Managing Complexity

Walmart pulled the rug out from a couple hundred large growers last fall, when it downsized its vendor base for spring 2009. The growers were essentially given less than three months’ notice, sending shockwaves through our industry. While those who weren’t cut will be doubling their store base, those who were have been scrambling to find buyers for spring production.

The same thing happened heading into poinsettia season, with the base of grower vendors reduced from 100 to 30, sources tell us. Walmart still needs the same number of plants for its stores. It just doesn’t want to deal with the complexity of our supply chain. No other product line has the level of fragmentation and complexity that ours has at mass retail, as far as I know. Other perishable products, like produce, are more streamlined in their distribution. A base of 400 flower growers probably was at least 200 too many, even for the largest national retailer.

Many growers who serve Walmart also serve Home Depot, Lowe’s or regional chains, like Menard’s. Walmart has been a customer growers like to serve, because it pays for and honors what it orders and doesn’t require additional services and risks like merchandising and pay by scan. Walmart owns the inventory. Growers also value the real-time information Walmart provides vendors on how products are selling at each store. Performance is transparent. The numbers don’t lie.

It is our hope many of the growers who were cut are able to work with the growers who still have the sales contracts. One grower, who doesn’t serve Walmart but works with other contract growers, told me he had been getting calls from a number of growers he has never dealt with looking for channels to move product. He is concerned there will be a lot of uncommitted product flooding the market this spring.

Growers who have been selected to be regional leaders in their box store markets have earned it by investing not only in their production capabilities but their reliability as a vendor servicing the stores. Instead of growing the complete spectrum of products themselves, they contract with others on select items. The retailer used to worry about securing the complete product assortment. Now the grower does.

These growers who have achieved the dominant role in their regions have indirectly become big-box buyers. They have to worry about sharing risks and rewards with their contract growers even more than when they were just serving retailers.

When I think about the logistical complexity these growers have to manage, my head spins. I have heard horror stories about how difficult it is to coordinate retail orders from multiple sites at a single business, let alone from multiple growers in a region. Sophisticated inventory technology and distribution hubs will be the future. Perhaps this is where RFID (radio frequency identification) chips can provide the most benefit.

As the grower’s job becomes more complex on the service side, suppliers are looking for ways to make production simpler. For instance, if a grower is deeply involved in managing retail relationships, does he also need to worry about mixing his own soil and creating his own substrates? No. A lot of things growers used to do can be outsourced, just like cuttings and stock plants. Suppliers who can make this a value proposition for busy growers will succeed by relieving headaches.
There’s no question that the grower’s role is evolving well beyond growing.

Leave a Reply

More From Business Management...
Employees separate the plants by stem count, bud development and height. “This process allows us to respond more quickly to specific requests from customers,” Van Wingerden says

September 22, 2016

AmericanHort Hosting Webinar On Overtime Rule Compliance

The webinar takes place on Thursday, Sept. 29. AmericanHort is also throwing its support behind the Overtime Reform and Enhancement Act.

Read More
customer-base

September 21, 2016

6 Creative Ways To Expand Your Business

Marketing experts offer tips to help you catch the attention of new customers and grow your business.

Read More
OSU ATI Greenhouse

September 21, 2016

Your Support Is Essential For Current And Future Students

September is back to school time, and that means renewed opportunity to support the young people who are electing to pursue careers in horticulture. I continue to hear from growers of all sizes, from all over the country, that there just are not enough qualified graduates of two- or four-year horticulture programs. We also need to be active in promoting careers in horticulture to those who are not aware of the opportunities available. There have been some great success stories in this area recently. At University of Florida (UF) last fall, Anna Ball and Dr. Marvin Miller of Ball Horticultural Co. joined UF’s Dr. David Clark in an introductory environmental horticulture couse that’s open to any major. After the class, the line of students waiting to talk with Ball, Miller, and Clark was out the door. It is so important, Ball says, for each of us, individually and collectively to […]

Read More
Latest Stories
Employees separate the plants by stem count, bud development and height. “This process allows us to respond more quickly to specific requests from customers,” Van Wingerden says

September 22, 2016

AmericanHort Hosting Webinar On Overtime Rule Complianc…

The webinar takes place on Thursday, Sept. 29. AmericanHort is also throwing its support behind the Overtime Reform and Enhancement Act.

Read More
customer-base

September 21, 2016

6 Creative Ways To Expand Your Business

Marketing experts offer tips to help you catch the attention of new customers and grow your business.

