The Business of Christmas Trees
Exploring the journey of a Christmas tree from minding its own business in a field to sprucing up your living room.
There’s nothing like a tree to celebrate a mid-winter pagan festival. I could do without the turkey and Slade but a twinkling tree is the cornerstone of Christmas. Like everything Christmas related, trees both real and fake are big business. Each year in the UK we get through around 6-8 million1 real ones and Odin knows how many fake ones that were meant to last ‘forever’. Hop on your sled, jingle your bells and let's explore the business of Christmas trees.
Origins
Evergreen trees have served as a mid-winter reminder that the sun does exist and everything is going to be ok for thousands of years. We most likely have the Germans to thank for it becoming a Christmas tradition a few hundred years ago (and more specifically Martin Luther2, that trailblazer of festive fun). Christmas trees really took off in the UK during the 19th century, after a front page splash of Victoria and Albert making merry around a tree, inspired by their German rellies.
The market
There is demand for roughly 6-8 million real trees (costing c.£280m3) annually in the UK with the most popular being the Nordmann Fir4. Around half of these are produced in the UK - as with most products that are created domestically the strength of the pound and supply chains will determine where distributors purchase them from. Generally about 10% are exported.
The supply chain
Christmas tree production follows a fairly standard agricultural model in which there are growers, distributors and consumers. Many growers will look to sell directly to the consumer either through local markets or by setting up ‘cut your own’ operations which turns the whole sale into an experience and therefore demands a higher price whilst cutting out the distributor.
Real vs. Fake
As with many facets of life - fur, body parts, emotions - there is a constant debate about whether fake or real is preferable. From an environmental perspective the debate is quite finely balanced. Yes, the demand for real trees is responsible for the arborcide of tens of millions of trees a year but the resources that go into making the many millions of fake trees have an environmental impact too. The individual environmental impact is largely dependent on how long you keep your fake tree for before casting it aside for another one5. The carbon footprint of both pale in insignificance to that of the energy required to keep it twinkling through the Yuletide period.6
From a brutally economic perspective fake trees make more sense (you only have to buy it once) but as they are about enjoyment (let’s face it you don’t need a tree) you have to take into account the pleasure of a real one. So the moment it feels like a pain in the arse, get a fake one.
Over 80% of fake trees come from Yiwu in China (as do the majority of the world’s Christmas decorations). You can read more about Santa’s real workshop here.
The opportunity
The difference between Christmas trees and say, pumpkins is that they take 7-10 years to grow which means a long time to see a return on your investment. They don’t require a huge amount of attention while they are growing but weather and disease can be a problem. Aside from the serious industrial level growing operations, Christmas trees tend to make up one part of a small holding or farm. You can grow about 1000 trees per acre7 (a football pitch is 1.5 acres for city folk like me) of land. At £30 a pop (could be much higher if you’re selling direct) that’s £30k every seven years or so. You’d therefore need to have several crops on rotation in order to see consistent returns.
Is growing Christmas trees a good get rich quick scheme? No. If however you find yourself with a few acres to spare, perhaps in the grounds of your castle in Scotland, it could be a relatively consistent and low maintenance source of income. Alongside trees, growers often make wreaths which can sell for hundreds of pounds if they’re of high quality and marketed well.
The real opportunity with Christmas trees is no doubt in the distribution. There is an enormous arbitrage (buying in one market and selling in another) opportunity due to the massive difference in the price between rural and urban markets. As trees are so widely available the differentiating factor would be the service provided. At a basic level this is delivering and putting it up but for families with young children this service could really be taken to the next level if they were delivered by elves and Father Christmas turned up to collect Christmas lists. There is really no end to the magical services and peripherals that could be provided.
Conclusion
Real Christmas trees are a luxury product with relatively stable demand. As a luxury product their value lies as much in the enjoyment provided as the intrinsic value of the product itself. The interesting opportunity therefore is maximising the enjoyment of buying a Christmas to provide customers (and more importantly their children) with the ultimate festive experience. If you do happen to have a few acres of land going spare, you could do a lot worse than getting into the festive spirit the whole year round.
https://www.bctga.co.uk/mediapage/Christmas-Tree-Fun-Facts
https://www.history.com/topics/christmas/history-of-christmas-trees
https://www.ft.com/content/928b9f22-b4c9-11e6-961e-a1acd97f622d
https://www.forestryengland.uk/blog/the-experts-guide-choosing-the-right-christmas-tree
https://www.theguardian.com/lifeandstyle/2021/dec/04/real-or-fake-christmas-tree-sustainable-environment
https://www.popularmechanics.com/science/green-tech/a30273590/christmas-carbon-footprint/
http://eprints.hud.ac.uk/id/eprint/27972/1/HarveyGrowing.pdf