“It’s an extremely active area of the marketplace,” says George Kinkead, president of Turfco, which makes the T3100 spreader/sprayer in Blaine, Minn. “There’s been a giant jump in technology.”
Three major market forces are causing the surge in tech. The first is the need to increase productivity. With ride-on machines, LCOs can spread and spray at the same time. “You’re able to get two applications done at once,” says Dan Shiplov, a new product consultant at PermaGreen.
Applications get done faster and require only one employee instead of perhaps two or three. “They get more production done out of these applicators because the machines are getting more work done,” Shiplov says.
As such, manufacturers are developing ride-ons that are quicker and more powerful. Z-Spray machines by L.T. Rich Products (acquired by Toro in 2018), for instance, run up to 8 miles per hour.
High-capacity liquid tanks mean LCOs can cover more ground without refilling. Lebanon, Indiana-based Steel Green has a machine with a 60-gallon liquid capacity. Turfco offers a 15-gallon, 3-in-1 auxiliary tank that can be plumbed to increase total capacity to 33 gallons or kept isolated for herbicide or specialty chemical applications.
Versatility is a design priority. “We want to make one machine for all properties,” Shiplov says. At PermaGreen, this ranges from wide-open turf to properties with lots of trees, trim work, gate access, even steep slopes. When faced with such tricky terrain, the drop-down handle bars on the PermaGreen Triumph let the operator walk behind the machine.
Toro’s lean-to-steer unit likewise lets operators “feed and treat all turf types with one multi-use machine,” says Chris Vogtman, the company’s senior marketing manager. They can spray hedges, bushes and weeds up to 75 feet away thanks to the machine’s integrated hose reel.
Turf renovation can be a lucrative add-on service. “The mow/trim/blow guys – if they can add this into their service, they will see a nice profit bump for their companies,” Vogtman says. Contractors often can pull in enough revenue in a week or two to pay off a ride-on machine purchase, he says.
Another factor driving spreader/sprayer technology is the challenge of attracting and hiring young workers.
“They’re not willing to walk a yard and push a yard all day long every day; that’s just not their deal. This has really accelerated the ride-on phenomenon,” Kinkead says. And if employees who are walking yards see that a competitor has ride-ons, they may jump ship. This is forcing companies to upgrade to machines to retain employees and reduce turnover, he says.
Manufacturers are designing machines that are more comfortable and less fatiguing. “The work is essentially more enjoyable” as a result and that helps retain employees, Shiplov says.
They’re also making machines easier to operate so new employees can get trained and up and running more quickly. “The faster he’s trained on it, the sooner you’re making money with it,” Kinkead says.
Turfco innovations want to make the controls and operation of its machine “super simple,” Kinkead says. An example: the steering wheel. “The reason we went with a steering wheel was because everyone knows how to drive a car,” he says. The T3100’s front axle follows the terrain and absorbs a lot of the bouncing so the ride is less tiring, he adds.
The use of chemical products is under greater scrutiny. As such, manufacturers are developing more precise ways to apply them.
“We went to a mechanically regulated system where everything is regulated off the ground speed of the machine. That makes sure that everything is coming out accurately,” whether liquid spray or prills, Shiplov says.
Coverage no longer relies on the walking speed of the applicator, which can vary and cause product to be under- or over-applied. Either can result in unhappy customers and costly callbacks.
To help ride-on applicators improve accuracy, Turfco built in a wheel stop. When the steering wheel is turned all the way to the right or left, it locks and the machine automatically lines up the next pass so applicators don’t have to guess or follow tire tracks.
Z-Spray machines use a marking system that drips foam so operators can see where they’ve already applied product. Digital speedometers and built-in calibration charts help them calculate the appropriate amount of product to apply.
At GIE+EXPO this month, Toro will debut “smart control” technology featuring a rocker switch and digital integration to improve the precision of its lean-to-steer machine.
Another tech trend is low-volume spraying, which uses less water but the same concentration of product to control fungi, grubs or other pests. In most situations, spraying a quart per 1,000 square feet has proven to be just as effective as spraying a gallon per 1,000 square feet, Shiplov says. PermaGreen’s low-volume, low-drift spray technology lets LCOs treat 1 acre per 12-gallon tank. The Steel Green dual-boom sprayer applies high volume out of one set of nozzles and low volume from a second set of nozzles, so operators can apply liquid fertilizer while simultaneously spot-spraying for weed control.
