Change Is A Good Thing

Change Is A Good Thing

Our industry has always felt changes in certain areas over others, but over the last three years we have entered into more collective rhetoric than ever. The rhetoric is probably driven by more obvious high-impact results than we have experienced in the past. The results of change have been eye opening because the No. 1 result has been the loss of greenhouse businesses at a rate we have never before seen.

According to USDA, the number of grower businesses has declined every year since 2001–a clear sign of industry change.

What Happened?

The retailers took charge and now make the decisions growers used to make. Many growers are mad and would like to return to the “good old days,” but that isn’t going to happen. While the retailers took charge, they also provided more retail selling space than we could ever have envisioned, creating more than 100 million square feet of selling space since 1980. We should love these guys.

In the 1980s and ’90s, it was one big party with rapidly growing demand for bedding plants and perennials, great margins and little price pressure. Then, in the late 1990s, national retailers got very serious about a new topic–”supply chain management”–and things rapidly changed as we entered a new era of accountability. Retailers developed sophisticated tools for measuring vendor performance, and they called the industry to task in areas of gross margin, same store sales, year-over-year comps–and, of course, cost of goods.

The grower community split into two factions. One faction stood by the old traditions of “grower in charge” and fought changes instituted by the retailers. The second adopted the philosophy of “we have to figure out how to serve these customers profitably or find new customers.” The group that fought change has been most negatively affected by change.

As retailers consolidated their supply base with fewer but larger suppliers, they have come to expect higher levels of performance. High performance does not simply mean growing quality goods. Quality is not measurable and, therefore, cannot be defined except in terms of sales velocity, gross margin and the quantity discarded. Get those numbers right and you have quality.

In determining the number of growers serving the three largest national retailers, my estimate is 135 provide all the annuals, perennials and vegetables. And that number is down from 350 to 400 growers in the 1990s. Many former vendors have become successful contract growers, some sought out other channels of distribution and, of course, some are out of business.

Those who remain as vendors will become more than just good growers. They’ll become good business operators who provide products retailers want and consumers embrace.

Serving the national retailers has driven many changes in the industry and will drive more in the future, as vendors become increasingly accountable for sales, gross margins and discards.

Distribution

Distribution is usually the second biggest cost for growers, and it’s one of the most difficult costs to manage because of the complexities that include high fuel costs, investments in distribution carts and equipment, declining value per cart and smaller but more frequent deliveries. (Cart value decreases as the demand for larger containers increases.) With fewer vendors, the existing vendors are servicing more stores and servicing stores that are far away from their production centers.

Information Systems

Growers need sophisticated information systems in order to have quick, accurate information available to all who need it. The information system can be in the form of a merchandiser in the field, a salesperson preparing for a customer presentation or a distribution manager tiring to compute cost of a route. Accurate information in real time is a must.

Replenishment software is the next level of information needed to ensure the right products are on the shelves at the right time. Manual processes are time consuming and very inaccurate, so reliable replenishment software will save time, money and be a major contributor to the reduction of discards.

Category Management

Vendor managed inventories (VMI) will ultimately lead to total category management (CM) at certain retailers. I have seen some instances of it already happening in selected areas. CM is a system where one vendor manages the entire green goods category and is responsible for all vendors in the category. It is far more complex than VMI as we know it today, and there are few who are equipped to mange the complexities of Category Management.

New Products

It is amazing after attending the California Spring Trials each year to see what is on the retail shelves the following spring. Usually, you have to search many retailers to find any of the great new products launched at the trials. New products are the lifeblood of business and without them the price conversation becomes the major topic.

Have you ever wondered why you see certain brands at the national retailers? It has occurred to me that very few vendors have developed or are interested in developing a new product pipeline that keeps retailers and consumers interested. As a result, we look for more outside influences to drive product decisions, and those decisions are passed down to the growers.

We all view change differently but it is inevitable and will continually impact how we do business. Those who always benefit from change are those who look at it as an opportunity and not a threat.

Leave a Reply

More From Marketing...
dummen-orange

October 18, 2016

Dümmen Orange Buys Rose Breeder, Participates In Petal It Forward Program

Dümmen Orange will be hitting the streets of Columbus, OH, this week, handing out some of its favorite flowers as part of the Petal it Forward program in partnership with the Society of American Florists.

Read More
media-day-at-altman-plants

October 17, 2016

Altman Plants Hosts Media Day To Highlight Its Water Saving Programs

This month, Altman celebrated more than 100 million gallons of water saved since its water recycling program began operation.

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
dummen-orange

October 18, 2016

Dümmen Orange Buys Rose Breeder, Participates In Petal …

Dümmen Orange will be hitting the streets of Columbus, OH, this week, handing out some of its favorite flowers as part of the Petal it Forward program in partnership with the Society of American Florists.

Read More
media-day-at-altman-plants

October 17, 2016

Altman Plants Hosts Media Day To Highlight Its Water Sa…

This month, Altman celebrated more than 100 million gallons of water saved since its water recycling program began operation.

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
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
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
Laura Drotleff

August 10, 2016

Customers Need Hand-Holding And TLC [Opinion]

If we want customers to use our plants, we need to provide basic information about the plants we produce.

