Growers Seek to Renew Demand for Live Christmas Trees

Joe Sharp has traveled the world but says he has never found a more perfect Christmas tree than in Oregon, the nation's largest producer in a $791 million industry and a leader in the effort to revive the holiday market for live trees.

Sharp, a former airline executive turned tree grower, has created a "designer tree" out of the noble fir (search), a fragrant and sturdy evergreen that only the climate and soil in Oregon can produce in abundance.

Sharp and his Yule Tree Farms (search) are shipping noble firs across the country to test the demand for a higher-priced tree that is carefully managed from seedling to shipping, resulting in a lush, symmetric shape that resists drying.

He is betting that consumers will justify the extra cost in exchange for the guarantee of a classic appearance and durability, along with the reassurance his operation is friendly to the environment.

Tree farms turn idle acreage into productive farmland, protect against erosion, provide jobs and their products can be recycled and regenerated — unlike the petroleum-based plastic used to make artificial trees, Sharp said.

"It's just part of the whole industry that has been developing to bring the farm experience back to urban Americans," Sharp said.

So far, the reception to the Oregon noble firs has been positive in test markets, despite a $70 to $80 price tag in some areas.

"I don't think we'll have any problem selling them," said Tom Anrico, a veteran buyer for Stew Leonard's, an upscale supermarket chain based in Norwalk, Conn.

The designer tree is part of a larger marketing effort by the National Christmas Tree Association (search) to renew consumer demand for live trees.

"Our market has shifted on us and we just didn't pay attention," said Irwin Loiterstein, director of the association's national marketing campaign.

He notes annual sales of live trees dropped from about 32 million in 2000 to 23.4 million in 2003, while the number of artificial trees displayed each year has grown from an estimated 50.6 million in 2000 to 62.9 million in 2003.

The shift shows that consumer trends have become more complex and tree growers need more sophisticated techniques to reach buyers, Loiterstein said.

For example, he said the trade group has noticed what appears to be a move back to traditional holiday values by the so-called "Generation Y" — an age group from 14-28 that has seen a steady increase in divorce and single-parent homes and views the holiday as a way to reunite families, if only temporarily.

"They are very family oriented," Loiterstein said.

"Half the fun of the holidays is picking out a tree on a lot or a farm," he said. "You don't get that experience with going to Wal-Mart (WMT) and lugging a plastic tree home in box, so we have to remind them of that."

Ron Hudler, who operates the Hudler Carolina Tree Farm Inc. (search) in North Carolina, the nation's No. 2 producer, says growers are working to adapt to changing tastes and offer more alternatives. But given the lead time required, it is difficult.

"The decisions we made six to seven years ago are the ones we have to live with in today's market," Hudler said.

Shipping has become a factor with the increase in fuel costs and busy trucking companies unable or unwilling to shoulder the extra burden.

"The unique thing about Christmas trees that a lot of people forget when comparing them to other agricultural products is that Christmas is such a compressed harvest season — it's just a crazy time of year," said Brian Ostlund, executive secretary of the Pacific Northwest Tree Association (search).

"If growers don't have to reach too far outside the traditional boundaries of putting them on trucks to Los Angeles or Dallas-Fort Worth, they can handle it," Ostlund said.

But the industry must move to expand markets, he said, including efforts to sell trees in Mexico, Japan and China.

"You have to pay attention to where the customers are at. You can't just wait for the phone to ring," Ostlund said.