Drop-down shields and hard trim features on some machines apply granular product right up to the edge of a hard surface without over-spreading and having to clean up granules with the broom or blower.
Manufacturers also have improved machine durability and ease of repair, so equipment is less likely to sit idle.
Steel Green tanks have overfill protection to keep spills away from expensive electrical and hydraulic components. Tanks also have a sump and drain so they can be completely drained without removing the hose. And spray nozzles are easy to reach and change.
PermaGreen spec’d in stainless steel parts to protect equipment against corrosion from fertilizer and other chemical products.
Companies have also upped their support of operators. “They want replacement parts the next day. They want a customer service representative who answers the phone and responds to emails – and even Facebook messages – for advice or troubleshooting,” Smith says.
At GIE+EXPO, Toro is introducing Horizon, a business management software program designed to increase profitability and help “control the chaos” of daily operations. It lets managers schedule jobs, track the location of crews and remotely bid projects.
Integrated with Quickbooks, it tracks and invoices for services, especially add-ons easily forgotten like weeding and watering. Turf science is built in, as well, with guidance on which products to use and how much to apply based on soil analysis.
Horizon is meant for users of any brand of lawn care equipment. People can enroll in the beta program for free at the EXPO.
Ride-on spreader sprayers continue to evolve. Some are being developed for specific kinds of use, properties and jobs. “The growth of specialized companies is increasing. There are a lot of companies chasing this,” Kinkead says.
The key is choosing the right machine for your needs, so do your research and ask questions, he advises. Will you use the machine for 100 hours a year or 300-plus hours? Will it be used primarily for large commercial properties or smaller residential ones? What do owners of three- and five-year-old machines say about maintenance and repair? “It’s a big deal to make sure you’re picking the right machine,” Kinkead says.
The much-larger mowing industry likely will pave the way for innovations in noise reduction, electric motors and rider-less equipment.
“The space where I think autonomous would be the most appealing would be in turf renovation,” Vogtman says.
For sure, manufacturers expect the demand for ride-on spreader sprayers to increase. There’s going to be more and more people going to ride-ons as time goes on,” Shiplov says.
Whether owners are turning in the keys or just looking for a cash infusion, M&A deals continue to be on an upswing. But where’s the money coming from and will it last?
Looking back at 2019, Lawn & Landscape has reported on more than 20 mergers or acquisitions this year alone, and by the time you’re reading this, that number will have increased.
The success this industry has seen over the last several years has also caught the eye of outside players like private equity firms, who know one thing is for sure: there’s money in mowing.
“Knowing that you can actually develop a game plan to make an acquisition build value by improving the operations of the business and adding acquisitions and then successfully exit within a reasonable timeframe…is a message to all the other investors out there that landscape is probably a pretty good investment,” says Ron Edmonds, consultant with the Principium Group.
We talked to a few green industry consultants to find out what’s keeping the business going and if the trends will continue into 2020.
“There hasn’t been anything like this before,” says Tom Fochtman, CEO of Ceibass Venture Partners. “In the past five years, there’s never been a better time to be a seller of a landscaping company.”
At the moment, there are about 20-25 active buyers in the industry, Fochtman says. The buyers are backed by private equity companies who have a good amount of capital to burn, and they want to spend it on landscaping companies. “There’s never been so much (money) available,” he says.
Jeff Harkness at Three Point Group says the number one force driving this M&A surge is private equity companies still raising capital. “(The private equity companies) have people who want to invest,” he says.
The public companies, like BrightView, also have shareholders who want to see them grow in size and revenue because that only increases their price per share, says Greg Clendenin of Clendenin Consulting.
“They care about their company’s value in the eyes of investors right now, and investors are buying to grow the companies,” he says. Fochtman says while private equity firms see that it’s a prime market to invest, the firms are likely invested for the profit margins that come along with the type of revenue streams the industry offers.
“These private equity guys are in it purely for the profit and they're taking the profit and getting out,” Fochtman says. And, while it’s a predictable move, he says the industry is seeing younger companies, about five to seven years old, starting to sell as well. “There's a couple examples of these recently formed landscape holding companies now selling, so the market's still pretty prime.”
