 8’-11’ 11' and over Number Percent — — — — — — — — — -—- Percent — — — — — — — — - - - Douglas fir 445,174 84.4 7 17 45 26 4 1 '9 Scotch pine 60,336 11.4 1 4 63 28 3 1 Balsam fir 18,100 3.4 9 9 54 18 10 0 Spruce 3,058 0.5 14 15 37 23 11 0 Norfolk Island pine 250 0.1 0 0 100 0 0 0 Redcedar 1 50 0.1 10 45 45 0 O 0 Austrian pine 100 0.1 0 0 100 0 0 0 White fir 75 * O O O 100 O O Norway pine 25 * 0 0 0 100 0 0 Total 527,268 100.0 Percent distribution 7 15 47 26 4 1 *Less than .05 percent 10 t. artificial trees, between species of evergreen trees, km various firms and areas shipping Christmas trees d between sizes of trees. Artificial trees or those whose tural condition had been altered may appear in a num- "r of different forms. They are made from aluminum, tic 0r fiberglass, or sometimes evergreen trees are cked, dyed, or painted. The metal, plastic, or fiber- - s trees may be used for more than 1 year, giving em a competitive advantage. The flocking of trees — raying a plastic substance on evergreen trees — is I ited only to firms equipped for performing this ration. These trees were marketed in all three cities -- the survey with larger ones selling for $40 or more. emand for Certain Artificial Tree; The demand for the aluminum, plastic, or fiber- ass trees varied for the three market cities in the study. e Dallas area seemed to have reached its sales peak 4 the supply was not increased for the current season. _.| some instances tree orders were decreased. In San » tonio and Houston, sales of these artificial trees were ill increasing in volume. _ Stores liked to handle the artificial trees because of eir uniformity. For this reason, they only had to 'splay one tree which was a good sample of the others aged in small cartons. One of their basic advantages uniformity of size and shape. Generally the packaged t es only came in two sizes, 4 and 6 feet. I andling of Evergreen 0r Natural Tree: By comparison, the natural Christmas trees needed w area for display, usually outside. Generally, the = ores did not have adequate space for this purpose. In a instances, stores had to have an employee take re of the tree sales alone. Wholesalers reported natural rees had a wide variation in quality and many trees ere not symmetrical in shape or did not have uniform acing of branches. However, they pointed out that the variation was much less for pruned, plantation-grown ees, and they indicated a decided preference for them. hen the Christmas trees were received they were re- 1 oved from bundles and then priced according to species ‘ d size. Also, competition appeared between species such as touglas fir and Scotch pine and between tree sizes. In ddition, competition arose for the Christmas tree mar- ets from various producing areas such as Michigan, Montana and Canada, and between pruned or sheared trees and nonpruned ones. Price was also important in the marketing of Christmas trees. This would include price by size, source, services performed at the shipping point and wholesale and retail services. These factors of competition must be considered in determining the feasibility of producing and marketing locally produced trees. Advertising The amount and type of advertisement varied between natural and artificial trees but much more was being done for artificial ones. Very little advertising of evergreen trees was noted for the period from November 1 to the middle of December. Their advertising appeared only in newspapers as a small ad by a local firm. Retail grocery stores sometimes had one-line ads or inserts on the availability and price of evergreen trees in their regular large advertisements. At the same time, large ads for artificial trees appeared in newspapers, brochures, national magazines, advertising catalogues for mail order companies and in local advertisements of retail stores. Many of these ads described the advantage of many years of use for the fabricated artificial trees. For this reason, consumers received much more exposure to artificial trees through advertising media than they did for natural or“ evergreen Christmas trees. Acknowledgments Grateful acknowledgment is made to the Texas Forest Service for sharing a major portion of the travel ex- penses involved andifor the assistance of District Forester D. W. Fate in performing this study. References 1. Sowder, A. M., “Christmas Tree Data for 1962," journal of Forestry, November, 1963, pp. 869-871. 2. Morris, H. F., "Christmas Trees in Northeast Texas,” Progress Report 1625, 1953, Texas Agricultural Experiment Station. 3. Morris, H. F., "Growing Christmas Trees in Northeast Texas,” TexaJ Agricultural Progresr, March-April 1963, Vol. 9, No. 2, pp. 15-16. 4. Zobel, B. 1., Campbell, T. E., Cech, F. C. and Goddard, R. E., “Progress Report — Survival and Growth of Native and Exotic Pines, Including Hybrid Pines, in Western Louisiana and East Texas," Research Note N0. 17, 1956, Texas Forest Service. 11 m." ~~ unnu- i’ tum snnou Q nu sunnnous I I'll! FIELD LIIOILTOIIES A eoornnnu aunons State-wide Research ‘k w..- is the public agricultural research agency oi the State oi Texas, and is one oi the parts oi Texas A6=M University. Location oi field research units ot the Texas Agricultural Experiment Station and cooperating agencies OPERATION ORGANIZATION Research results are carried to Texas farmers, ranchmen and homemalcers by county agents and specialists of the Texas Agricultural Ex- tension Service IN THE MAIN STATION, with headquarters at College Station, are 13 subje ' matter departments, 3 service departments, 3 regulatory services and y administrative staff. Located out in the major agricultural areas of Texas a l 20 substations and 1O field laboratories. In addition, there are 13 cooperatin Cooperating agencies include the Tex Forest Service, Game and Fish Commission of Texas, Texas Prison Syste ~ U. S. Department of Agriculture, University of Texas, Texas Technologic College, Texas College of Arts and Industries and the King Ranch. Som stations owned by other agencies. experiments are conducted on farms and ranches and in rural homes. THE TEXAS STATION is conducting about 4-50 active research projects, group‘ in 25 programs, which include all phases of agriculture in Texas. Amon these are: Conservation and improvement of soil Conservation and use of water Dairy cattle Grasses and legumes Sheep and goats Grain crops Swine Cotton and other fiber crops Chickens and turkeys Vegetable crops Animal diseases and parasites Citrus and other subtropical fruits Fish and game Fruits and nuts Farm and ranch engineering Oil Seed crops Farm and ranch business Ornamental plants Brush and weeds Insects Beef cattle Rural home economics Rural agricultural economics Plant diseases Two additional programs are maintenance and upkeep, and central servic‘ AGRICULTURAL RESEARCH seeks the WHATS, the WHYS, the WHENS. the WHERES and the HOWS o! hundreds oi problems which confront operators oi farms and ranches, and the many industries depending on or serving agriculture. Workers of the Main Station and the field units of the Texas Agricultural Experi- ment Station seek diligently to iind solutions to these problems. j 061a” ,5 kedearcé ~95 jOITLOIWOI/U If POgPQJJ The Texas Agricultural Experiment Station; _ Marketing agricultural products I