The Curious Case Of The Wholesale Clubs

The Curious Case Of The Wholesale Clubs

Walmart’s planogram, like those of the home improvement and supermarket chains, regularly incorporates live goods. The space those chains dedicate to live goods is roughly the same between stores, and the volume growers supply to each respective chain is enough to keep their greenhouses full and their operations in business.
 
Wholesale clubs are a different beast, though. Yes, BJ’s, Costco and Sam’s Club make up a massive retail channel, but live goods fit into their planograms differently. None of the three has a full-fledged garden center or floral department nationally. Instead, live goods are typically merchandised on wooden pallets and positioned wherever each club can make room for them in stores.
 
Sure, the live goods approach at the clubs is somewhat perplexing, and the supply challenges their growers face are daunting. But the rewards those growers reap, in many cases, trump the hoops they jump through in supplying the clubs.
 
“The clubs have figured out a way to bring in product on grower racks, get them in front of customers and sell them,” says Scott Giesbrecht, Green Circle Growers sales and marketing manager who works with Sam’s Club. “Their display is different and their execution is usually pretty good. In a limited SKU environment, their planogramming is typically strong. They’re very serious about space allocation. When space is given, the product will be there.”

The Challenges

Because the wholesale clubs employ a different strategy with live goods, the challenges their vendors face are also different than the challenges Walmart’s, Home Depot’s and Lowe’s vendors encounter. Many live goods are sold indoors, for starters, which forces growers to be very particular about the varieties they choose.
 
“We need to be a little more selective in picking out varieties that can tolerate the indoors, as well as colors that look right under the lights–especially during the spring season when we always have to be ready for a dip in the weather,” says Ed Van Hoven, the owner of American Color who serves Costco.
 
Per-store volume is a bigger issue. BJ’s, Costco and Sam’s Club don’t carry anywhere near the volume of a Walmart or a Home Depot, so each drop growers make is extremely limited. The goal of the clubs is to take in live goods and turn them as quickly as they can. So it isn’t unusual for growers to deliver small quantities to stores three or even four times per week. And because growers are making frequent deliveries to clubs, their transportation costs are pricey.
 
“It can be a challenge logistically because it’s all direct-store delivery,” says Marc Clark, the executive vice president at Rocket Farms who works with Costco. “It can be a challenge to get your truck to enough locations in a day before receiving closes. You just have to route your trucks properly. You have to get good at it.”
 
Still, as one club vendor who asked to remain anonymous for this story describes, his operation is serving 20 stores across six states. Compare that number to, say, between 20 and 50 Walmarts in a single state, and it’s easy to understand why growers gripe or shy away from the clubs.
 
“The guys who are making these types of accounts really work for them are the ones who have gone all in,” the vendor says. “They’ve invested a lot of time and energy and, in a lot of cases, personnel. They’re traveling frequently and assembling innovative ideas and containers. They’re offering things that keep their greenhouse in use and shipping workers busy in July, August and January. That’s how they’re really leveraging this.”

The Advantages

No grower-retailer partnership is immune from challenges, of course. If retail buyers ask for 50,000 petunias in white containers one day, change their mind a month later and decide they ultimately want those petunias in gray containers, the buyers are likely going to get what they want.
 
Surely every grower has a horror story or two about retail buyers gone mad, but growers can overlook those hiccups because each retailer offers its advantages, including the wholesale clubs. Although per-store volume isn’t as high at the clubs as it is at other retailers, growers seem to welcome the fewer SKUs focus.
 
“They’re not a complete garden center so they tend to focus on the top two to 10 SKUs in a category–maybe two to six SKUs at times,” says Dave Foltz, the new president at Ivy Acres who manages an account with BJ’s. “Instead of having everything A to Z, they move a lot of velocity of those two items. That’s a big plus just for efficiencies.”
 
Ten-inch poinsettias, 12-inch planters and hanging baskets are examples Foltz cites as items BJ’s moves with regularity. BJ’s may not move the total volume dollar of other retailers but sales are at least consistent.
 
“At Christmas time, poinsettias were flat or down at a lot of retailers but they were up tremendously at the clubs,” he says. “I think the customer sees they can get a very similar item for extreme value.”
 
Van Hoven says the fewer-SKUs approach works for Costco, as well.
 
