Special Report: Montgomery’s Spring Recap & Analysis (Part 2)

Retail is where we find the most valuable information relative to industry trends because the trends are dictated by what happens here, not in the greenhouse or the nursery as it was in the past. The era of “grower in charge” has long passed, and we now reside in the era of “retailer in charge,” dramatically changing the market dynamics.

At retail you can see grower performance, retailer performance, price trends, size trends, the impact of marketing programs, brand activity, as well as the impact or lack of impact driven by grower performance.

To this end, I visited 972 retailers in 2008 and 494 since April 1, 2009, covering 20 markets in most regions of the country, including the West Coast, Northwest, Midwest, Northeast, Mid-Atlantic, and Southeast. The only major area we missed in 2009 was the Southwest.

The purpose of these visits is to gather information regarding retailer performance, vendor performance, price trends, size trends, merchandising, new products, marketing programs, brand activity and packaging. Vendor performance is broken into a number of categories, including, merchandising, plant size, amount of color, packaging, branded programs and product assortment.

New Products

The most noticeable new product was the Calliope geranium from Syngenta Flowers, which is said to be one of the largest new products releases in the company’s history. It was available at all three national retailers, but most prominently at Walmart, which arguably benefited the most, offering it in a 12-inch hanging basket and a 12-inch patio pot in the price range (depending on region) from $16 to $20. Home Depot offered it under the name “Big Red” and it makes you wonder why the breeder would allow anyone to rename this breakthrough product threatening the loss of identity.

Every year, there are hundreds of new varieties released. But when you go to retail, unless you are an industry expert, most are invisible because most bedding plants are sold generically. For the most part, breeders worry about selling them to the grower, and unless there is a compelling marketing program built around them, they fall into the commodity category very quickly. Why do you think Wave has been so successful? Answer: It has brand identity.

Marketing Programs

One of the hottest programs this year was the tropical flowering category lead by the Suntory Sun Parasol mandevillas that appeared prominently at all the national retailers. The most popular sizes were a 1 gallon, 1-gallon trellis and a 10-inch hanging basket. Consumers were really taken by the massive flower count and exotic look.

Suntory has clearly reinvigorated the flowering tropical category with these world-class mandevillas. It seemed all were grown in Florida and contracted to growers across the country. The plant size and color were both above normal plant specs. Look for huge increases in this category led by Suntory. Hopefully, Suntory will look at hibiscus and bougainvillea to help broaden the category.

The Calliope geranium from Syngneta Flowers made a huge impact on the geranium category, with this world-class variety offering many features not seen in other geraniums.

–Rich velvet red color that is totally different than any other red
–Extremely large flowers
–Blooms under low-light conditions
–Is drought tolerant
–A vigorous spreading habit

We observed this variety on the shelves of many retailers, and when it was grown properly, the sale velocity was very evident. It was especially appealing in Walmart in a 12-inch basket and 12-inch patio pot.

Another outstanding product, ‘Tiger Eye’ rudbeckia bred by Goldsmith Seeds, was an eye-catcher at retail and was offered in an 8-inch logo pot and prominently displayed at Walmart. This seemingly was successful again when produced right and the height was controlled.

Although the Burpee Home Garden vegetable program was only launched in a couple of tests markets, what I observed in one of those markets was a very successful launch with customers clamoring about this well-recognized brand.

It was available in 4-inch and 6-inch rice net pot that allows the customer to plant the pot. I have since seen a conventional branded container made from plastic. A large descriptive label and great point-of-sale (POS) material was used to identify the brand. The only missing element was a locking label that would ensure the label does not get separated from the container. This brand will impact the vegetable segment, and the timing of the launch is ideal.

Some the other interesting programs done very simplistically but very effectively are:

–    Colors of Coleus (Lowe’s)
–    Colors of Caladiums (Lowe’s)
–    Yellow Petunia (Lowe’s, in response to ‘Lemon Zest’ at Home Depot)
–    Strawberry Petunia (Lowe’s)
–    Confetti multi-variety liners from Dummen that make producing really nice mixed baskets and containers easy
–    Color and Texture, a 4-inch coleus program sold on carts with attractive POS material adorning the cart from Neal Mast & Son Greenhouses
–    Jump Starts, a line of trailing annuals with attractive POS materials from Smith Gardens in Bellingham, Wash.
–    growe and earthe organic vegetable lines from Smith Gardens
–    Cover Story rock garden perennials, nicely packaged in a handle pack with nice labeling and graphics developed by Northwest Horticulture.

