Light At The End Of The Tunnel

Even though the first estimate of the year’s first-quarter gross domestic product (GDP) shows overall economic growth contracting 6.1 percent, the latest BEA report contained good news for economic prospects later this year.

Businesses dumped $104 billion in inventories, compared to reductions of less than $30 billion in each of the previous two quarters. That means companies will need to stop laying off workers and start producing goods again in order to meet even a modest uptick in demand.

Most economists expect gross domestic product to contract 1.4 percent at a seasonally adjusted annualized pace in the second quarter of 2009, compared with the 6.1 percent drop recorded in the first quarter. Slow, but positive, growth is expected to return by the third quarter, with the economy expanding more than 2 percent in the first half of 2010.

One bright spot in today’s economy is consumers seem to be spending again. Consumer spending rose a respectable 2.2 percent in the first quarter after respectively dropping 3.8 and 4.3 percent in the third and fourth quarters of 2008. Sales of other entertainment luxury goods (e.g. books, music, restaurants) have been increasing this spring, which bodes well for the sale of floricultural products, as well.

The Housing Market

There are also some glimmers of hope in the housing market although sales, starts and prices will still likely be down this year. Low mortgage rates and falling prices are luring more buyers. Sales of foreclosed homes are brisk in many parts of the country, indicating buyers are willing to make a deal for a good value. All indications still point to home sales bottoming out around mid-2009. However, surging job losses in certain regions of the country will keep many potential home buyers on the sidelines and result in more foreclosures, keeping downward pressure on builders. Housing starts likely won’t hit a bottom until the end of this year.

On the home improvement side, the economic pressures on consumers remain intense and bigger-ticket projects continue to be postponed as wary home improvement consumers watch the economic climate and housing market dynamics very closely. As spring arrived, we saw relative strength in smaller-sized, outdoor projects, meaning more bedding plants were purchased.

The best indicator that things may be coming around is the consumer confidence index. It has been said before that all economic crises are crises of confidence. With those indicators improving as they have in recent weeks, it adds credence to a late-2009 turnaround. But bear in mind economic recovery coming out of this downturn will be much slower and more restrained than in previous cycles. Therefore, growers should plan on a recovery that is not as strong as past recoveries. Yes, we will rebound (and we will return to normal growth rates), but it will take a while to get back to where we would have been absent the recession.

Marketing Value

After my last column (“Value Never Needs A Stimulus”), I received quite a few e-mails from folks asking how to create a compelling value proposition that would accentuate a grower’s competitive strategy in the face of this economic downturn. To answer that, let me preface my remarks with an observation: Too many companies enter the marketplace today without having fully defined their customer value proposition. Instead, growers tend to market a nice list of “powerful” benefits (which ironically, their competitors most likely state they have, too).

Let me start by saying the underlying purpose of a value proposition is to identify and satisfy an unmet need that your target market possesses. An effective value proposition describes what you do in terms of tangible business results for the customer. However, it’s more than a statement of offer or a buy-line. It’s a commitment to deliver a specific combination of resulting experiences, at a particular price, to a group of specifically-targeted customers, more profitably and better than the competition.

For a customer value proposition to be uniquely persuasive, it must be distinctive, measurable, defendable and sustainable. It is critical to define and support the value proposition in such a way that your customers will pay more for your product/service offerings than the competitions’ services, or substantially more customers will desire your products/services over those of your competitors. Developing a value proposition is the most difficult and time-consuming of all marketing activities. That’s probably why so many companies go to market without one clearly articulated.

Basically, your job in defining your value proposition is to uncover the value your company offers (and which your customers and prospects will want to buy). Your job is not to develop a long list of benefits. Why not? Because, again, your competitors will more than likely have the same list!

So, the question becomes very clear. How do you differentiate in a way that encourages more customers to buy from you or are willing to pay more based on your value proposition? Answer this, and I assure you that your firm will be one of the ones that will not only survive the downturn, but remains profitable while doing so.

Leave a Reply

More From Finance/Operations...
Four Star Greenhouse Proven Winner Plants At English Garden

May 26, 2015

Retailer To Grower: It’s Time To Offer Services To Local Garden Centers, Too

Retailers wonder why mass merchants are the only ones to receive stocking, merchandising and plant care from growers.

Read More
Greenhouse Electrical System

May 26, 2015

Don’t Let Your Greenhouse Electrical System Come Up Short – Part 1

Ensuring your greenhouse has enough electricity to operate all the equipment that is installed takes planning and consideration of an operation's needs. Part one of two articles on greenhouse electrical systems covers choosing an electrician, meeting immediate and future needs and planning for back-up power.