“One of the advantages is that Costco does not run many SKUs, therefore the SKUs they do run are in large volume and very efficient in production and shipping,” he says. “They also run top-ticket items and the items that they run move through very quickly. The volume is definitely there on these items and the sell-through is quick.”
 
Another advantage of working with the clubs is their willingness to take on a grower’s surplus. BJ’s, for example, has purchased product from Ivy Acres that originally was grown for another customer. But if BJ’s sees value in that product, Foltz says they’ll take it and move it successfully.
 
“You used to see that a lot but you don’t anymore,” he says. “There are still opportunities other places but if you’re in a Home Depot, there’s one vendor in there. Another vendor can’t come in and put his product there.”

Other Benefits

Although a focus on fewer SKUs and a willingness to be flexible are attractive qualities to vendors, high foot traffic and the opportunity to grow year round are at the core of why growers do business with the clubs. Plus, because the clubs are focused on high quality and unique product, they’re more flexible on price than some other retailers.
 
“If you give them high quality and different, they become less concerned about price,” says one club grower. “The price is still important to them obviously–it’s probably their first consideration– but they don’t approach the business the way other boxes do.
“Other boxes think about footsteps so they can make more margin. The way the club approaches it is how do we present the right image to the customer? How do we communicate the right thing to our member? How do we make them feel? Then we’ll talk about how much money we’re going to make.”
 
Image isn’t everything to the clubs, though. They have, in fact, been trendsetters in some instances. Giesbrecht credits Sam’s Club as one of the earliest proponents of a 10-inch poinsettia program, and Clark says Costco clearly wants to differentiate itself with unusual items like the 10-inch plant you can’t find anywhere else for such a low price.
 
“They want to be innovative,” Clark says. “They would definitely not like to have the same old thing everyone else has. You want to say you’re glad you belong there because it’s a fantastic value, and that’s why you’ll see a plant retailing in there for $14 or $15 and the closest competitor may be $21. That’s a real value.”
 
Certain club stores are even improving how they display product, and that’s another incentive for growers to work with them.
 
“BJ’s is different than other retailers in terms of service,” Foltz says. “They take ownership of the product quite a bit. If we don’t get there, they’ll make sure a sign gets on it. The product may not be in the best possible spot, but they’ll make sure it’s on the floor and it’s sold.”
 
The clubs are also trying to create live goods opportunities for growers at times other than spring and the short fall mum and winter poinsettia stretches. Their approach to spring is somewhat different, too.
 
“As far as peak season, they want to make sure item performance for them is key,” Giesbrecht says. “In a low-margin environment, item performance becomes paramount. A lot of times you’ll see them getting in later–avoiding the risk of early-season shrink–and getting out early. You always want to go for that last dollar, but they really try to avoid late-season markdowns.”
 
Perhaps it’s because the clubs don’t pursue every last dollar that it’s refreshing for growers to work with them. Business at the club level certainly moves fast and every grower is faced with unusual challenges, but the rewards of supplying BJ’s, Costco and Sam’s Club are too good to pass up for most.
“Their ethics are very high and their word means a lot to them,” Clark says. “We work really hard to live up to Costco’s standards. It’s a partnership to us rather than an adversarial relationship.”

Leave a Reply

More From Marketing...

May 22, 2015

Nexus Greenhouses Is Optimistic For Expansion Into New Markets

Cheryl Longtin and Mike Porter, who own Nexus Corporation, say they were excited to attend the grand opening of Gotham Greens’ new structure atop the new Whole Foods grocery store in the Gowanus neighborhood in Brooklyn, N.Y., when it opened in December 2013. The project is just one example of some of the new and expanding markets that Nexus Corporation has expanded into over the past few years. Jeff Warschauer, vice president of sales for Nexus, says the company has enjoyed getting to know and working with the founders of Gotham Greens, Viraj Puri and Eric Haley, and Jennifer Nelkin Frymark, the chief agriculture officer, on their innovative approach to business. “They are very excited and work hard internally – just great people,” he says. “From our perspective, it’s great to see that excitement and vision. The employees there are happy and there’s no turnover; they’re only adding new people […]