There are large numbers of programs at independents that would take up more pages than anyone would possibly want to read. One example is Chef Jeff’s vegetables I observed at Stein’s Garden Center in Wisconsin, with arguably some of the best packaging seen on retail shelves.

Brand Activity

The plant brand most often seen was Wave, as it appeared at all the national retailers and most of the independents. Ninety-eight percent of the time, Wave appeared with its signature pink packaging. I also noticed a marked increase in the offering of Tidal Wave a unique hedgiflora petunia that has been under utilized. Proven Winners was less visible but did appear in two of the national retailers and a number of independents.

The Suntory Sun Parasol mandevilla was clearly the brand that increased the most, appearing at all three national retailers and, to lesser a degree, at the independent garden centers. Clearly, it is the fastest growing in units and retail exposure, and the premium pricing does not seem to slow down the sales velocity–another example of new and unique products perceived as a consumer value.

Exclusive to the IGC retail sector, the Stepables brand appears frequently and is generally well merchandised using the upscale POS materials. In vegetables, the Bonnie Plant Farm brand appears in all three national retailers and arguably commands 90 percent of the vegetable shelf space.

Home Depot uses both the Viva and Vigoro brands, with Vigoro in the better price category and Viva in the best price category. Home Depot also offers the Proven Winners brand in the best price category and, of course, Wave is visible in all stores.

Resurgence Of Vegetables

Almost unanimously, growers say they experienced large increases in the vegetable category. Their success was driven by the downturn of the economy coupled with a move toward healthier lifestyles. Bonnie Plant Farm is the clear leader at the three national retailers, often crowding out local vendors.

The category is expected to grow in 2010 and beyond. I look for more entries at both the local and national level. Burpee Home Garden is being launched in 2010 and will have a significant impact on the market. Look for more eco-friendly and organic programs. At some point, we will see famous chefs and celebrities put their name on branded vegetables. Clearly, this is a growing category and presents many opportunities for one of the highest margin categories.

Packaging

Highly visual impact packaging and labeling are becoming more evident each season, considering what is already on the market–Wave, Proven Winners, Viva, Garden Club Select, Burpee Vegetables. There are other more generic programs that have effectively gained attention getting colored pots like Color of Coleus, Colorful Caladium and Yellow Petunia from Lowe’s to name a few. Upscale packaging does not have to be ultra creative, just attention-getting and compelling.

Labels are an integral part of the package. Large colorful labels draw attention and offer the opportunity to display more consumer information. The most visually attractive packages use locking labels that make it easier for the consumer to garner information.

Proven Winners has one of the best overall packages that always include locking labels. Unfortunately, many times the locking feature is not used.

We are, of course, manufacturers of consumer products so packaging is not a cost; it’s an investment.

Vendor Performance

In my travels to 494 garden centers this year, it was evident improved quality was offered at most retailers and the amount of “wow” increased across the country. There was a lot more color on seed-grown annuals, hanging baskets and potted annuals. The patio pot category was not as impressive because of the lack of color and plant size. Patio pots with three or more varieties were the worst, as many of the recipes used did not allow all the items to flower simultaneously.

It seems as though we are getting far too artsy. Consequently, the products lack the color needed to achieve rapid sales turnover. The best patio pots were generally those with one or two varieties. Well-grown geraniums were a prime example. Some of the best patio pots we saw were at Walmart, which featured only a 12-inch Calliope geranium. When we observed that item with eight to 10 flowers, it virtually walked out the door.

With fewer consumers wanting to dig holes, patio pots and hanging baskets will become a large part of the product portfolio. Let’s make sure they have the “wow.” Some of the best combination hanging baskets I saw were produced using the Confetti liners from Dummen USA, provided by Bob’s Market in Mason, W.V., one of the premier rooting stations in North America.

About the author: Jerry Montgomery is a 40-year veteran of the floriculture industry and has worked for distributor companies, breeders and large growers specializing with a focus on sales and marketing. As an industry consultant, he works for large growers, distributors and breeder/producers. His focus is to understand the market dynamics from breeder to consumer through intense retail travel, visiting almost 1,500 stores since January 2008.

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