Read More
OSU ATI Greenhouse

September 21, 2016

Your Support Is Essential For Current And Future Studen…

September is back to school time, and that means renewed opportunity to support the young people who are electing to pursue careers in horticulture. I continue to hear from growers of all sizes, from all over the country, that there just are not enough qualified graduates of two- or four-year horticulture programs. We also need to be active in promoting careers in horticulture to those who are not aware of the opportunities available. There have been some great success stories in this area recently. At University of Florida (UF) last fall, Anna Ball and Dr. Marvin Miller of Ball Horticultural Co. joined UF’s Dr. David Clark in an introductory environmental horticulture couse that’s open to any major. After the class, the line of students waiting to talk with Ball, Miller, and Clark was out the door. It is so important, Ball says, for each of us, individually and collectively to […]

Read More
Pansy ‘Cool Wave Blue Skies’ (Wave)

September 20, 2016

PanAmerican Seed Settles Alleged Trade Sanction Violati…

PanAmerican Seed, a division of Ball Horticultural Co., has been charged with violating trade sanctions to Iran over a number of years. According to a release from the U.S. Treasury department, PanAmerican Seed made 48 indirect sales of seeds to two Iranian distributors. The company shipped the seed to consignees based in countries in Europe and the Middle East. PanAmerican Seed’s customers then arranged for the re-exportation of the seeds to Iran. The release states that the Office of Foreign Assets Control (OFAC) determined PanAmerican Seed did not voluntarily self-disclose the alleged violations to OFAC, constituting an egregious case. “We believe that the settlement was extreme; however the alternative was to litigate with the U.S. government, which would take months, if not years,” says Todd Billings, Chief Financial Officer for Ball Horticultural Co. When asked what Ball Horticultural Co. has done to ensure that violations to trade sanctions do not […]

Read More
young-plants

September 20, 2016

The Top Young Plant Growers, And Four Critical Challeng…

In Greenhouse Grower’s 2016 Top Young Plant Growers Survey, growers discuss the latest challenges and opportunities in fulfillment, shipping, labor, and crop protection.

Read More
Dual Income No Kids (DINK) Young Couple

September 16, 2016

What You Need To Know About DINKs

DINKs (Dual Income, No Kids) are quickly becoming one of the fastest-growing demographics that marketers are targeting.

Read More
MANTS

September 15, 2016

Registration Is Now Open For MANTS 2017 In Baltimore

The 2017 Mid-Atlantic Nursery Trade Show takes place Jan. 11-13 in Baltimore, MD, and will feature more than 1,000 exhibitors from the green industry.

Read More
farwest-2016-photobooth

September 14, 2016

Farwest 2016 Marked By Expert Discussions On Green Indu…

Attendance at the 2016 Farwest Show in Portland was up 6% from last year, as visitors sought to learn more about emergent market opportunities.

Read More
Workers at Golden State Bulb Growers clean Calla tubers and select the best quality bulbs, placing them on conveyors to be graded, counted and sorted in the new system

September 13, 2016

Newly Signed California Law Expands Overtime To Farmwor…

The new law, which will be phased in beginning in 2019, is the first of its kind in the nation to end the 80-year-old practice of applying separate labor rules to agricultural laborers.

Read More
RISE New Governing Board 2016

September 11, 2016

RISE Appoints New Leadership, Hands Out Awards During 2…

“Our members’ enthusiasm is high, and we had great engagement as we work together to set objectives for 2017 and beyond,” said Aaron Hobbs, RISE President. “Our work ensures a vibrant future for our industry, so we can continue to deliver cutting-edge solutions to solve people’s pest and plant health problems.”

Read More
Workers at The Farm at Green Village

September 10, 2016

Now Is The Best Time To Demand Federal H-2B Program Sup…

Congress is expected to pass a continuing resolution spending bill in the near future, and whether or not that measure includes an H-2B returning worker exemption could impact your labor supply for 2017.

Read More
Cavicchio Greenhouses

September 6, 2016

Cavicchio Greenhouses Wins Inaugural Sustainability Awa…

The Sudbury, MA, growing operation sustains more than 250 acres of annuals, perennials, and nursery stock, with a number of practices to mitigate its impact on the environment.

Read More
Charlie Hall Feature Image

September 6, 2016

10 Insights From Charlie Hall’s Green Industry Economic…

With the uncertain current economic climate, Texas A&M economist Charlie Hall says now may be the perfect time to invest — as long as you do it smartly.

Read More
Increased customer demand led Good Harvest Farms to add hydroponic lettuce in 2000

September 3, 2016

Are You A Leafy Greens Grower? If So, Take This Survey!

A team of researchers from several universities is looking for feedback from leafy greens and herb growers.

Read More
Michigan State University Employee Handbook

September 2, 2016

Why You Might Need An Employee Handbook For Your Greenh…

Employee handbooks are not just for big greenhouse operations that employ large numbers of workers. According to a Michigan State University expert, they are an important human resources management tool that all growers should have.

Read More
Griffin Onliant Logo

August 30, 2016

Griffin Launches New Digital Greenhouse Ordering System

Onliant, which replaces Griffin’s previous e-commerce sites, provides growers and retailers with a new platform to source plants, hard goods, equipment, and retail inputs.

Read More
America In Bloom Project

August 29, 2016

Your Chance To Help America In Bloom As It Celebrates I…

America In Bloom is launching a fundraising campaign to help the group continue its mission of creating beautiful and vibrant communities across the country.

Read More
North Creek Nurseries Feature Image

August 29, 2016

North Creek Nurseries Unites Horticulture With Sustaina…

The team at North Creek Nurseries, Greenhouse Grower’s 2016 Operation Of The Year, leads the way in implementing ecologically responsible practices that will sustain the future of growing.

Read More
[gravityform id="35" title="false" description="false"]