Christmas tree industry skeptical as Amazon enters market
Amazon has figured out where its customers should put all of the gifts they buy from the online retail giant this holiday season: under a Michigan-grown Christmas tree.
The company began shipping real full-size Christmas trees for the first time this week, some of which come from Michigan farms, Amazon spokeswoman Saige Kolpack said.
That makes the e-commerce giant the newest retailer in the state's $27 million wholesale Christmas tree business. Michigan is the third largest producer of Christmas trees behind Oregon and North Carolina.
Only 1 to 2 percent of the 27 million real Christmas trees purchased last year were bought online, according to the National Christmas Tree Association. But Amazon has a history of disrupting how people purchase goods. Those in the industry, however, remain skeptical.
"It's just opening up another avenue to bring real trees to people," said Amy Start, executive director of the Michigan Christmas Tree Association. "I think it might be a more popular choice for those who live in a city and might not have a car. Will it affect the industry a lot? It remains to be seen."
Dutchman Tree Farms in Manton, one of the largest wholesalers in Michigan, isn't worried, said Chris Maciborski, a partner at Dutchman.
The 8,000-acre farm across several counties in central lower Michigan has delivered fresh trees for eight years. During the peak season, it ships 130 trucks of trees mostly across the Eastern half of the United States. So far, it has sold half a million this year.
"Any time a real tree is being sold, there is no harm," he said. "... The real draw of choosing a tree is to go out and see the tree, smell it, share the experience of choosing your own tree. Being able to buy a tree and have it delivered is a convenience to the customer. That can’t be bad."
Ana Serafin Smith, senior director of communication at the National Retail Federation, said Amazon's move and success in the greater retail sector is a reflection of the changing mindset of consumers.
"Most consumers want as seamless a way to shop as possible," she said. "It's not that much different from having food delivered. All of this is driven by the convenience factor. Amazon never would have made this decision if there wasn't a market for it, and there definitely is."
Amazon is delivering trees from North Carolina and Michigan through Miami-based Costa Farms and Kansas City, Missouri-based Hallmark Cards Inc., Kolpack said. For $109.99, Amazon is delivering 6- to 7-foot Balsam Fir, Fraser Fir and sno-tip Black Hills Spruce trees in a box to customers' doorsteps. Black Hills Spruces without white-tipped needles are $99.99.
Last year’s average Christmas tree retail price was about $75, according to the National Christmas Tree Association.
Hallmark spokesman Andy DiOrio said the company was unable to provide The Detroit News names of Michigan growers in the program because of confidentiality agreements.
Amazon's package includes a tree stand, care instructions, a tree preservative and a biodegradable bag for removal. It takes one to two days to process orders and two to five days to ship. Delivery is unavailable in Hawaii and Puerto Rico.
Amazon sold trees shorter than 3 feet last year, and other merchants used its marketplace to sell larger ones. Shorter trees, wreaths and garlands also are available this year.
Michigan wholesalers said the new venture is a good opportunity for the live Christmas tree business, as artificial trees have grown in popularity. According to the Michigan Christmas Tree Association, Michigan will supply around 2 million trees nationally this year. In 2017, the industry received $27 million across its 27,000 commercial acres and an additional $1.3 million in sales of wreaths, cut boughs, garland and other greens.
Retailers, however, said Amazon's delivery could affect their business.
"I don't know if it will affect my retail lot," said Fred Stempky, a second-generation grower with a 100-acre nursery and a retail location in Livonia. "That could be seen over the years. I'm shocked they're doing it. I can't believe they can impact it that dramatically. It's just a little too early to tell."
Stempsky said it can be a challenge already to compete with the low prices found at box store retailers such as Costco, Home Depot and Lowe's. He diversifies by selling nine tree species and the "monsters," trees that grow up to 16 feet tall. Those cost up to $150, though a majority of his trees sell between $40 and $60.
The goods news, he said, is that so far, this year has been one of the best years the farm has seen on its wholesale side.
"I've never gotten as many calls from out of state as I did this year before," he said. "I got a large amount of inquiries about trees from out-of-state retailers, and I'm not even that large of a grower."
Stempsky said a severe drought in the Carolinas nearly a decade ago is probably one of the major reasons for the extra interest.
Start also said this year's lot is a tight supply as slow planting during the Great Recession catches up in the market. On average, according to the National Christmas Association, trees take seven years to grow to 7 feet, though some can take as long as 15.
"A lot of people got out of farming or weren't planting as many," Start said. "I wouldn't say there's a shortage, but if you're in Arizona and you wait until the last minute, you might not be able to find what you want."
Mary's Farm Market in Canton Township, owner Mary Hauk said, is short 150 or more trees this year. She also has had challenges finding greens to make wreaths and blankets.
"A lot of trees have gone out west and down south, and it's shorted the Michigan sellers," she said. "You're short of trees unless you ordered this summer. Trees are far and few between. It's hectic."
Hauk said her normal supplier shipped out eight semis to a state it hadn't served in years, citing demand because of fires out west and hurricanes affecting the Carolinas.
Hauk's trees start at $60 and go up to a couple hundred for the 14-foot trees. Since starting to sell last week, business has been slow, she said, though the 12-foot and larger trees are gone.
Mary's Farm Market delivers and sets up the big trees locally for a fee. She said she thought Amazon's prices were high.
"It may have some effect," Hauk said. "It might work for the busy ones that are used to using that and only that (website). For most of our customers, it's a whole family affair. A lot of people enjoy doing that."
Kim Lucas, vice president of Lucas Nursery & Landscaping in Superior Township and Plymouth, said Amazon's service would take away the memories that come with picking out a Christmas tree.
"How are people going to see what their tree looks like?" Lucas said. "Amazon's a good company, but it's a fresh product. Maybe the millennials will use it, but people my age, like in their 50s, I don't think they would. I don't think that's going to fly."
Lucas' two locations sell the 1,200 trees grown on its 127-acre farm in Kalkaska, and for more than a decade, Santa Claus has visited the location on Ford Road in a helicopter. This year's visit is scheduled for 11 a.m. Dec. 1.
"We have repeat customers because we cut our own," Lucas said. "People know, so they always come back. We've seen kids grow up, and they still come every year."
Those experiences, said Tony Stefani, a second-generation owner of Hillside Christmas Tree Farm in Manchester, outsell any delivery. The choose-and-cut farm on average sells trees for $45 each.
"Amazon is a great win in the real tree industry," he said. "But we're selling memories and tradition, making an experience instead of just selling a tree. This isn't just the business and money of it. It's families coming and kids smiling, and that's a good feeling."
Freelance writer John Russell contributed.