Read More
Luxflora Flower Run

July 20, 2016

First-Ever Flower Run Was A Big Success, Luxflora Says

Kicking off Cultivate’16 on Sunday, July 10, Luxflora’s first annual 5K saw nearly 150 participants racing through the picturesque Scioto Audubon Park in Columbus under clear blue skies and perfect conditions. It was a great way to start the week, participants said. Congratulations to the winners of the first-ever Flower Run: First Place: Jacob Griffith Gardner Second Place: Mike Goyette Third Place: Jack Ford The top three winners — and all of the Flower Run participants — were showered with flower petals when they crossed the finish line, making for a colorful and fragrant finish to an invigorating experience. “Personally, I would consider it a grand success,” says Luxflora President Rebecca Lusk. “The overall mood was fantastic, from start to finish. There were many high fives and group hugs, numerous duo phone selfies and postings to social media, while participants enjoyed their bananas and bottled water donated by Experience Columbus. Most […]

Read More
PrairieSplendor_CompactRose Syngenta Flowers March 2016

May 16, 2016

New “Generations Of Flowers” Study Tracks How And Why C…

The Society of American Florists and the American Floral Endowment have released an update and analysis of this study, which first began in 2009.

Read More
Webinar Photo from Flickr

May 7, 2016

How You Can Connect With A Broader Audience Through Web…

Webinars are time-saving and effective marketing tools that can extend your reach to a greater audience.

Read More

April 27, 2016

Use Your Data To Make Smarter Marketing Decisions

Learn which marketing metrics are important to your business, measure successes, and learn where changes are needed.

Read More

April 26, 2016

“Bee-Friendly” Labels Matter To Plant Consumers, Accord…

Research at Michigan State University shows ornamental plant buyers understand and respond to bee-friendly production practices.

Read More
Krause Berry Farms Farm To Table Dinner

April 20, 2016

What The Floriculture Industry Can Learn From Farm Mark…

Although we have a lot in common with the produce industry, there is much we can learn from one another.

Read More
Costa Farms Container Ideas E-Book

April 12, 2016

Costa Farms Targets Consumers With New Container Garden…

The electronic book offers tips on container selection, design, and plant care for millennials looking to grow in small spaces.

Read More
Tropical Fruit Tree Selection (Hopkins Tropical Fruit Nursery)

April 7, 2016

University Of Florida Research Shows Consumers Value Lo…

Compared to conventional plants, consumers reported a higher purchasing likelihood for certified organic or organically produced fruit plants.

Read More
Random Acts Of Flowers

March 31, 2016

The Floriculture Industry Needs A Unified Message To Pr…

Seeing the sneak preview of the new varieties that will be presented at California Spring Trials (CAST) spurs a visceral reaction in me. I’m giddy and excited about these gorgeous plants, having taken in some of their beauty and excellent performance already at Costa Farms’ Season Premier. I’m excited to travel to Spring Trials and that spring is coming, and I’m ready to dig in and get gardening. I’m guessing many of you feel the same way. And it’s likely that consumers do, too. Nearly a year ago, upon returning from California Spring Trials, I lamented the absence of ideas translated from CAST to retail. The beautiful displays, the breathtaking combinations, the clever marketing — somehow, all of that effort and enthusiasm focused on business-to-business promotion is not being funneled effectively to the consumer. As an industry, we are not good at working together to market our products in a clear, […]

Read More
Sakata Seed America President David Armstrong

March 30, 2016

Sakata Signs Agreement With Indonesian Government To Co…

This week, Sakata Seed Corp. announced internationally that it has signed an agreement with the Republic of Indonesia to cooperate in the further development and production of its line of SunPatiens interspecific hybrid impatiens, based on the principles of the Convention on Biological Diversity (CBD). Under an agreement based on the CBD, Sakata Seed has worked with the Indonesian government since the early 2000s to identify the origin of the native germplasm collected in Indonesia to develop SunPatiens, and the two parties have agreed on how the indigenous genetic resources will be used for the further development of SunPatiens. There are currently only a few cases in the world of such an agreement, based on the CBD in the category of horticultural plants, made between a resource-rich country and a commercial seed company. Greenhouse Grower contacted Sakata Seed CEO David Armstrong to provide context about this agreement, what it means […]

Read More
NGI-SunPatiens-Compact-Hot-Coral-Sakata

March 23, 2016

P. Allen Smith Says SunPatiens Are Hero Plants For Cons…

Plants that ensure consumer success with disease resistance bred into their genetics, and ease of use in a variety of conditions, are heroes for gardeners, especially beginners, and they should be celebrated and supported to promote gardening success and interest. These are the messages the award-winning designer, gardening, and lifestyle expert P. Allen Smith wants the horticulture industry to know, with the recent announcement of his expanded partnership with Sakata Seed. In an exclusive interview with Greenhouse Grower, P. Allen Smith describes his expanded partnership with Sakata Seed to promote SunPatiens and why the now 10-year-old series helps both novice and expert gardeners to be successful. Smith also collaborates with Sakata to promote the HomeGrown Collection of vegetables. SunPatiens Set Consumers Up For Success, Smith Says As a plantsman first, Smith has extensively trialed SunPatiens in his gardens at Moss Mountain Farm in Little Rock, AR, and says he is […]

Read More
Suzanne McKee

March 18, 2016

4 Pitfalls To Avoid With Responsive Web Design

When implementing responsive design on your website, sidestep these common problems with some advance planning.

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