When It Counts Most, Be Bullish
Subtle purchasing changes make more sense than drastic ones.
January 16, 2009
What's the mood out there?
It's a question I've tried to incorporate into every dialogue I've had about our industry over the last few months. Recently, I posed a version of the question to a handful of hard and live goods brokers with hopes of drawing conclusions about the upcoming spring season and the state of our industry at the distribution level. Here's what I concluded:
- Growers are taking conservative approaches to buying because of carryover and credit concerns.
- In some cases, growers are waiting until the very last minute to make purchases, which could put a rift in their production schedules.
- Low-cost production and effective selling are, however, still the driving factors of profitability, and some growers are making buying decisions based on their view of 2009 as a course-correction year.
At its core, our industry is no different than most others. Business management decisions are made because of changing markets. But perhaps our industry jumps to more extreme conclusions about its own market than others, even when subtle buying changes are more appropriate than vast ones.
"As an industry, we have a tendency to swing the pendulum way too far," says Dave Watt of Express Seed. "If we're following up a good year, then we swing the pendulum too far the good way."
The same could explain why some 2009 orders have yet to be processed among the various brokers. I understand the conservative approach and realize this spring has a make-or-break feel for many growers. But rather than delay or cut back on orders entirely, growers should be hunting for better ideas and better people to work with at the same time.
Now is not the time to settle with your situation because it's all you've known for the past five, 10 or 15 years. Growers should continuously be seeking improvement with their purchases and in all other areas of their business. There are opportunities to save by making better plant selections and exploring automation and technology. Just ask around - check with your brokers - and you might find ideas that make more business sense.
As I wrote last month, 2009 can be better than 2008. So let's hope, as always, for good weather and that those who might have cut back on orders didn't plan heavy enough for spring.
A Glance Back On Poinsettia Season
One factor in altered spring buying decisions was undoubtedly the outcome of poinsettia season, which wasn't the best marketing expert Jerry Montgomery has seen. He visited big box and independent garden centers throughout the United States during poinsettia season and concluded that retailers are focusing more than ever on reducing discard rates and increasing gross profit to make the category a profitable one. Be sure to check out his assessments and suggestions for improvement at www.GreenhouseGrower.com, where you can search for Montgomery.