(Bloomberg) -- Millennials have earned a reputation for loving consumer products that are local and artisanal. So why are they buying so many plastic Christmas trees?
That’s the question irking Tim O’Connor, the executive director of the Christmas Tree Promotion Board in Littleton, Colorado. To help capture more buyers, growers are positioning themselves as analogs to the local and organic food movement. Real trees have all the things younger adults are drawn to, he said, touting authenticity, benefits to the environment and support for regional economies.
They’ve got their work cut out for them. While almost 95 million U.S. households will display a Christmas tree this season, only 19 percent of those are expected to be real, according to a survey conducted by Nielsen for the American Christmas Tree Association released Thursday. While some houses display both types of trees, most will be putting up artificial trees, usually made from plastic and coming from factories sometimes located across the globe.
The tide could already be starting to change, according to George Richardson, the co-owner of Richardson Farms in Spring Grove, Illinois, who’s a fifth-generation farmer. He plants 10,000 seedlings a year on his operation, where buyers can choose and cut their own tree.
“Real Christmas trees were immensely popular in 40s 50s 60s 70s 80s, and then the fake trees got in,” Richardson said. “For a while, people thought, this is so convenient, let’s do that. Now we’re finding out that maybe they’re not the healthiest, pristine thing we thought they were, and they’ll end up in a landfill.”
The best customers of real trees are families with children. Older adults from the Baby Boomer generation are becoming empty-nesters, while millennials -- a cohort of young people now aged about 18 to 35 -- are on the cusp of starting families. That’s left a gap for real trees, which have lost buyers as artificial trees gained.
But the real-tree industry says there’s potential to win big over the next decade as young families bloom. Only 20 percent of millennials currently have young children, O’Connor of the farmer-funded Christmas Tree Promotion Board said. That leaves the lion’s share of the biggest generation -- and their future Christmas traditions -- still up for grabs.
O’Connor is also hoping to capture younger consumers’ interest in sustainable products to boost sales. Real Christmas trees are farm-grown like a crop, not cut from a forest, he said. They grow on grounds not suitable for higher value crops, turning carbon dioxide into oxygen, and their roots hold soil in place. When they’re cut, a new one is planted, and after being used, they can be recycled into mulch. Oregon is the top growing state.
Still, artificial trees appeal to consumers looking for re-usability and convenience, said Jami Warner, the Sacramento-based executive director of the American Christmas Tree Association, which promotes both the farm-grown and manufactured varieties. It can be set up in minutes and there’s no mess or watering involved.
Another hurdle for real trees: rising prices.
A real Christmas tree will probably cost about 10 percent more this year compared with last, said Doug Hundley, a spokesman for the National Christmas Tree Association, which represents growers. Tree supplies are tight, and demand is expected to be robust due to the healthy economy and signs that consumers are set to splurge this holiday.
Supplies are still in recovery mode after plantings took a hit during the recession in 2008. It takes as long as 10 years for a tree to grow to market height, so plantings made during the slump are coming to market now.
There could be regional shortages and short supplies even in big box stores closer to Dec. 25, according to Hundley.
“People have extra money to spend on Christmas, so there’s lots of pressure on the demand side,” he said.
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