Don’t You Just Hate Those Big Boxes?

Don't You Just Hate Those Big Boxes?

It is clear to me that consumers are willing to open their wallets only when they feel we bring them good value and continually introduce new and interesting products that increase their chances of success. Whether consumers are shopping at big box stores or a local nursery with just one location, our goal should be to keep them buying more and make them more successful while bringing a new generation into the world of outdoor living.

Some members of the industry like to degrade the big boxes as less-than-legitimate purveyors of green goods. Some have not been able to see the evolution of the industry as a positive and would be happy if we returned to the days of limited distribution and little to no price competition. The big boxes admittedly have brought major changes to the industry that have changed the way we all do business. Let’s not forget they have also brought tremendous growth that would not have been conceivable or possible without them.

The three significant national retailers–Home Depot, Lowe’s and Walmart–have made unbelievable contributions to the growth of the industry through major store expansion that included new selling space for green goods. On the other hand, there has been little expansion among independent garden centers (IGC)–the bulk of which are single-location retailers.

Clearly, there are many opportunities for the IGC segment, some of whom are the greatest retailers in the country (i.e. Armstrong, Pike, Homestead, Lukas, Bordine’s), but the reality is the big boxes overwhelmingly outnumber and outsell the IGC group.

The Good & The Bad

In 2009, Home Depot, Lowe’s and Walmart had a combined 7,378 stores. Let’s say the average green goods selling space in those 7,378 stores averages 10,000 square feet per unit–a very conservative number that would equate to 73,780,000 square feet (1,696 acres) of selling space for this industry’s products. So why would we not love these guys?

The obvious answer is they brought significant change to the industry and created a much higher level of accountability that frankly did not exist prior to their entry. Now, let’s examine the changes that have occurred driven by the national retailers, divided into two categories: 1) changes the industry likes; and 2) changes the industry doesn’t like.

Among the changes the industry likes are that the big boxes increased the demand to unprecedented volumes along with increasing the vendor’s cash flow because they paid faster. Big boxes also made the industry have a better understanding of retail, created a closer consumer connection and caused a revolution in packaging.

Among the changes the industry doesn’t like: Big boxes demanded better prices, made their vendors accountable, made many decisions the grower used to make, demanded a more diverse product portfolio and insisted on accurate labeling, including UPC. Big boxes also instituted non-performance penalties, along with pay by scan, which changed the way greenhouses are managed.

Because of the changing requirements, cost of production became an industry concern. In the 1970s, Aart Van Wingerden understood the need for low-cost production and started selling greenhouses that could lead to lower costs. Many growers bought into his system and endorsed his philosophy. Van Wingerden is, in my mind, the greatest visionary the industry has ever seen. He understood how to satisfy the appetites of these national retailers while doing it profitably.

A Different Perspective

Today, these large retailers continue to provide us with a growth in retail space by adding new stores every year. We can almost be certain without looking at the numbers that 40 or 50 new garden centers will be built every year. So why should some industry members rant and rave about what they consider a negative impact? This industry would be at least 50 percent smaller without the impact of the national retailers, and the consumer would be paying twice as much for green goods.

We hear comments like “the plants at the big boxes are poor quality” or “the prices are too cheap, the grower can’t make money.” It is impossible to imagine a buyer telling a grower: “I don’t care what the plants look like, you just have to meet my price needs.”

The buyers aren’t judged on the buy; they are judged on the sell–gross margins same store sales and GMROI. If there are inferior plants in a big box garden center, it is the result of the vendor–not the retailer–and if the product quality causes a decrease in sales or an increase in discards, then that vendor will, in the long run, not be serving that retailer.

In the 2,000-plus stores I’ve visited, I have seen varying levels of product quality that is the result of vendor performance in production, distribution and merchandising. All retailers want to deliver value, and they don’t mean low prices coupled with bad merchandise. Understanding the role of the vendor is crucial to the success of any company choosing to do business with the large national retailers.

