One of the biggest impacts of the pandemic, according to a recent report from Freedonia, has been the increased amount of time people spent in their yards, with DIY home gardening and landscaping projects among consumers’ favorite quarantine activities. The Freedonia Group National Online Consumer Survey (conducted in November – December 2020) found that 39% of respondents said that because of the coronavirus, they were currently spending more time on projects for their homes’ outdoor space. That trend is certainly been seen in stronger mulch sales in many parts of the country, including both bark and colored mulch.
In fact, as Brad Tuminello, owner of Louisiana-based Southern Packaging commented, ground cover, 2x4s, or pretty much everything else that is sold by The Home Depot or Lowe’s was a hot ticket. “Last year with COVID like everybody else in the mulch business, I had a record year,” he said, noting that 2021 is also starting off well.
The company installed a form, fill and seal machine from Hamer Fischbein, reducing the labor required for the line from six employees to just one. This lone operator now merely oversees the process. The company has a second line on order that should arrive in the summer.
“In 2020, COVID forced people to stay home, which in turn caused an explosion in the mulch market,” reported Michael Hundt, regional sales manager for Rotochopper. “People took their travel budgets and diverted it to home improvement which included yard projects. This coupled with a slowdown in manufacturing which in turn caused a decrease in pallet waste caused mulch shortages in many areas of the country.”
Mulch has been on the move across the country in recent years, and accelerated by the pandemic. “The colored mulch market started on the east coast in the early 90s,” explained Nick Korn, regional sales manager – West Coast Territory for Rotochopper. It has basically been moving west over the last 25 years.” He observed that it took many years for the colored mulch market to really gain traction on the West Coast, given the availability of bark mulch.
Over the last probably eight to 10 years, the colored mulch market has finally arrived on the West Coast and started to grow. “And I think it really just got a turbo boost this past year from COVID,” he said. And the uptick has not just been around mulch. The residuals market for compost and soil blends has also been strong, again supported by the home landscaping trend.
Aside from mulch and soil amendments, the residential wood pellet market has also been strong, according to Bill Miller, COO at Vecoplan Midwest. With people spending more time at home, it is another logical area of growth. He noted that Vecoplan has built wood pellet plants for many companies over the last 10 years and that they are reporting strong sales. As for colored mulch, “Everybody’s telling me that they’ve had a booming year in 2020, due to the fact that with COVID, everyone was staying home and trying to work in the yard.”
According to Chad Dyson, plant manager at PalletOne’s Mocksville facility, his location has seen the robust mulch market hold steady even into 2021. Sales were higher than normal for January 2021, although wet weather has impeded getting material out of the forest to make chips. As a result, inventory on the ground was down over 30% from what is typical at the time of our call. PalletOne offers playground mulch as well as colored mulch. Its markets for dry and wet sawdust have been steady.
Regional Variations
The COVID-19 boost has also resulted in stronger mulch markets in Vancouver, Canada, according to Jordan Sangha, president of Ground Cover Services, based in Abbotsford, British Columbia. The company specializes in sawdust, wood chips, bark mulches and soil blends. He reported that residuals markets have been strong across the board, driven by a decline of local wood remanufacturing which has resulted in the production of fewer residuals locally and a tighter supply situation. “Usually, this time of year is pretty quiet, but we’re having a lot of inquiries,” he said.
Pulp mill closures have also impacted residual outlets in some areas. For example, the closure of the Northern Pulp operation in Pictou, Nova Scotia at the end of January left a huge void for that region. As a result, the Nova Scotia government has signed an order requiring the provincial electrical utility to buy more wood chips for biomass boilers used to generate electricity. “That gives sawmills a place for their wood chips and their residuals, which is critical for them,” Kelliann Dean, the deputy minister of intergovernmental affairs and chair of the province’s forestry transition team, told reporters.
Even given the strength of the mulch market, Southern Packaging has struggled with sawdust sales. A Georgia Pacific paper mill located 30 miles away used to take all the sawdust and chips, but it was shut down. It currently sends dust to a pellet mill. “The value of those residuals is shrinking, at least for the time being, until someone else comes into the market,” Tuminello said. He rated residuals as his companies second leading challenge, after labor availability, and ahead of raw material supply.
What’s Ahead for Mulch?
The recent growth in the number of employees working remotely is likely to continue, according to Freedonia. “This was a latent trend accelerated by the pandemic, and companies now have more established infrastructure to enable remote work going forward,” Freedonia reported. As a result, consumers are likely to continue spending more time at home to an extent. This will create a longer-term positive trend for gardening and landscaping as people retain extra time spent not commuting to and from work. It predicts that demand for packaged mulch and other ground covers in lawn and garden applications will rise to 3% per year to $760 million in 2024.
Operators interviewed for this story were guardedly optimistic about the outlook for residential-driven residuals such as mulch, soil amendments and heating pellets for 2021. Strong growth all depends upon when the economy opens up, how comfortable people become about travel in the months ahead, and how much the remote work trend continues. Continued strength in 2021 seems likely given the current market assumptions and trends.