Read More
Farwest2015

May 20, 2015

2015 Farwest Show Announces Second Annual Equipment Innovation Day

The second annual Equipment Innovation Day will be Tuesday, Aug. 25, prior to the 2015 Farwest show, which will be August 27-29 in Portland, Ore. Equipment Innovation Day, which was enthusiastically received in 2014, offers a real-time opportunity to see new heavy and automated nursery equipment in action. The demonstrations take place in manufacturing and nursery settings, adding value to the showcase. Attendees will be able to talk with participating manufacturers and learn first-hand from innovative growers who use the equipment in daily operations. The day-long event will be held at the main manufacturing plant of GK Machines, Inc., Donald, Ore. Further demonstrations of field equipment will take place at the nearby nursery of A&R Spada Farms, LLC. Bus travel to and from the event is planned, starting at and returning to the Oregon Convention Center. Attendees are welcome to provide their own travel to and from the site. Preregistration is required. The cost […]

Read More
Bee On Flower

May 20, 2015

White House Task Force Releases Pollinator Health Strategy

An interagency Pollinator Health Task Force commissioned by President Obama released its “Strategy to Promote the Health of Honey Bees and Other Pollinators” on May 19. The strategy, released in accordance with the Presidential Memorandum issued last June, is accompanied by a Pollinator Research Action Plan, which outlines needs and priority actions to better understand pollinator losses and improve pollinator health. The recommended actions will be supported by a coordination of existing federal research efforts and accompanied by a request to Congress for additional resources to respond to losses in pollinator populations. Pages 47 through 52 specifically address pesticides and pollinators. The report calls out plant production, native plants, mosquito control and all urban uses in its Pollinator Action Plan. RISE (Responsible Industry for a Sound Environment) says it supports the goals of improving pollinator health and habitat contained in the White House Pollinator Task Force’s release of its National […]

Read More
Latest Stories
New Guinea Impatiens

May 14, 2015

10 Tips To Improve Retail Shelf Life Of Bedding Plants

Good-looking plants at retail lead to stronger sales and less postharvest shrink. Try these 10 ideas for maintaining quality and keeping plants looking beautiful.

Read More
GrowIt! App Wins Gold At Design100 2014 US Mobile & App Design Awards

May 12, 2015

Suntory And GrowIt! Garden Socially Partner On A New Se…

Suntory Flowers and GrowIt! Garden Socially are working together on a new photo contest that both retailers and their customers can get involved in. GrowIt! Garden Socially is a free garden photo sharing app, and the photo contest is designed to promote Suntory’s plant brands and help consumers interested in those plants find them at local garden centers. Consumers who want to enter the contest can take these four steps: 1. Download GrowIt! for free from the App Store or Google Play store 2. Sign up with a username 3. In the app, add a photo of their favorite Senetti plant 4. In the comments, tag it #SenettiRocks The first photo contest featuring ‘Senetti’ pericallis runs from May 7-18. Three entrants will win gift certificates from their favorite local garden retailer — one $100 prize and two $50 prizes. After Senetti, the next featured brand will be ‘Million Bells’ calibrachoas […]

Read More

May 6, 2015

Orange Is The New Green: An Interview With Dümmen Orang…

The day the news came out about the name change of DNA Green Group to Dümmen Orange, and everything that meant for the large flower breeding conglomerate, Greenhouse Grower Editor Laura Drotleff talked with Dümmen Orange Operations Manager Kate Santos about what the identity shift would mean for the company, its customers and ultimately for consumers. What’s going to happen to the brands and what was behind the decision to do away with those brands and consolidate? A key objective for our organization in moving to one corporate brand is to continue to stay true to the heritage and history of the individual brands that have made us what we are today and what we will build the future of our company upon. For this reason, some of those brands that have a deep-rooted history and much more recognition within the market, will have a longer persistence in our overall […]

Read More

May 1, 2015

Restoration Landscapes: A Specialized Market For Nativ…

Restoration landscapes, depending on their purpose, often require straight native species, along with a confirmation of their known provenance. Research is key in this area and good recordkeeping is a must.

