Special Report: Montgomery’s Spring Recap & Analysis (Part 3)

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.

Summary

This was a year in which the industry clearly exceeded expectations, signaling that consumers with less money will still buy green goods. Consumers seem to have shopped harder for value than in the past, but unit volume was clearly above most industry expectations. A retail price above $25 was the area of resistance, but items priced below that level had good sales velocity. Many have said they sold more seed-grown annuals that were in the consumer’s price/value “wheelhouse.”

Although bedding plants and perennials sold well this spring, there is increasing competition from roses, especially the Knockout series, hydrangeas and flowering tropicals. Led by the extreme growth of the Suntory mandevillas, these categories are competing for traditional bedding plant shelf space.

In some of the older store formats at the national retailers the garden center footprint is small and cannot accommodate the inventory needed in the prime selling seasons, so traditional grow carts become selling platforms. They offer the flexibility of being mobile and can create huge increases in available store inventory. We have seen a number of carts that have POS materials installed to draw the consumer’s attention. Sometimes, they are product oriented and in other instances they are lifestyle oriented. Both methods seem to be very effective. Some the most attractive cart POS were from Ivy Acres, Bell Nursery and the Burpee Home Garden vegetable brand.

We see many “wow” products, and some very interesting marketing programs. But in some cases, they are negated by how they are merchandised. The real game changer is great merchandising, and if this element is not well executed, everyone loses. Merchandising can drastically change the sales volume and profitability of any given retailer that it has become so clear it is major element of success or failure. We believe the best merchandisers are generally the most successful growers. It is just as important as putting plants that say “wow” on the retail shelves.

As we consider our plans for 2010, considering growing great plants is only a “ticket to play.” Being a great grower won’t cut it anymore. Those who are flourishing and will continue to flourish are above-average business people who just happen to produce great plants.

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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