The State Of The Young Plant Market
As other segments of the industry consolidate, increasing the reach and power of the remaining players, the Top 20 young plant growers remain stable.
September 12, 2012
When referencing Greenhouse Grower’s Top 100 Growers and Top Cuttings Producers lists from the past few years, it’s easy to see a trend: the big keep getting bigger. In the world of mergers and acquisitions, which Ecke Ranch experienced recently (see page 8), the big players have been “collecting” other companies in an effort to increase their production and broaden their reach in the market.
The Big Are Staying Flat
One segment of the industry that has seemed relatively immune to this phenomenon is young plants. Most of the same growers from the 2011 list have claimed spots on the list again this year, and overall, the production reported by the Top 20 was essentially flat year over year. Six operations on the 2012 list have reported growth, led by two new companies to the ranking. Jolly Farmer and Welby Gardens Co. claimed spots 15 and
The six that grew, however, were balanced by five companies that reported decreases in production. Even Tagawa Growers and Ball Tagawa Growers — number one on this year’s list — experienced a 25 million unit dip in the number of young plants produced. This wasn’t enough to knock the young plant giant off its throne at the top with 425 million units. All told, the Top 20 reported an increase of just 15.5 million units produced for sale.
Overproduction Is An Issue
When reporting their biggest challenges, growers mentioned a variety of issues that could affect profitability. Bruce Gibson of Northwest Horticulture names the competitive market as his operation’s largest problem. Zylstra’s Steve Zylstra and C. Raker & Sons’ Paul Karlovich contend that young plants have become commodities in the market and are looking to niche markets or other segments of the industry to remain competitive.
Even the slight uptick of 15.5 million units produced in 2012 by the Top 20 young plant growers is not necessarily good news.
“We are in a state of overproduction in our industry, and therefore, we are constantly facing pricing challenges,” says Bill Swanekamp of Kube-Pak. “The long-term solution is less production.”
Overproduction is potentially a more widespread, albeit not obvious, issue, as another commonly stated problem was the absence of a crystal ball to predict market changes and broker demand prior to the growing season. As with any market, better anticipation of these variables would allow young plant growers to become leaner, more profitable operations in the future.
Success With Order Fulfillment
Growers are continuing to refine their ability to deliver high-quality stock to customers on time. Of the young plant growers who answered the survey used to determine rank and assess the overall trends of the market, all but two growers filled 99 to 96 percent of their orders without substitutions.
Most operations surveyed also have incentives for early orders, systems in place to fill late orders or additional stock of the most popular varieties to combat common conundrums that may affect order fulfillment. The use of multiple shipping methods also ensure fewer shipping errors and just-in-time service.
Only a handful of growers reported delaying or not fulfilling late orders. Add to this that the majority of growers report 80 to 95 percent success rate
with respect to seed germination, and it appears that growers overall have done a good job meeting their customers’ needs.
|2012 Rank||Young Plant Grower||2011 Rank||2011 Units Produced To Sell||Units Vs. 2010||State|
|1||Tagawa Greenhouses & Ball Tagawa Growers||1||425 million||down||CO|
|2||Van de Wetering Greenhouses||2||305 million||up||NY|
|3||Green Circle Growers||3||260 million||same||OH|
|4||Plug Connection||5||165-170 million||down||CA|
|5||Floral Plant Growers||9||164-165 million||up||WI|
|6t||Knox Nursery||7t||150 million||same||FL|
|6t||Wagner Greenhouses||7t||150 million||same||MN|
|9||C. Raker & Sons||6||140 million||down||MI|
|10||Bob’s Market & Greenhouses||10||128.5 million||up||WV|
|11||ForemostCo Inc.||11t||120 million||same||FL|
|12||Battlefield Farms||13||113 million||same||VA|
|13||Plainview Growers||14||100-105 million||same||NJ|
|15||Jolly Farmer||98 million||up||Canada|
|16||Aris Horticulture||15||80 million*||same||OH|
|17||Cal Seedling||16||76 million||up||CA|
|18||Welby Gardens Co.||50-75 million||up||CO|
|19||Van Wingerden Greenhouses||17||55 million||same||WA|
|20t||First Step Greenhouses||19t||50 million*||same||CA|
|20t||Wenke/Sunbelt Greenhouses||19t||50 million||same||MI|