Return on investment (ROI) might not be the most thrilling part of greenhouse management, but it’s a critical one. Every new piece of equipment, no matter how innovative, needs to earn its keep. While calculating basic ROI is a task fit for any accounting student, in a greenhouse setting, the true value of a tech investment often goes far beyond the numbers on a spreadsheet. We spoke with growers and industry experts to better understand how they approach ROI when evaluating or recommending new technology.
“It definitely starts with economics and finances,” says Jeff Stoven, Propagation Manager at Bailey Nurseries. “But once you move beyond basic finances, we also look at metrics related to labor, quality, consistency, availability, opportunity, and resource distribution. All these factors shape how we view ROI.”
How Timeline Matters (or Doesn’t)
Ask any grower about ROI, and you’ll likely hear the same benchmark: three to five years. It’s a common target in the industry.
“Growers are fairly frugal, and three to five years is a timeframe you hear a lot,” says Taylor Readyhough, Regional Sales Manager for the Northeast at BioTherm Solutions. But that three-to-five-year window can be limiting, especially for infrastructure investments.
Readyhough notes a growing trend of new owner-operators taking over existing facilities or younger family members stepping into leadership roles. These older sites often require major upgrades to stay competitive, and those decisions shouldn’t be based solely on short-term ROI. “Infrastructure improvements that are critical to the operation might have a six-to-eight-year payback, but that’s not a bad thing,” says Readyhough. “The right piece of equipment may take longer to pay off, but it could last 20 to 30 years. A six-to-eight-year payback on a 20-year system means you’ve got 12 years in the black.”
Still, there’s more to the decision than a fixed number of months. “I help justify project elements when we build the business case – why we’re making the investment and what outcomes we expect to achieve,” says Stoven. “If the payback period is longer, there needs to be additional factors that support the project.”
Stoven notes that secondary benefits can help push a project forward, even if the ROI timeline stretches beyond the typical target. “Those secondary benefits become especially important,” he says. “At Bailey’s, these factors are given significant consideration. If an investment doesn’t fall within the typical three-to-five-year payback window, it isn’t automatically dismissed. If the case can clearly be made that it addresses a safety issue, a worker quality issue, or an opportunity issue, those considerations are weighed just as heavily as the financial ones.”
Of course, those dollars going out still need to come back – ideally with some friends. “ROI is a primary motivator for Freeman’s investment in automation and technology,” says Adam Derkacz, Production Analyst at Freeman Herbs. He explains that any investment in new equipment should deliver clear benefits to core business functions, including quality, consistency, and throughput. “Even less tangible benefits should be modeled and included in the payback calculation,” he adds. “Every investment is competing for the same dollars as other potential projects, so we aim to keep our payback periods under three years.”
Automation and technological upgrades that reduce energy use and labor demands often deliver the greatest ROI. Energy pricing, and how much of it you use, can significantly influence calculations. And while high upfront costs can be intimidating, longer-term ROI projects are often worth it, especially in the face of rising energy costs and shrinking margins. “Unfortunately, I have seen some large, multigenerational greenhouse operations fail because they didn’t invest in infrastructure,” says Jim Rearden, CEO at BioTherm Solutions. “The industry is full of these stories. Every few years, a well-known name shuts down – not because they didn’t buy a transplanter, but because they were using 45% more energy than everyone else and couldn’t stay profitable.” Avoiding infrastructure upgrades due to longer ROI timelines can lead to serious consequences down the line. Rearden has seen this scenario unfold in large, multigenerational operations, often too late to recover. “Eventually, someone asks, ‘Have you looked at the books this week?’” he says. “Pretty soon, they’re in a financial hole they can’t climb out of, and by then, they can’t secure the financing needed to replace all the outdated equipment.”
Secondary Benefits to Include in ROI Considerations
While Jerry Maguire may have shouted, “Show me the money!” back in 1996, today’s ROI conversations go far beyond the bottom line. “ROI can be defined in many ways,” says Stoven. “It’s not just financial – it’s economic. And that includes metrics like safety, worker satisfaction, productivity, and efficiency.”
Opportunity cost also plays a major role in ROI. When evaluating automation, it’s worth asking: What’s the cost of not automating? And what could your team accomplish if key tasks required fewer hands? “We recognize we have a finite number of people,” says Stoven. “If I can reduce staffing needs for a task, say by two per shift, and reassign them to higher-value work elsewhere, that’s a big deal. Ultimately, it all comes back to labor and resource allocation.”
As a former greenhouse operator, Readyhough knows that many secondary benefits still impact the bottom line – often through a stronger, more uniform crop.” Improved climate control leads to more consistent crops, which simplifies labor,” he explains. “With uniform growth, you may need to spray and sort less. If all your plants reach the same height at the same time, you can ship them all at once instead of breaking them into multiple batches. That kind of consistency has a major impact on profitability.” Both Stoven and Readyhough emphasized the value of automated climate systems. While the ROI may show up as energy savings or more uniform crops, there’s another important benefit: quality of life. “To me, this is the tertiary benefit of investing in yourself and your business,” says Readyhough. “It’s about improving employee well-being and satisfaction and giving them a life outside of constantly responding to alarms.”
Derkacz mentions that non-monetary benefits are also part of the ROI conversation at Freeman Herbs. “There are definitely non-financial factors to consider when investing in automation and technology,” he says. “Many of these – like crop uniformity or the opportunity cost of poor quality – can be modeled and factored into ROI calculations.” But some benefits are harder to quantify. “One of the most difficult to measure is the value of exploring underutilized or emerging technologies, and staying ahead of the curve,” Derkacz adds. “Sometimes, you just want a really cool robot.”
Business Relationships Matter
The lowest quote isn’t always the best deal, especially since ROI is viewed through a broader lens. For many growers, strong vendor relationships are just as important as cost.
“We put everything out for bid, review the quotes, and also consider the potential for long-term relationships,” says Stoven. He evaluates not just pricing, but also post-sale support, shared vision, and whether vendors align with the nursery’s values and goals. “We talk a lot about service, reliability, and parts maintenance, because these systems aren’t plug-and-play,” he adds. “The kind of technology we’re investing in requires training, updates, and ongoing service. ROI matters, but we also need partners who can support us long after the purchase is made.”
Andy Wilcox is a flower farmer and freelance writer with a passion for soil health, small producers, forestry, and horticulture. He and his partner run Stone’s Throw Flowers, providing cut flower arrangements to retail and wholesale customers. Andy is an active member of the Farmer Veteran Coalition of Wisconsin.