Read More

May 22, 2015

Nexus Greenhouses Is Optimistic For Expansion Into New Markets

Cheryl Longtin and Mike Porter, who own Nexus Corporation, say they were excited to attend the grand opening of Gotham Greens’ new structure atop the new Whole Foods grocery store in the Gowanus neighborhood in Brooklyn, N.Y., when it opened in December 2013. The project is just one example of some of the new and expanding markets that Nexus Corporation has expanded into over the past few years. Jeff Warschauer, vice president of sales for Nexus, says the company has enjoyed getting to know and working with the founders of Gotham Greens, Viraj Puri and Eric Haley, and Jennifer Nelkin Frymark, the chief agriculture officer, on their innovative approach to business. “They are very excited and work hard internally – just great people,” he says. “From our perspective, it’s great to see that excitement and vision. The employees there are happy and there’s no turnover; they’re only adding new people […]

Read More
Latest Stories
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

April 9, 2015

Altman Plants’ Online Cactus Shop Shows Strong Sa…

Altman Plants recently opened its new Cactus Shop, an online retail store that sells a variety of cactus and succulents. The store is a take-off of Altman’s original wholesale business, as the company started as a mail order catalog.

Read More
Dummen

April 8, 2015

Dümmen Group Welcomes Jim Devereux And Andrew Konicki T…

Dümmen group recently announced the addition of Jim Devereux and Andrew Konicki to its team. They are the newest members of the Key Account and Broker Support team for Dümmen, and will be responsible for building, developing and maintaining current broker and grower customer relationships.

Read More
Gov._Jerry_Brown_California

April 8, 2015

California Institutes First Ever Statewide Mandatory Wa…

California Gov. Jerry Brown announced April 1 that, for the first time in state history, action will be taken to implement mandatory water restrictions, with the ultimate goal of reducing water usage by 25 percent. As Californians are pushed to conserve more, growers will need to think about how demand for products will be affected.

Read More
DNA-logo

March 31, 2015

DNA Green Group Will Acquire Rijnplant

DNA Green Group and Riknplant have finalized DNA Green Group's acquisition of Rijnplant, meaning that the breeding and propagation activities in pot and cut anthurium, bougainvillea and heliconia will transfer to DNA Green Group.

Read More
AFE scholarship_Ryan Dickson

March 25, 2015

AFE Educational Grant And Scholarship Application Deadl…

Apply now for American Floral Endowment (AFE) scholarships or educational grants. Applications can be found online. For educational grants for 2015-2016, applications must be submitted no later than June 1. Scholarship applications are due May 1. AFE will award $40,000 in scholarships for 2015.

Read More

March 23, 2015

UF/IFAS Appoints Joseph Albano As Director Of Mid-Flori…

The University of Florida's Institute of Food and Agricultural Sciences (UF/IFAS) has a new directors for its Mid-Florida Research and Education Center (REC) on Apopka, Fla. The role has been filled by Joseph Albano, a research horticulturist from the U.S. Department of Agriculture with more than 25 years of experience.

Read More

March 17, 2015

Pike Nurseries Implements Employee Stock Ownership Plan

Independent garden retailer Pike Nurseries has announced it will become an employee-owned company. Pike Nurseries management has combined with its sister corporation in California, Armstrong Garden Centers, to operate under an established Employee Stock Ownership Plan (ESOP).

Read More
GrowIt! App Wins Gold At Design100 2014 US Mobile & App Design Awards

March 10, 2015

GrowIt! Mobile App Now Available For Android

The mobile app GrowIt! Garden Socially can now be used by gardeners with Android-based smartphones. Now available on the Google Play Market, GrowIt! helps users find plants to fit their lifestyle and connect them with other local gardeners.

Read More

March 4, 2015

Second Annual GreenhouseConnect Will Bring Growers and …

Following a successful inaugural event in Tampa last fall, Greenhouse Grower has announced the dates of its second annual GreenhouseConnect: October 26-29, 2015. Representatives of an expected two dozen leading greenhouse operations from across the U.S. will join senior-level suppliers at Rancho Bernardo Inn in San Diego for several days of one-on-one strategic meetings, a growers-only roundtable, informational sessions and a variety of networking events.

Read More

March 4, 2015

Maryland Green Industry Associations Unite

The Maryland Nursery and Landscape Association recently announced that it is expanding its reach to include the greenhouse industry, meaning it has become The Maryland Nursery, Landscape and Greenhouse Association (MNLGA). The change comes as a result of the planned dissolution of the former Maryland Greenhouse Growers Association and the invitation for those members to join the existing and renamed association.

Read More
IPPS Sharing Plant Production Knowledge Globally Logo

February 25, 2015

International Plant Propagators Western Region Sets Ann…

The annual meet for the International Plant Propagators' Society (IPPS) Western Region has been set for this September. It will take place September 23 to 26 in Modesto, Calif., and will include learning sessions, tours to local nurseries, a research poster display and poster presentations, various networking opportunities and an awards banquet to close the event.

Read More