Make It Happen Again
Keep your business simple and have a flexible production facility you can easily convert.
December 28, 2009
Every obstacle presents an opportunity. Our industry has taken advantage of opportunities before, and now we have to do it again.
At Christmas, you could see big changes in approach occurring at the major retailers. The major Christmas toy sales started in mid-October, and the major toy stores and mega-chains started selling toys at year-end prices.
Walmart had a Black Friday sale that lasted all day and all night. Brand name toys were selling at $10 apiece, with hundreds of different toys priced in this range.
Kmart advertised layaway plans with little or no interest that attracted many early buyers and also helped them pay for purchases made in October over a three-month period.
If you read any of the business magazines, you’ve realized the large retailers were going to get their product early and sell as much as they could at discount prices. Their goal was to make certain they would sell out quickly so they could generate the cash to restock items as they were needed.
One retailer told me Thanksgiving is just a big meal before the Christmas rush. In addition, some Christmas events − lighting community Christmas trees and holiday parades bringing Santa to the stores − moved to earlier dates. Retailers created events that add to pre-Christmas sales.
Where We Come In
Are we going to be able to take advantage of those new sales approaches? We didn’t this Christmas. Toys had been selling for more than two months as specials, before the first poinsettia ever hit the store. With the newest poinsettia varieties, wouldn’t it have been possible to join the other discount suppliers in developing a system that made them available early and then restocked as needed?
If this marketing system is successful, the next step will be to hurry spring. We are starting to see small steps in that direction. I’m sure with the knowledge and plant material available, we could start selling displays of perennials in early March with the information and proper packaging to make the customer succeed. We have the knowledge to flower more than 500 herbaceous perennials at any time of the year.
The vegetable and herb market is wide open for homegrown and fresh from your home and patio − from early spring through October. For example, I had chives and parsley ready to cut from the end of February until Thanksgiving.
What is the floriculture industry doing to make our product line and our services unique? The best growers learned some time ago what many others have learned since: Every obstacle presents an opportunity to improve one’s condition.
Philosopher Louis L’Amour once said, “There will come a time when you believe everything is finished. That will be the beginning.” You have to adjust to the situation and be able to see what is happening. If you want to stay in the greenhouse business, you have to be fast, frugal and right.
Therefore, you have to keep your business simple and have a lean, flexible production facility that can be converted to grow whatever plants the customers want at the time they want them.
You not only need great production personnel, but great salespeople as well. Don’t wait for the customer to call so you can just take an order. Some growers have salespeople who call their customers every day. They help their customers set up displays and point-of-sales materials.
In fact, I know of one grower who had his sales manager sit in on the planning board of a major retailer to determine what the greenhouse retail area would look like and how they could keep the customer happy and still make the margins and profit they want.
The growers who do all of this extra work for the retailer will have an inside track on getting the lion’s share of the business for the products they sell.
Then & Now
I compare the Great Depression with the depression of 2008-2010. There are direct comparisons between the types of growers and how they responded to the situation then and now.
In the Great Depression, the cut flower growers were in the best economic position and their sales did not suffer greatly. They would say the floriculture industry was depression-proof. The reason they felt that way was because their sales were based on funerals, weddings and special events. They knew people would always die and their services would be needed.
The pot plant growers were not as confident because they relied on the major holidays for most of their sales. They also sold some bedding plants after their geraniums were sold. All plants were grown in clay pots because plastics had not been developed for flower pots or greenhouse coverings.
In the mid-1940s, the field vegetable industry had started to move from the Midwest and Eastern United States to California and the Southwestern states. These field vegetable growers had very small greenhouses and produced some vegetable transplants and even a few flowers.
The field vegetable growers were facing the same situation as the mid-sized growers of today. Because cut flowers, pot plants and foliage plants represented more than 90 percent of the floriculture industry, the field vegetable growers suffered the most from the depression.
Today cut flowers, pot plants and foliage plants represent less than 30 percent of our production, while bedding plants represent the largest part of the market.
Some of our growers today are asking what the cut flower, pot plant and foliage growers started asking in the late 1940s and 1950s. They ask, “What happens if the bottom drops out of our business?”
If you didn’t see what was coming and didn’t develop a sales plan for how to spread your product over a diversity of accounts, you are in big trouble.
You will need a survival plan to sell what you can this year and develop several different strategies for the new year. Otherwise, you will have to downsize your business, attempt to sell it or find other products and uses for your facilities.
There are many other ways to attempt to solve the problem. Perhaps your plan will involve offering discount prices to stores early in the season to help them be competitive.
In today’s market, you have to be prepared in case your customer suddenly bails out on you. Next month, I will share a few ideas of how to avoid or repair the damage when the bottom drops out of your business.
Here is an idea from the great Peter Drucker you might want to think about while you are waiting for next month’s article: Drucker would remind us to have a long-term vision. It is critical to leading – and succeeding – through difficult times.
The reason for a loss of a major customer or any major problem is usually found at the top of the company. Top management needs to be able to read the early warning signs and know how to react to them, making the adjustments that will allow their company to overcome the obstacles and take advantage of the opportunities.
As Kermit the Frog says, “It isn’t easy being green.”
Will Carlson is a Michigan State University emeritus professor who has devoted his career to educating growers. He also had the vision to launch Greenhouse Grower magazine with Dick Meister more than 25 years ago. E-mail him at firstname.lastname@example.org.