Orchids are the fastest-growing group of potted flowering plants in the United States in terms of sales, ranked second behind poinsettia (Euphorbia pulcherrima) among all potted flowering plants. Southern and western states are the main producing regions in the United States, accounting for more than 91% of the wholesale value of orchid production in 2007. According to the U.S. Department of Agriculture (USDA), over the past 10 years, the number of potted orchid production increased 61% from 9.58 million units in 1997 to 15.4 million units in 2007, while the wholesale value of orchids increased 80% from $70 million in 1997 to $126 million in 2007, as shown in Fig. 1. Sales of orchids peaked in 2005 at $139 million and then dropped to $126 million in 2007. Declining sales were due in part to a 70% increase in foreign imports of live orchids since 2005 (USDA, 2007).
Overall demand for orchids has also declined with higher energy and food prices in 2006 (USDA, 2007). Orchid sales per capita declined from $0.47 in 2005 to $0.42 in 2007, while the domestically produced orchid price index increased from 81.4 in 2004 to 89.0 in 2007 (base price of 100 was in year 2000). In the past 10 years, the value of potted orchid imports has risen almost five times, and is projected to continue to grow in the near future. Today, Taiwan is the major orchid supplier to the United States (55%), and has increased their import value 32% from 2005 to $18 million in 2006. This increase is driven by the trade liberalization of the orchid markets with Taiwan, particularly the specifications regarding approved media (USDA, 2006). Other important exporters to the United States include Thailand, the Netherlands, and Canada, with a combined value of $10.3 million (31%) in 2006 (USDA, 2007).
Overall orchid prices exhibited an increasing trend since 1997. The average price of orchids peaked at $9.18 in 2000, and then declined to $7.47 in 2004. Meanwhile, the number of orchid producers has declined since 2002 from 261 to 177 in 2007, but the average sales per producer has increased as shown in Fig. 2. In the long term, prices are expected to stabilize or maybe even decline as a result of increased low-priced foreign supplier competition and larger U.S. growers selling more products to mass merchandising markets (USDA, 2007).
California, Florida, and Hawaii are the major potted orchid producing states in the United States, accounting for 94% of total orchid production. In 2007, California produced about 42% of the U.S. production, with 6.5 million pots, followed by Florida (34%) and Hawaii (18%), with 5.3 million and 2.8 million pots, respectively. Wholesale production values in 2007 were estimated at $56.5 million for California, $41.9 million for Florida, and $16.8 million for Hawaii (USDA, 2007).
The prevailing potted orchid colors produced were single color white, red, and yellow. Other colors and color pattern combinations are available as a result of breeding. Even though statistics of production, sales, and prices for all orchid species are not available on a yearly basis, there is some limited market information available regarding the predominant potted orchid species. Moth orchid (Phalaenopsis spp.) dominates the U.S. orchid market, and accounts for more than 80% of all orchid production value (Griesbach, 2002; Runkle et al., 2005).
The location of Hawaii provides ideal conditions and the perfect natural environment for orchids to grow year round. However, its potted orchid production has remained relatively flat since 2002, due to increasing competition from foreign suppliers and larger domestic producers. Island of Hawaii accounted for 65% of the state's total wholesale value for all orchids (including cut orchids), with $22.2 million in 2006 (Hawaii Department of Agriculture, 2007).
Unlike mainland markets where the predominant orchid is moth orchid, the Hawaiian potted orchid industry is dominated by “other potted orchids,” including boat orchid (Cymbidium spp.), cattleya orchid (Cattleya spp.), lady slipper orchid (Paphiopedilum spp.), and pansy orchid (Miltonia spp.), followed by bamboo orchid (Dendrobium spp.), dancing ladies orchid (Oncidium spp.), and moth orchid. Before 2004, dancing ladies orchid was the largest component in terms of sales for the “other” category of potted orchids and was subsequently separated from this category and reported independently. Dancing ladies orchid sales exceeded $3.7 million in 2007. Hawaiian potted orchid prices have increased gradually in the past decade.
Even though orchids have experienced growth in the last decade, there is very little information concerning orchid markets and consumer preferences for orchid attributes. Several independent garden centers in Hawaii who are also orchid growers were interested in gaining insights into consumer attitudes and preferences for orchids and orchid attributes in the Hawaiian market. The main objective of this article was to analyze consumer preferences for orchids and orchid product attributes in the Hawaiian market. We used conjoint analysis to decompose consumer utility for orchids into its attributes and to weight the importance of each attribute in the purchasing decision. These results can then be used to assess the potential market acceptance of several different orchid products in the Hawaiian market.
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