According to Floriculture Crops reporting (USDA, NASS), about 67.4 million potted poinsettia plants were produced in the 36 states surveyed for 2001, with a wholesale value of about 256.2 million (a 4% gain in value over the previous season). Yet, little is known about the ultimate consumers of these Holiday plants. In this article, we model US consumer demographics that influence poinsettia purchasing, and show that the key demographics underlying poinsettia purchasing are favorable now, and are predicted to be even more favorable over the next decade. These trends support a projected increase in consumer demand for poinsettias in the US.  The key challenge for poinsettia suppliers, growers, and retailers is to meet this upcoming demand opportunity with an ample supply of quality product.

Since 1996, Prince & Prince has monitored the US consumer floral marketplace with its periodic nationwide survey, "Consumers Rate Their Floral Outlets". In these studies, we measured the consumer household incidence of purchasing numerous floral products, including potted poinsettias. By household purchasing incidence, we mean the purchase of one or more poinsettias by the household during the previous Holiday period.

In order to perform an in-depth analysis of demographic trends leading to future poinsettia purchasing, we pooled purchasing incidence data for poinsettias across our three study periods (1996, 1998, and 2000). This provided us data from over 3,300 randomly-selected floral buying households throughout the US. Due to the nature of our survey, our respondents tend to be floral buyers, as over 95% of our households had purchased at least one floral product over the prior year. The surveys also collected various consumer demographic measurements that are used in our analysis (Table 1).

Our methodology comprised "tree segmentation modeling", a data-mining research technique that is efficient in uncovering relationships in a database structure (see "About Our Analysis"). The output from this analysis results in a predictive tree diagram that succinctly shows how the purchasing of poinsettias and consumer demographics are related.

The left-most box in the tree diagram (see Figure) reveals that across 3,300+ randomly-selected floral-buying households nationwide, 38% had purchased at least one or more poinsettia plants annually. The household demographic characteristic that best distinguishes high and low purchase incidence of poinsettias (from all of those listed in Table 1) is the age of the respondent. This means that the age demographic is the most important underlying consumer factor that distinguishes poinsettia purchasing. Households where the respondent is aged 55-74 have a much higher likelihood of purchasing poinsettias, whereas households where the respondent is under 35 have a much lower purchase likelihood.

The top-third portion of our tree diagram explores poinsettia purchase likelihood for those aged 55-74. For this group, purchase likelihood is 48%, about 10 percentage points higher than the overall average. If an adult in these households has attained at least a college or professional degree, then purchase likelihood increases to 54%, and purchase likelihood jumps to 72% if these same higher-educated households are located in the South Atlantic region. Thus, age, education, and to a lesser extent, region, are key consumer demographics leading to higher likelihood of poinsettia purchase. For those aged 55-74 with a technical degree or less education, poinsettia purchase likelihood is lower at 42%, and drops to 22% if these more mature, lower-educated households are comprised of single males.

For households where the respondent is aged 35-54 or those aged 75 or older (middle-third portion of tree diagram), poinsettia purchase likelihood is similar to the overall average, 38%. For this group of consumers, household income further differentiates poinsettia purchase likelihood. If household income for this age group is over $75,000 annually, then poinsettia purchase likelihood increases to 46%, and rises higher if these households are in cities/towns and not comprised of single males. If household income for this age group is between $25,001-75,000 annually, then purchase likelihood is about 37%, and also rises higher if these households are not single adult households. If household income for this age group is $25,000 or less annually, then purchase likelihood drops to 24%, and drops further to 14% if these households are from our year 2000 study (compared to our earlier studies). This finding suggests that the beginning downturn in the US economy in 2000 was affecting some floral purchasing, being most evident for predominantly middle-aged, lower-income households.

The bottom portion of our tree diagram shows results for households where the age of the respondent is under 35. For this group, poinsettia purchase likelihood is lower at 27% (11% lower than the overall average). However, if these younger-aged households have annual incomes over $50,000, then purchasing incidence rises to 33%.