With the influx of investors coming in, Edmonds says the demand by investors is currently higher than the supply of landscaping companies readily available to buy, which means some of the appeal for these investors has shifted a bit. It’s also opened the door to competition between investors. Harkness says companies up for sale have the benefit of weighing different offers before making any final decisions. Multiple offers are the norm now for a company on the market.
Investors are looking for recurring revenue, as it’s a proven and reliable source of business. In the green industry, this comes in the form of commercial maintenance, a precedent that Fochtman says was set back when Brickman and ValleyCrest (now merged as BrightView) were purchased, putting commercial landscaping on the map. Clendenin says he’s typically heard buyers asking for companies with a 70 percent maintenance and 30 percent design/build split.
“There are transactions being made where a clear percentage of the business that is pure maintenance is lower than what you might've seen sometimes in the past,” Edmonds says. Edmonds referred to a deal that happened last year that ended up involving a company that was more design/build than maintenance, but still proved to be well worth it. “At one point a few years ago, you wouldn’t have seen anything like that,” he says.
And, going along with the changing tides of the M&A market, he says years ago investors didn’t put much value into the snow industry – something that is also starting to shift as the market becomes more saturated with people ready to buy. “The best managed snow companies, along with that landscape maintenance component, is much more attractive than it used to be,” Edmonds says.
The overall market of the industry is also highly fragmented, Harkness says. Combined with the recurring revenue in commercial maintenance, investors are starting to see a return of four to five times their investment – typically two to three times the investment is considered “good” he says.
Even if you’re not thinking about selling, you should be preparing your business to sell, says Clendenin. Whether you follow through with a sale or not, readying your business will only cause growth.
“If you get in shape to sell in order to be the most attractive, you’ll grow,” he says. “(Once you do that) you’ve really got your foot on the gas and you'll do better now, but you'll be more attractive as an acquisition later, too.”
With that in mind, Harkness says a lot of companies aren’t where they need to be in order to secure a solid sale based on the age of the business and its earnings alone.
If you’ve watched the news you know we’re supposedly on the brink of another recession. With money moving in the green industry, the experts don’t seem to think the movement in the market will take a hit. In fact, most agree that this industry is, in a way, resistant to the downfalls of an economic recession.
“I don't really think the luster is going to fall off of commercial landscape maintenance anytime soon,” Fochtman says. “It may just slow a little bit.”
Edmonds says his long-term outlook for the industry is good, and he sees activity increasing within the next five to 10 years. He’s also optimistic about the market surviving the next possible recession. “In my opinion, one of the reasons that there's this been as much investment in the industry as there has been, is that the industry performed markedly better during the Great Recession than many people would have thought that it would,” he says. It’s no surprise, either, that the appealing part of the industry – the recurring revenue – is what will bolster the market in any sort of economic recession.
“Homeowners will cancel their lawn service and mow their own lawn when things get really tough,” Fochtman says. “But the building owner is not going to start mowing his own lawn…so commercial just has the aspects and those dynamics to it that make it a little bit bulletproof.”
And, there may be a silver lining that comes out a potential recession. Fochtman says he thinks we will see some interest spike when it comes to the residential maintenance segment of the industry. It will be a bit more challenging because of how highly fragmented it is, but Edmonds echoes his sentiment as well.
“I think we will see some figures emerge in the lower end of the residential market, which a lot of people thought would not happen,” Edmonds says. “There’s a lot of money to be made there.” A potential shift of the spotlight to residential maintenance could be due to the marketing efforts those companies push.
Advertising weekly mowing programs can lead to building up a dense customer base, which Edmonds points out circles back to the allure of recurring revenue. He admits it would take a larger player to invest in that type of business, but sees it as a viable possibility.
Fochtman says, “There’s still going to be a lot of capital available and a lot of good deals to be done.”
The auto industry is in a weird place in 2019 heading into 2020, and that’s a good thing for truck shoppers. Car popularity is waning quickly, forcing General Motors, Ford and Fiat Chrysler Automobiles to cancel the bulk of their sedan offerings to focus on the hot-selling SUV and crossover market. But the profit center remains pickups. GM, for example, posted higher profits in the first half of the year, despite declining sales, because of the massive profitability of trucks.
