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...

March 4, 2015

Nexus Corporation’s Cheryl Longtin Encourages Women To Seek Volunteer Leadership Opportunities

When Cheryl Longtin came to the horticulture business in 1994, she applied her experience in the automotive industry to promote the adoption of more technology in greenhouse production. Longtin says horticulture, with its rich family tradition, has long promoted women in the industry compared to other industries, but women in horticulture must continue to seek out opportunities to provide volunteer leadership in organizations that shape the future of the business.

Read More

March 4, 2015

Second Annual GreenhouseConnect Will Bring Growers and Suppliers Together in San Diego This October

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
cultivate'15 logo

March 4, 2015

Cultivate’15: AmericanHort Announces What’s New

In an industry that has seen major changes occurring at a fast pace, many industry professionals leave Cultivate with their heads spinning and no clear idea of how to regroup and strategize. Cultivate’15 is “Changing the Game.” As this year’s focus, Changing the Game will call your attention to the ways in which our industry has changed and your opportunities to compete successfully.

Read More
Latest Stories

March 4, 2015

Nexus Corporation’s Cheryl Longtin Encourages Wom…

When Cheryl Longtin came to the horticulture business in 1994, she applied her experience in the automotive industry to promote the adoption of more technology in greenhouse production. Longtin says horticulture, with its rich family tradition, has long promoted women in the industry compared to other industries, but women in horticulture must continue to seek out opportunities to provide volunteer leadership in organizations that shape the future of the business.

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
cultivate'15 logo

March 4, 2015

Cultivate’15: AmericanHort Announces What’s…

In an industry that has seen major changes occurring at a fast pace, many industry professionals leave Cultivate with their heads spinning and no clear idea of how to regroup and strategize. Cultivate’15 is “Changing the Game.” As this year’s focus, Changing the Game will call your attention to the ways in which our industry has changed and your opportunities to compete successfully.

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
american-hort-logo

March 4, 2015

H-2B Cap Hit, Adding to Visa Program Woes

The H-2B visa cap for the first half of fiscal 2015 was hit late in January. As a result, some growers may not have access to the H-2B workers they need during the months ahead. The visa cap and resulting labor shortages will have impacts throughout the horticulture industry.

Read More

March 2, 2015

Avoid Surprises On The Delivery Dock

A call in advance about problems with a plant shipment to a retailer you supply goes a long way toward customer satisfaction.

Read More
Smart Herb Garden

March 2, 2015

Smartpot Uses Sensors And Cartridges To Ensure Success …

Click & Grow helps make it simple for consumers to grow their own herbs and spices at home, even if they have little experience with plants.

Read More

March 2, 2015

Student Flash Mob At TPIE Has Roots In Floriculture

The local FFA students who entertained TPIE attendees in 2014 and 2015 received industry donations of plants and a greenhouse structure to help expand their horticultural program.

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
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

February 18, 2015

Range Of Nursery Inspections To Protect Patented Plants…

Plant patents are under protection, and breeders are fighting for their rights to keep growers from illegally propagating protected varieties. It's something you don't want to take a chance on, because the risk is far higher than the reward. More than 300 inspections were carried out last year from New York to British Columbia and from Ontario to Florida to protect plant patents, Plant Breeders’ Rights (PBR) and branded programs.

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

February 11, 2015

Benchmarks: Find Your Game-Changer

Refuse to accept the status quo in your organization. Explore possibilities until you find what works best for your company.

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

February 4, 2015

TPIE 2015: An Electrified Industry Vibe Boosts Cool New…

The general feeling at the Florida Nursery Growers and Landscape Association's 2015 Tropical Industry Exhibition (TPIE) was upbeat and positive. Attendees were inspired by exciting new products and varieties, as well as creative new displays and innovative ideas and left energized for the season ahead.

Read More
Noble Foundation

February 3, 2015

Lloyd Noble Scholars Program Application Period Now Ope…

The Samuel Roberts Noble Foundation is offering college students an opportunity to work side-by-side with the Noble Foundation’s renowned agricultural consultants and researchers through the Lloyd Noble Scholars in Agriculture program, a summer internship that provides students the opportunity to enhance their in-class education with real-world application and experiences.

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