As we are clearly in the era of “retailer in charge,” some companies have figured it out and manage their business to satisfy their customers. And they do it very profitably. Although there are those who chide the national retailers, there is a sizable group that loves them because they are making a lot of money serving them.

Leave a Reply

4 comments on “Don’t You Just Hate Those Big Boxes?

  1. Jerry, you nailed it. Along with Don Blume’s interview and Alan Armatage’s insightful analysis on Carol Barton’s comments on brands I think this issue of GG was among the best ever on relating the state of the industry. I think it is a great thing that this industry gets together as often and as openly as they do to share what is going on. I am so pleased to have events like OFA and the Seeley conference and others where we can come together and share. Thank you all.

  2. Thank you for writing this article! As someone who works for a wholesale grower who sells mostly to big box stores, it’s nice to finally have someone talk positive about them instead of looking at them like they are some sort of plague. So much of the product sent into these stores straight from the grower is some of the best quality even compared to some of the independents. The difference is it is then the individual stores responsbility to care for the product. Thats why some stores look great and others trashy. Some management love their garden centers and others could care less they have one. That’s the difficulty for me, to see what I know is a good quality product not be watered in 100 degree water for days because someone just called in sick. It’s embarassing to us a grower as well to see our product look poorly in stores.

  3. Jerry, you nailed it. Along with Don Blume’s interview and Alan Armatage’s insightful analysis on Carol Barton’s comments on brands I think this issue of GG was among the best ever on relating the state of the industry. I think it is a great thing that this industry gets together as often and as openly as they do to share what is going on. I am so pleased to have events like OFA and the Seeley conference and others where we can come together and share. Thank you all.

  4. Thank you for writing this article! As someone who works for a wholesale grower who sells mostly to big box stores, it’s nice to finally have someone talk positive about them instead of looking at them like they are some sort of plague. So much of the product sent into these stores straight from the grower is some of the best quality even compared to some of the independents. The difference is it is then the individual stores responsbility to care for the product. Thats why some stores look great and others trashy. Some management love their garden centers and others could care less they have one. That’s the difficulty for me, to see what I know is a good quality product not be watered in 100 degree water for days because someone just called in sick. It’s embarassing to us a grower as well to see our product look poorly in stores.

More From Finance/Operations...
Sheridan Nurseries

September 3, 2015

Greenhouse Grower’s 2015 Operation Of The Year Sheridan Nurseries Raises The Bar

Ontario-based Sheridan Nurseries has long been an innovator in the Canadian market, but during the economic downturn, CEO Karl Stensson says the company decided to take things a step further. “We have survived the Great Depression, two World Wars and many other downturns in the economy,” he says. “During this last recession, our staff set out at being the best at what we do.” The company’s efforts have paid off. Sheridan Nurseries was named Operation of the Year at Greenhouse Grower’s Evening of Excellence, held July 13, at Cultivate’15 in Columbus, Ohio. The company was also awarded for Excellence In Perennials Production, based on its reputation for plant quality and the activities the nursery has led and been a part of, both within its company and in the industry at large. “We are elated and proud of our staff accomplishments,” says CEO Karl Stensson. “Over the last five years, we […]

Read More

September 3, 2015

Legalization Of Marijuana In California A Strong Possibility

The push for the legalization of recreational marijuana intensifies in California as proponents promote the crop’s agricultural and economical benefits.

Read More
More and more people are employing a landscape service, but that doesn’t mean they don’t still garden

September 2, 2015

Under Siege? Not Really, Just Go For A Walk

I have no trouble with people buying chocolates or wine instead of flowers to celebrate anniversaries, birthdays or peoples’ lives. We should all have choices. However, the other night I felt like I was entering the Republican caucus. I was minding my own business by the television set and became more than a little upset. A website called insteadofflowers.com came on the screen. It provided serene music and wholesome images of busy women doing busy things. It turns out that such busy women enjoy a small token of appreciation, but apparently their enjoyment, according to the voice-over, does not include flowers. This website delivers meals to the house, anything from beef brisket to beef bourguignon. It is a fine website with a good idea. But why pick on us? Why not use “insteadofbaloneysandwiches.com” or “insteadofgrilledcheeseandsoup.com,” “insteadofburgerdoodle.com,” or a dozen other things. When did flowers get to be the whipping boy? […]

