👋 Oh, you poor, sweet thing: Tomorrow night is Christmas Eve and you’re still opening business emails?At least pour yourself an eggnog (or, like, an actual good drink) and we’ll regale you with some seasonal economic intrigue, including a motherlode of Father Christmas data.
Note: Our staff is logging off to prepare Santa’s cookies. We’ll see you back here on Dec. 26.
🎧 On the pod:The most under-the-radar stories of 2024.
SEEING GREEN
Who’s cashing in on the multibillion-dollar Christmas tree business?
Sorry to tank your Christmas spirit, but if you weren’t aware of how modern artificial Christmas trees got their start… well, you should know.
In the 1930s, UK-based Addis Brush Co. — a maker of toilet scrubbing brushes — saw an opportunity to market convenience during a time when real trees were hard to acquire.
Last year, 77% of American consumers went the artificial route — and that’s great; it’s always wise to have an extra toilet brush, anyway.
But let’s talk about the real deal
More specifically, let’s talk about tree farms, which supply ~98% of all real Christmas trees on the market.
According to the USDA, there were 16.6k+ of these farms in the US as of 2022.
At any given time, there are 350m Christmas trees growing on these farms in various stages of development — and in a typical year, ~25m will be harvested for sale.
In 2022, consumers were paying a median price of $80 per tree.
So these farmers are all rich, no?
Some Christmas tree farms allow the public to cut down their own trees, but two-thirds of farms operate a wholesale model — they annually cut, ship, and sell millions of trees to independent lots, big-box retailers, and garden centers.
And farmers tend to do pretty well on those deals. A few years back, The Hustle surveyed eight wholesale farms:
The average 6’-7’ tree wholesaled for $35 cut, baled, and loaded.
But after factoring in expenses over the 8- to 10-year growing cycle, profit margins were considerably lower: Farmers typically reported a ~25%-30% profit margin — or $8-$10 per tree.
Even at those margins, a deal with a large retailer like The Home Depot — which might order 250k+ trees — could net a tree farm seven figures.
But who’s the true winner here?
That’d be Big Retail, which typically marks trees up by 100%+ to cover freight, storage, labor, and operating costs.
We’re talking millions of trees sold at a median $80-per-tree price.
Of course, you don’t have to support this mark-up behavior if you don’t want to — but a toilet brush only looks so nice.
PROMPTS FOR PROS
Shining examples of skillful commands
If you keep feeding AI questions, and it keeps churning out crud, then you probably need to up the specificity.
It’s the most wonderful time of the year, unless you’re trying to pay rent on a Santa salary.
The guy is just scraping by, according to Hire Santa’s 2024 report:
The majority of Santas (29%) reported earning $5k-$10k in 2023, followed by the 17% who said they earned $2k or less.
Most (24%) booked a whopping 26-50 gigs, but ~19% worked fewer than 10.
Becoming Mr. Claus is a big investment: 32% spent $501-$1k on the role — including the one to seven suits most own — while 25% spent less than $500 and 15% spent $2k+.
It doesn’t stop professional Santas, though — 31% have assumed the role for 8+ years, including 9% who’ve been at it since before 1990.
SEEING RED
Poinsettias are everywhere right now — but why?
Every year, just after Thanksgiving, a humble Mexican shrub emerges en masse — at nurseries, big-box retailers, fundraisers, and holiday parties.
The poinsettia has become one of the world’s most popular plants, with annual sales of ~90m units and a global retail impact of nearly $1B.
How’d we get here?
Just like you expected: international politics, spoiled trade secrets, and a toppled monopoly. (That’s what you expected, right?)
In short, here’s how the poinsettia’s blood-red bracts became America’s bestselling holiday plant:
Joel Poinsett, the first US minister to Mexico, was jettisoned from Mexico in 1828 over a failed attempt to buy Texas. Before leaving, Poinsett shipped some “flores de Nochebuena” back to the states.
Its American debut was well received, hailed by one newspaper as “the showiest flower to yet be seen” — until people realized it wilted within a few days.
Paul Ecke — son of German immigrant Albert Ecke, whose farm began selling cut poinsettias in the early 1900s — developed, patented, and intensely guarded secret breeding techniques that improved the flower’s durability and aesthetics.
The Ecke family built a booming poinsettia business. By the 1990s, they owned a 90% market share, annually selling 500k+ potted plants, and 25m+ cuttings to other growers.
OK, but that’s a monopoly
Yeah, well, it didn’t last long: In 1992, grad student John Dole reverse-engineered the top-secret Ecke process.
His published findings blew up the poinsettia industry:
Competition flooded in — as did colorful variants with names like “Premium Picasso” and “Monet Twilight.”
Big-box retailers started selling them as $0.99 loss leaders, upending the poinsettia’s reputation as an upscale plant.
More growers entered the market and fought for market share, eventually consolidating under giant agriculture firms.
The Ecke family sold the company to a Dutch conglomerate in 2012.
Don’t feel too bad for Ecke
Today, the business is owned by Dümmen Orange, one of the world’s largest plant breeders, which annually sells ~50m poinsettias — more than half of the world’s supply.
In other words, it’s likely the poinsettias you see at your local Home Depot trace back to Ecke.
Who you should feel bad for: Mexican growers.
A century-old American restriction on importing foreign soil has limited their ability to sell their own native plant to US consumers.
One sign of how those growers feel about poinsettias being patented and controlled by foreign entities: “poinsettismo” is used as a derogatory term to describe a person who is arrogant and intrusive.
SHOWER THOUGHT
You’re officially an adult when it’s no longer hard to fall asleep on Christmas Eve.SOURCE