Since the age demographic is key to poinsettia purchase likelihood, we examined projected Census trends in the age of US consumer householders, from the year 2000 through the year 2010. This provided us an understanding as to how age trends may affect future consumer demand for poinsettias. Table 2 shows actual US household numbers and projections by age of householder for the discriminating age groups shown in our tree diagram (under 35, 35-54, 55-74, etc.).

For the 55-74 age group with the highest poinsettia purchase likelihood (48%), the predicted change in the number of these households through 2010 is a dramatic 32% increase (Table 2). This compares with a 9% increase in US households overall for the same time period. Thus, this large age demographic shift through 2010 will likely have a favorable impact on poinsettia demand by increasing the size of an age group that tends to buy more poinsettias.

For those households where the respondent is aged 35-54 and 75 or older, we predict modest gains in poinsettia demand, as purchase likelihood does not differ from the overall US average, and the gains in households only come from the "75 & Older" age group. For those households where the respondent is under 35, we predict softened poinsettia demand, as their current purchase likelihood is lowest, and the number of households in this age group is predicted to decline slightly through 2010. However, the slight loss in projected demand for this youngest age group will be largely overshadowed by the bigger projected gains in poinsettia demand of the elder segment.

This reporting has presented a model that predicts US household purchase incidence for poinsettias based on key demographic characteristics of consumer households, and how these demographics are projected to change in the future. Age, education level, and income level of the household are key demographic factors that currently drive poinsettia purchase. A large projected rise in the number of householders aged 55-74 in the US over the next decade, combined with a higher poinsettia purchase likelihood for this mature segment, provides the basis for a projected increase in poinsettia market demand.

An assumption made here is that purchasing patterns differ among age groups, and that the generational purchasing patterns of one age group do not carry-over unaltered into older age groups as the population matures. Research with some agricultural products show that the generational effect is small, compared with the age-group effect. Thus, as we age, we change and become more like our parents and grandparents, in tastes, habits and purchasing. However, this assumption has yet to be verified in the US floral industry with long-term studies over decades.

This marketing research also has implications for poinsettia suppliers, growers, and floral retailers. Suppliers and growers are challenged to meet this projected increase in market demand with ample product availability and acceptable product quality. Floral retailers may use the segmentation profiles of poinsettia purchasing to compare with their own market demographics and identify new market opportunities for poinsettias.

About Our Analysis. To identify household demographic characteristics that most influence the incidence of poinsettia purchasing, we performed a "tree segmentation" analysis of our database. This research technique searches through our database to develop a predictive tree diagram that depicts groups of households that have high and low purchasing incidence for poinsettias. The first branch in the tree diagram represents the best predictor demographic characteristic (of all those measured in Table 1) that most distinguishes high and low purchase incidence for poinsettias. The overall group of households is then split on this characteristic, and the analysis repeats itself on the resulting household demographic groups. Subsequent branches in the tree diagrams represent additional predictors of purchasing incidence. All splits and branches in the tree diagrams are statistically significant. In essence, our tree segmentation model identifies the highly significant household demographics that largely predict poinsettia purchase, and reveals the priority sequence of those demographic characteristics.

The five Census regions shown in Table 1 are identified by the following states: Northeast (CT, MA, ME, NH, NJ, NY, PA, RI, VT), North Central or Mid-West (IA, IL, IN, KS, MI, MO, MN, NE, ND, OH, SD, WI), South Atlantic (DC, DE, FL, GA, MD, NC, SC, VA, WV), South Central (AL, AR, KY, LA, MS, OK, TN, TX), and West (AK, AZ, CA, CO, HI, ID, MT, NM, NV, OR, UT, WA, WY).

About the Authors. Drs. Tom and Tim Prince, formerly of The Ohio State University, are brothers and co-founders of Prince & Prince, Inc., a leading marketing research specialist in the floral and green plant industries. Prince & Prince has completed more than 50 major marketing research reports for the floral and floral-related industries in the US, and has also conducted floral marketing research in Canada, the United Kingdom, Holland, and Germany. They conceptualize and implement market studies and product tests for floral and green-plant suppliers, floral importers, wholesale florists, retail florists, and floral-industry associations. For more information about their marketing research and reports for sale, visit their web site at www.FloralMarketResearch.com.

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