So, winning over the most pickup owners is vital for profitability. That need for truck buyers has companies fighting an all-out pickup war, launching new lineups with new features. Heading into 2020, buyers have more options, a huge variety of engine choices and high-tech features to make standard work tasks easier. It’s likely that some price competition will be prominent, too.
Ford’s most popular pickup underwent a mild redesign for the 2018 model year, so few major changes are expected for the 2020 model other than the availability of a 3L diesel V-6 that was introduced for the 2019 model but had limited availability in its launch year.
Power, fuel efficiency, and a wide variety of powertrain options are the F-150’s main selling points.
Ford’s Super Duty pickup line is redesigned for the 2020 model year, adding more power, new engines, a new transmission and several new gadgets. The goal: maintain the company’s dominance of the work truck world. The company’s Pro Trailer Assist system for hooking up trailers gets more sophisticated, autonomously positioning the truck trailer hitch over the ball. A reverse guidance feature helps drivers avoid jackknifes and accidents by correcting approach angles, and more versions of the truck will include WiFi capabilities.
General Motors’ pickups were completely redesigned for the 2019 model year, so few upgrades are coming for the 2020 model year outside of colors and interior options. Throughout 2019, the truck has gained sales and market share with more power and unique features. The Sierra truck line, for example, unveiled a multi-piece tailgate that can act as a step into the truck bed, a distance extender to haul longer loads or a workstation. The optional diesel engine gets slightly better fuel economy than Ford’s.
As with Ford, GM’s heavy-duty line is new for 2020, and the truck takes the towing crown. Pickup marketing is a numbers game – the most power and performance tends to win. So, the 35,500-pound tow capacity for a properly equipped truck topping Ford by 500 pounds will matter in commercials and to some buyers. The lineup has fewer engine offers than Ford’s Super Duty line, but the power range offering should be suitable for most buyers.
Stop me if this is sounding familiar. Fiat Chrysler Automobiles’ mainstream pickup was redesigned for 2019, making the addition of a light-duty diesel engine option for the 2020 model year. And, like the Ford and GM engines, it’s a 3L model. However, the FCA model boasts V-8 level, heavy-duty statistics, making it a tough option to ignore for people who want to maximize work capacity without moving up to the larger vehicle class.
FCA unveiled its commercial line for the 2019 model year, and no major changes are expected for 2020. Last year, it took the torque crown in the pickup world, crossing the 1,000 pound-feet of torque that all of the major producers have been approaching for years. The Cummins engine features a compacted graphite iron (CGI) engine block that required massive upgrades at the Indiana factory that produces it because the material is so much harder than traditional cast iron.
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Fuel is the life blood of any landscaping company, flowing through the inner workings and powering its trucks, mowers and other equipment.
Fuel is also a major cost consideration and managing its use wisely on a continuing basis can pay dividends in an economic climate where every dollar matters.
We checked in with several companies to get their take on how they approach the issue of fuel management and what can happen when it isn’t a priority for owners, operators and employees.
For Serpico Landscaping in California, fuel is one of the company’s top expenses. “Time wasted (fueling equipment) will kill an operation,” says Peter Novak, company president. “And anything that affects productivity does ultimately mean lower margins and higher expenses.”
John Hoy, owner of Hoy’s Landscaping in Pennsylvania, says his employees are instructed to fuel the company’s fleet of trucks up before the gauge hits the one-quarter full mark. “It’s not good to run out of fuel, especially in diesels,” he says. “We had a truck run out a few years ago and it ended up costing a few grand to get it back on the road.”
Dan Dombrowski, owner of Intelliscape Landscaping in New Jersey, says his company has increased its prices at times to help control increases in fuel. When fuel spiked, the company tacked on a surcharge for a short time. This is why every ounce of fuel matters.
“If you don’t track (fuel consumption and what it costs), you could be overcharged for fuel, which we have from suppliers as well,” he says. “You can also run the risk of employees taking fuel.” Chris Cotoia, owner of Executive Landscaping on Cape Cod, Massachusetts, says his company has had to pass on higher fuel costs in the past, which was met with “mixed reviews” from customers. He says it is best to try and recover projected increases by forecasting increases.