Read More
Latest Stories

September 2, 2015

Delegation Is Key To A Successful Greenhouse Operation

In a packed room at Cultivate’15, speaker Bernie Erven presented key steps growers need to take to improve their delegation skills, the benefits of delegating and the dangers of not learning how to delegate. This is a skill, he says, that everyone needs to learn. “For all of you who are part of a family business, you are choosing not to do things the easy way,” Erven laughed, as he presented a list of ways to know whether or not you’re an effective delegator. The owner of Erven HR Services, LLC, Erven has been working with and observing family businesses for many years. In his presentation, he said, he didn’t share anything that he hasn’t seen first-hand. You might not be a good delegator if you: Tend to be a perfectionist Work more hours than anyone else Lack time to explain clearly and concisely Are often interrupted Enjoy what you used to […]

Read More
AmericanHort logo

August 20, 2015

David Savoia To Serve As AmericanHort’s Interim P…

Following Michael Geary’s announcement that he has resigned as president and CEO of AmericanHort, the association has announced that CFO and Senior Vice President for Operations David Savoia will serve as interim president and CEO while the board conducts a search for a new staff executive. Craig Regelbrugge, the senior vice president for advocacy and research, will support Savoia with the association’s external affairs. Geary announced August 12  that he will be leaving his position after September 30 to serve as CEO of the Society for Marketing Professional Services, an organization dedicated to creating business opportunities in the architecture, engineering and construction industries. “As some of you know, I grew up connected to the horticulture industry so this was not an easy decision for me,” Geary said in an eMail. “I have loved working with our organizations and our talented members, staff and partners. However, my choice to return full time to Washington, D.C. will allow me […]

Read More
Geary-Michael

August 18, 2015

Michael Geary Is Leaving AmericanHort

AmericanHort president and CEO Michael Geary announced last Wednesday that he will be leaving his position at the end of September to serve as CEO of the Society for Marketing Professional Services. “I am writing to share with you that on October 8 I will begin a new professional chapter as CEO of the Society for Marketing Professional Services, an organization dedicated to creating business opportunities in the architecture, engineering and construction industries,” Geary said in an email. His last day with AmericanHort will be Sept. 30, 2015. “As some of you know, I grew up connected to the horticulture industry so this was not an easy decision for me,” he said. “I have loved working with our organizations and our talented members, staff and partners. However, my choice to return full time to Washington, D.C. will allow me to be closer to my family and aging parents and to re-engage with another industry […]

Read More

August 15, 2015

Ball Horticultural Co. Buys Conard-Pyle/Star Roses And …

Ball Horticultural Co. plans to add Conard-Pyle/Star Roses and Plants to its family of breeding and distribution companies, according to a press release dated August 14, which announced the company’s recent acquisition of the famous introducer of Knock Out Roses and other perennials and woody plants to the market. Ball plans to capitalize on the expertise of its Ball Ornamentals woody ornamentals division, as well as Conard-Pyle’s market-leading position as a top rose breeder to strengthen its product line. The sale is scheduled to close by the end of September 2015. Conard-Pyle’s in-house breeding division NovaFlora, along with its intellectual properties and the distribution, production and administration facilities of its wholesale division are also part of the acquisition. NovaFlora is the driving force behind the Star Roses and Plants brand. “Conard-Pyle has been the leader in roses in its market and has been actively diversifying its offering with other woody […]

Read More
cannabis, marijuana plant

August 7, 2015

Big Banks A Step Closer To Financing Cannabis — Or Not

A key Senate Appropriations Committee passed a bill on July 23 that allows the nation's capital to establish regulated medical marijuana stores and lets banks provide financial services to state legalized marijuana dispensaries.

