While we've focused historically on dealers selling products for the building envelope--lumber, doors, windows, siding, and such--what's happening in outdoor living also merits attention, both for what's going on and where this sector might be headed.
Our associates at Webb Analytics created the maps at right showing more than 330 locations of landscaping and related firms since 2018 by just three companies: SRS Acquisition's Heritage Landscape Supply Group (red pins in top map), SiteOne Landscape Supply (black pins in middle map), and Outdoor Living Supply (blue pins in bottom map).
SiteOne has been at it for more than 20 years, but it really ramped up after going public in 2016. Since 2018, it has bought 53 companies that control 153 locations. Heritage launched in January 2019 and has since made at least 22 acquisitions, netting it 125 stores. It also has opened 17 greenfield locations. Outdoor Living Supply was created in late 2020. It has made eight purchases of 18 facilities and opened one yard.
When SRS launched Heritage, President and CEO Dan Tinker described landscaping as a category ripe for rollups. SiteOne describes it as "highly fragmented, consisting primarily of regional private businesses that typically have a small geographic footprint, a limited product offering, and limited supplier relationships." SiteOne estimates sales by all wholesale landscape suppliers totaled $23 billion in 2021. SiteOne's sales reached $2.36 billion that year, and for 2022 the publicly traded firm is on track to go well above $3.8 billion. Both SRS and Outdoor Living Supply are privately held.
The landscape category's current products list includes not just hardscapes like stone, concrete pavers, and tile, but also lots of items linked to gardens: irrigation, nursery items, fertilizer, mulch, and such. But Tinker and others see landscape supply outlets as a place to sell even more items linked to outdoor living, such as grills and lights. One potentially big addition is decking materials.
SRS also sees synergy in landscaping, because many of the hardscapes it sells also can find a home in the 93 stores that are part of the company's Heritage Pool Supply Group. That division was launched in August 2021.
Versatility helps make landscaping stores attractive to investors. Their products appeal to residential and commercial contractors involved in new construction, remodeling, and maintenance/repair. Thus, their revenues are likely to be less volatile than those of dealers that focus on one industry segment.