Hoy’s Landscaping has a fleet of seven trucks and not all hit the road every day. “We have dyed diesel tanks in our yard to fill up equipment, such as skid-steers and bark blowers,” he says. “As far as on-road diesel and gasoline goes, we have two fuel stations within a mile of our shop and we fuel up at those locations as needed.”
Having one person in charge of fueling can prevent needless waiting around (and being paid for it) by other workers as the trucks and equipment have their tanks filled up.
“Our foremen start a half hour earlier than laborers so that they can fuel up the trucks and get everything ready to go in the morning,” Hoy says. “That way only one person gets paid to stand at the gas pump instead of three on each crew. Our mowing crew can usually stretch it and go two days without fueling up. We have a gas tank and pump in the rig to keep production moving, however the mowers are thirsty and go through the tank quickly.”
Hoy says “longer standing, more responsible and trustworthy” foremen have company credit cards that they use to fuel up trucks and equipment. “We go over the credit card statement for each guy to make sure there isn’t any unexpected or crazy expenses on the card,” Hoy says. “You’d be surprised how many times you can catch a Hershey bar or coffee on the fuel bill. For this reason, we only have a few company cards and they are kept with the most trustworthy employees.”
Hoy would “love” to have on-site gas and on-road diesel, “but our township and state requires a lot to do, so for the time being our system works.” He prefers that his crews fuel up in the afternoon, though most employees are in “such a rush to get home” in the afternoon that they push off the fueling until the morning. “Our company policy is no stops during the day, unless absolutely necessary, as it is wasted time during the day and a huge loss of production,” Hoy says.
Intelliscape Landscaping manages fuel by having on-site fuel tanks where usage is monitored, with one foreman able to use fuel tanks to fill up at on-road diesel and regular gasoline fuel pumps, as well as the on-site tanks. “We do this to reduce downtime and not have guys waiting at pumps, as well as to reduce the need to have to bring trucks and trailers into a crowded gas station,” Hoy says.
When Intelliscape Landscaping crews fill up on fuel depends upon when they return from assignments on any given day. It’s paid time. “We have multiple crews, so we try to have them rotate. Doing it this way – no one is waiting for the pump. We used to use a fleet card, but now we pay for fuel with a company credit card.” His company records fuel deliveries and compares them to past fuel deliveries, but, he admits, “it is hard to keep track of what trucks and machines are using.”
Serpico Landscaping has partnered with a mobile fuel delivery service that visits its locations at night and refuels all service vehicles and fuel containers. The service provides a wide range of reports and analysis to help the company maximize its return on fuel. Serpico Landscaping uses diesel and regular unleaded gasoline.
Novak says the service has helped Serpico reduce non-productive stops (gas station stops) by close to 500 stops a month.
“This unlocks one-and-a-half to two hours of available production hours per week, depending upon the crew size,” Novak says. That has been a huge plus for us, to allocate this time back to our crews for higher levels of detailing, new accounts, or additional training. Our client retention has improved as a result.”
Cotoia has addressed fuel management in two ways. “One, we have a mechanic assistant who comes in at 5 a.m., daily and has two hours to fuel trucks on a rotating basis. He also brings portable small equipment fuel jugs and two 50-gallon fuel transfer tanks to be filled daily as needed.”
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The fuel Executive Landscaping uses in its trucks and equipment is a 50-50 split between diesel and gasoline. Small construction equipment and other maintenance equipment are filled by jugs and transfer tanks. Fueling is done at gas stations to reduce labor waste. “We fuel up in the early morning as it reduces time at the gas station, and we find the afternoons busier at the stations,” Cotoia says. Employees are paid for the time fueling, using a national fueling credit card that is assigned to each truck.
Executive Landscaping tracks fuel purchase and usage by vehicle and equipment fuel by service type: i.e. maintenance equipment fuel versus construction equipment fuel. “We have had employee theft, but it’s easily identified when looking at mileage versus fuel purchased for the trucks, but a bit harder to determine with equipment fuel tracking,” Cotoia says.
With the price of diesel and gasoline likely not to drop but only rise in the future, doing your best to keep detailed records and assigning the fueling process for trucks and equipment at specified times and to veteran and trusted employees can save cents and dollars that add up fast. Those savings can have significant impacts on a company’s bottom line and ability to not have to pass fuel costs on to customers.
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