Ruling By Region

After following the grower consolidation movement the last 10 years, I am convinced that we will not see a dominant national player. The latest headlines surrounding California-based conglomerates Color Spot Nursery and Hines Horticulture reinforce that.

At one point, Hines Horticulture was poised to be the dominant national player with production facilities on the West Coast and East Coast in New York, South Carolina and Florida. While its western production was more nursery oriented, the eastern acquisitions were bedding and blooming potted plants, creating a foundation for a color division.

Just observing the big-box action and growers supplying nursery and greenhouse crops, the bedding plant growers are much more dedicated to servicing their products at retail. There is a greater intensity with seasonal bedding than nursery, especially on the replenishment side. Bedding growers have their own people in the stores. Nursery growers tend to use third-party merchandisers. Part of this is due to nursery products traveling greater distances and bedding being more local.

Miami-based Lovell Farms, which was purchased by Hines in 2000, was best known for its service and “guaranteed sales,” a precursor to pay by scan. The operation’s relationship was so tight with Home Depot, no other grower could break in. Somehow after Hines bought Lovell, that all changed and the Home Depot business opened up to local and more aggressive growers.

Service is most successful when growers feel they own their region and dominate each store themselves. Logistically, this requires strong regional strategies. The farther you have to deliver to service a bigger market radius, the more expensive and less effective this strategy will be.

Another problem unique to our industry is rooted in the plants themselves. Once the product is produced, it must leave the system. It can’t be stored in inventory or processed like fruits and vegetables. Once that plant is ready, it has to leave. Production backups are more problematic if you are not influencing sell-through at retail.

Hines has since retreated from the east, which is full of very strong regional players, and appears to be gravitating more to the nursery side again. It is differentiating itself with key designer product lines in clematis and hydrangea, both consumer favorites. Patio Tropics have been another popular line. I predict a downsized Hines with a more diversified customer base will be successful.

As a publicly traded company, Hines also is struggling with getting its stock prices up and listed again while rebuilding equity in the business.

In contrast, Color Spot was the service pioneer in California with guaranteed sales and a focus on bedding plants. While at one point Color Spot extended its reach all the way up to the Northwest through a series of acquisitions, the company is now firmly planted in California and Texas.

It operates as two distinct divisions, west and southwest. The two divisions operate separately in terms of planning, production and distribution and have their own set of customers, store locations and representatives. Buying the largest competitor in Texas, Powell Plant Farm, makes sense.

“We feel our customers and business model are regionally based,” says Color Spot’s President Jerry Halamuda. “We find that when you know your seasonality, production culture, distribution matrix and personnel and you are ‘touching’ them everyday, then you are focused on success.”

Leave a Reply

More From Finance/Operations...
Gaillardia x grandiflora 'Arizona Apricot'

February 25, 2015

National Garden Bureau Designates 2015 As Year Of The Gaillardia

Gaillardia, also known as the blanket flower, is a member of the sunflower family (Asteraceae) and a long-blooming pollinator plant. It is fitting that the National Garden Bureau has specified 2015 as The Year of the Gaillardia.

Read More
IPPS Sharing Plant Production Knowledge Globally Logo

February 25, 2015

International Plant Propagators Western Region Sets Annual Meeting Date

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
Evolvulus Blue My Mind

February 24, 2015

Blue Ribbon Bloomers For Greenhouse Production

Grow what consumers want! Surveys show that blue is one of the top preferred colors of today’s consumers. Here are twelve top recommended blue-flowering Proven Winners annuals and perennials to suit your spring production cycle.

Read More
Latest Stories
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
myers industries Lawn and Garden Logo

February 24, 2015

Myers Industries, Inc. Lawn And Garden Business Sold, N…

The management of Myers Lawn and Garden Group, along with Wingate Partners V, L.P. have recently acquired the Myers Industries, Inc. Lawn and Garden business. The new company is named The HC Companies, and will continue as a North American leading provider of horticulture containers supplying the greenhouse, nursery and retail markets.

Read More
american-hort-logo

February 17, 2015

AmericanHort Announces New Board Members

AmericanHort recently announced the election of new officers and members to the board of directors. Each will assume their positions on the board during Cultivate’15, July 11 to 14 in Columbus, Ohio.