Read More

July 30, 2015

Spread Your Risk Beyond Spring Sales [Opinion]

Growers who participated in Greenhouse Grower’s 2015 Spring Crops Recap Survey said they have had enough of the uncertainty that the weather brings. They said it’s time to build up sales in other seasons like fall so we’re not so dependent on spring. As a couple of wholesale growers, both from the Southeast, very eloquently stated, our industry has mastered squeezing everything we can out of the spring season. And while this year happened to be a very successful one, thanks to the improving economy and elevated consumer confidence, they said, “now is no time to celebrate.” “Spring is still Christmas in the horticulture industry, but we have done such a good job focusing on spring that we have neglected other seasons,” one grower said. “Having so many eggs in the spring basket is dangerous. Fall will never be what spring is, but having a solid second season is in […]

Read More
Berns_Roberto Lopez_Purdue6

July 22, 2015

Cultivate’15 Greenhouse Learning Tour Showcases G…

Growers took advantage of the Greenhouse Learning tour held Saturday, July 11 at Cultivate'15 to see the strategies and technology two successful growing operations are using to tackle production challenges and come out ahead of the game.

Read More
thermoflor

June 16, 2015

Philip Schaafsma To Represent Thermoflor In The U.S.

Philip Schaafsma is a new sales representative for Thermoflor, a company with a lot of experience building garden centers worldwide. The history of the Dutch construction company Thermoflor goes all the way back to 1877. Since then, the company has been through a lot of changes, from simple conservatories to complex glass and steel turnkey projects. With a new sales representative, Thermoflor is well equipped to service the American market. Previously, Petitti Garden Center (Avon, Ohio), Chuck Hafner (Syracuse, N.Y.), Jacob’s Garden (Ottowa Lake, Mich.), Hicks Nurseries (Westbury, N.Y.) and Holes (Alberta, Ca.) were all built by Thermoflor. After a period of absence, the company is now  represented in the U.S. and Canada by Schaafsma, who has more than 40 years of experience in retail lawn and garden, greenhouse growing and the floral industry, and is a former board member of the Garden Centers of America. Schaafsma is the former owner […]

Read More

June 15, 2015

Hortica Insurance To Become Member Of Sentry Insurance …

Upon completion and approval of an affiliation agreement, Hortica Insurance (Florists' Mutual Insurance Company) will become a member of the Sentry Insurance Group, based in Stevens Point, Wis. As a member of the Sentry Insurance Group, Hortica keeps its name and brand and will continue doing business from its current headquarters in Edwardsville, Ill.

Read More
Cal-Poly fields

June 2, 2015

Cal-Poly Students Seek Continued Industry Support To Sa…

Agriculture students and faculty at California Polytechnic State University, San Luis Obispo, want industry members to continue to stand with them in their effort to preserve Class 1 agricultural land from being repurposed. The university recently released an update to its Master Plan that indicates that almost all of its orchards, horticulture facilities and field sites could be repurposed for buildings, including residential and/or recreational space. According to Joel Leonard of Students For Agriculture, an organization of Cal-Poly students in favor of saving the land, the Master Planning Committee will be meeting over the summer to form a final version of its plan and present it once more to the public in the fall, before it is submitted for final approval to the California Board of Trustees. Students For Agriculture’s goal in the meantime is to increase awareness and rally industry supporters to continue to send their input to the planning committee. Visit studentsforag.com to see more […]

Read More
Cal-Poly fields

May 27, 2015

Cal-Poly Students And Faculty Ask Industry To Help Save…

California Polytechnic State University, San Luis Obispo, has released an update to its Master Plan that indicates that almost all of its orchards, horticulture facilities and field sites could be repurposed for buildings, including residential, and/or recreational space. According to a letter from Scott Steinmaus, the horticulture and crop science department head, the proposed changes directly affect the current orchard plantings and other long term plans for the department. The department is committed to making sure that its facilities remain invaluable teaching environments that enable its students to learn about crop, fruit and horticulture production, food safety and pest protection, in addition to providing sites for externally funded research projects that benefit the industry. Industry members are invited to submit comments to the university. According to Steinmaus, a recent eMail to the Cal-Poly community from the university president indicates that all of the input gathered through the end of May will be studied by the planning […]

Read More
people-of-Battlefield

May 13, 2015

Battlefield Farms Receives MPS-A Qualification

Battlefield Farms, Inc., in Rapidan, Va., has been awarded the MPS-A qualification after becoming a participant for MPS-ABC in 2010. After four years of showing effort and improvement, the company has been awarded the qualification.

Read More
Barry_Sturdivant_columnpic

May 8, 2015

How To Survive Succession Planning And Resolve Conflic…

If you work in agriculture, you most likely work with family-owned businesses. This is especially true within the greenhouse industry. I’m fortunate to work for a company that specializes in financing and supporting such businesses. Family-owned businesses often have a level of commitment and support that helps during lean times. This is important for a company exposed to seasonality and events that are sometimes beyond management’s control. Business owners and management are constantly looking for solutions to the unique issues faced by these small but complex businesses. Specifically, how these issues affect the transition from one generation to the next. There are many family enterprise success stories, cases of harmony, health and longevity. Yet it’s no secret that family businesses can struggle with governance, leadership transitions and even survival. According to the Family Business Institute, only 30 percent of family businesses last into the second generation, 12 percent remain viable […]

Read More

April 30, 2015

North Creek Nurseries Welcomes Nikki Drake As New Finan…

Nikki Drake will fill the role of new financial administrator at North Creek Nurseries, with responsibility for the accounting department. She will also serve on the strategic planning committee.

Read More
Andy Huntington Pleasant View

April 29, 2015

Pleasant View Gardens Promotes Andy Huntington to Natio…

Pleasant View Gardens recently announced that Andy Huntington will be the company’s National Sales Manager. Huntington, who has years of horticulture industry experience, will oversee national territory and inside sales departments, while fostering strong partnerships with customers. “Our relationships with customers are central to all that we do at Pleasant View,” Huntington says. “In my new role, I am excited to work with a broader base of broker, grower and retail partners to understand their business needs. Pleasant View’s goal is to be so in tune with our customers that we are able to anticipate their problems before they arise.” Huntington has a history of growing sales and forming long-lasting relationships with a diverse customer base. For the past two years, he has been working as a territory account manager for Pleasant View Gardens, responsible for young plant liner sales in New England and New York. Prior to that, Huntington was […]

Read More
PittMoss on Shark Tank

April 22, 2015

PittMoss Wins On Shark Tank

Mont Handley, president and CEO of PittMoss, appeared on ABC’s Shark Tank on April 17 to try to get the “sharks” to invest in his peat moss alternative. Three investors from the TV show contributed $600,000 to PittMoss for a 35 percent stake in the company. Check out this clip from ABC’s website in which Mark Cuban, Kevin O’Leary and Robert Herjavec discuss getting on board with the product. PittMoss is an alternative to sphagnum peat moss, made up of a mix of proprietary additives and recycled paper rescued from landfill space. Handley founded the Pittsburgh-based company in 1994. What started as a small experiment grew into a full-fledged business with the help of funding provided by an EPA SBIR grant and Pittsburgh’s Idea Foundry. Today, PittMoss is available to commercial greenhouses and nurseries from Michigan to Maine to North Carolina, with plans to grow. To learn more, visit PittMoss’ website, or check it […]

Read More
Syngenta logo

April 15, 2015

Syngenta Names Chris Freeman Senior Key Account Manager…

Chris Freeman is the new senior key account manager for Syngenta Flowers, Home & Garden's Commercial Sales business in the Americas, effective March 2015. Freeman, who joined Syngenta in 2006, carries more than 25 years of experience in the agriculture and floriculture business.

Read More
Lake Buchanan_LCRA

April 10, 2015

USDA Designates Areas Of West And Southwest As Drought …

The ongoing drought has resulted in disaster area designations in counties across nine Western and Southwestern states, including Texas, where some reservoirs are at or near historically low levels.

Read More