Read More
All American Selections

February 17, 2015

All-America Selections Elects New Officers, Names New J…

While meeting during the Flower and Vegetable Seed Conference in Tampa, Fla., hosted by the American Seed Trade Association, All-America Selections elected new officers for a two-year term. Read on to learn about the new officers, as well as all of the new judges that were added in 2014.

Read More
Greenhouse Grower.com on your desktop, on your phone, on your tablet

February 11, 2015

GreenhouseGrower.com Relaunches With Responsive Design …

Greenhouse Grower magazine, the nation’s leader in profits, production and education for greenhouse growers, announces the launch of its completely redesigned website, GreenhouseGrower.com. The new design is the product of direct user feedback and GreenhouseGrower.com analytics, and includes responsive design for ease of mobile use.

Read More
Andy Higgins

February 3, 2015

MasterTag Names Andy Higgins As Its New President

Former CEO and president of Ecke Ranch, Andy Higgins, joins MasterTag as its new president. He brings more than two decades of industry experience to the position.

Read More
Syngenta Bioline Hires Ronald Valentin For Technical Lead Role

January 28, 2015

Syngenta Bioline Hires Ronald Valentin For Technical Le…

Ronald Valentin has been appointed technical lead for Syngenta Bioline, effective January 2015. He will be responsible for technical support of Bioline biological control agents and will be instrumental in helping growers develop integrated pest management (IPM) solutions.

Read More

January 27, 2015

Give Equal Time To The Number Crunchers

Before investing in a new business opportunity, check in with the financial gurus of your organization to make certain you have the cash flow to back up your efforts.

Read More
Plant Introductions, Inc. partners Mark Griffith, Dr. Michael Dirr and Jeff Beasley and Bailey Nurseries President Terri McEnaney.

January 20, 2015

Bailey Nurseries’ Purchase Of Plant Introductions Inc. …

When Bailey Nurseries purchased its long-time breeding partner, Plant Introductions, Inc. (PII), in early January 2015, it freed the PII team to concentrate on what they do best: develop new plants. Bailey Nurseries will take on the business management side of the partnership, but otherwise the relationship it has enjoyed with PII for years will be largely unchanged.

Read More
Plant Introductions, Inc. partners Mark Griffith, Dr. Michael Dirr and Jeff Beasley and Bailey Nurseries President Terri McEnaney.

January 13, 2015

Bailey Nurseries Acquires Plant Introductions

Bailey Nurseries has acquired Plant Introductions, Inc. (PII), effective January 1, 2015. PII has developed numerous innovative new varieties that have been marketed worldwide, many introduced by Bailey Nurseries.

Read More

January 7, 2015

How Inflation Affects Your Business And Why You Can’t I…

Awareness of the true increase in costs after inflation is a necessary part of good financial management for greenhouse operations.

Read More

December 4, 2014

New Developments In Shipping/Logistics Software

Improved shipping and logistics software from Picas Software and MapMechanics makes it easier for growers to plan loads efficiently and automate day-to-day distribution planning.

Read More
Fritz Dramm

December 2, 2014

Dramm Corporation Welcomes Back Fritz Dramm

Dramm Corp. recently welcomed Fritz Dramm as the new fertilizer production and compliance manager. Dramm previously worked at the company through high school and college, and is back after 20-plus years.

Read More
Sarah Harwood

November 24, 2014

Take Control Of Your Operation’s Succession Planning Pr…

Proper business and estate planning with your intentions clearly expressed can ensure your goals for the future of your business are fulfilled.

Read More

November 24, 2014

Succession Planning For Growers

Succession planning is a sensitive subject, but one that needs to be addressed when deciding on your operation's legacy. Greenhouse Grower caught up with two growers who shared their process and provided tips for a smooth transition.

Read More

November 24, 2014

BrightFarms Pioneers Hydroponic Greenhouses For Urban A…

BrightFarms brings fresh, local produce to underserved areas with hydroponic greenhouses located on neglected urban spaces.

Read More

November 10, 2014

NGB, AFE To Join In #GivingTuesday On December 2

The American Floral Endowment will participate in #GivingTuesday on December 2, a national movement to encourage charitable giving.

Read More

November 8, 2014

Amid Drought, Californians Talk Water

As extreme drought conditions continue, the state looks at how it manages its resources, while growers try to conserve and meet changing consumer needs.

Read More