Read More
Dummen_Begonia_UnbelieveableFirstKiss

April 29, 2015

Dümmen Orange Is The New Name For DNA Green Group

DNA Green Group has a new name: Dümmen Orange. The company revealed its new name, logo and brand values at all of its facilities in 16 countries on Thursday, April 23. The well-known corporate brands Lex+, Bartels, Terra Nigra, Dümmen Group, Agribio China, Agribio Colombia, Oro, PLA, as well as the production locations, are changing their identities immediately to Dümmen Orange. Other established brands like Rijnplant, Ecke, Oglevee, Red Fox, Fides, Japan Agribio and Barberet & Blanc will convert over limited time. The company’s CEO Biense Visser calls it a logical next step. “All companies that have been acquired have a rich and successful history,” Visser says. “We have always tried to respect that heritage. Doing so, we created confusion for our customers. Our employees expressed a preference for a more uniform approach to the market, too. That is why we have chosen one large umbrella brand that embraces the entire product […]

Read More

April 15, 2015

Redesigned SunPatiens Website Offers New Tools For Saka…

Sakata Seed America's new and improved SunPatiens website launched March 1, 2015 and provides growing information, marketing support, product location and many more tools to encourage consumer success with SunPatiens.

Read More
Keenland

April 13, 2015

Proven Winners Partners With Award-Winning Designer Jon…

Proven Winners will partner with award-winning garden designer, author and fine living expert Jon Carloftis on a new series of four LIFE + STYLE events in 2015. In true Carloftis style, food and spirits will be paired with inspiring architecture and innovative garden designs featuring Proven Winners plants.

Read More

April 13, 2015

New Consumer Website Makes Buying Roses Easier

A new website has been created as a resource tool for gardeners who are looking for a rose that fits their needs. This website is 100% consumer focused and will inspire confidence and promote rose gardening to the next generation of gardeners. Visitors will also find links to connect on social networks, such as Facebook and Pinterest. The website promotes roses, not specific brands, and that is what makes it unique.

Read More
Rose rosette on Knockout rose, April 2012. Photo credit: Alan Windham, University of Tennessee

March 25, 2015

$58 Million In APHIS Farm Bill Funding Will Support Hor…

Nearly $58 million as been allocated by the USDA's Animal and Plant Health Inspection Service (APHIS) to support the industry's Plant Pest and Disease Management and Disaster Prevention Program, under Farm Bill Section 10007. The program will support mitigation efforts for specialty crops, including providing research and other funding to address plant pest and disease priorities for the specialty crop industry, including floriculture and nursery crops.

Read More
National Floriculture Forum 2015 029

March 18, 2015

2015 National Floriculture Forum Focuses On Marketing I…

The 2015 National Floriculture Forum, held March 6 to 7 in Minneapolis, Minn., zeroed in on the topic of marketing in horticulture and included visits to Gertens Greenhouses and Garden Center, Bailey Nurseries, Bachman’s Floral, Home and Garden and Tangletown Gardens. The annual meeting allows greenhouse and floriculture faculty, graduate students and industry partners to meet and share updates on current research, issues and initiatives.

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

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
Costa Farms Website

January 21, 2015

Costa Farms’ Launches New Interactive Website

Costa Farms is making efforts to educate consumers while pushing horticultural digital marketing forward with the re-design of its website. The new website features a fresh design and improved navigation, as well as a plant finder that gives gardeners easy access to plant information.

Read More

January 5, 2015

Growers Are Successfully Marketing The Benefits Of Pla…

Growers who are already marketing plant benefits and gardening as a lifestyle say they think this could be the best angle for the floriculture industry to promote our products.

Read More

January 5, 2015

Plants Love You Campaign Raises Plant Benefits To Foref…

Plants make us feel good. It’s a no-brainer, backed by numerous studies, but there’s more to the story. And it’s one the Canadian Ornamental Horticulture Alliance (COHA) hopes its Plants Love You campaign will tell in such a way that it will inspire people to make plants a part of their life, and on a bigger scale. COHA is an alliance between the Canadian Nursery Landscape Association (CNLA), the Fédération Interdisciplinaire De L’Horticulture Ornementqale Du Québec (FIHOQ) and Flowers Canada Growers (FCG). Inspiration for The Plants Love You campaign came from COHA’s research, which revealed that 96 percent of consumers surveyed have a favorable attitude toward plants. When COHA delved deeper into the numbers, one thing stood out loud and clear. “It quickly became apparent that while consumers like plants because they are pretty and make them feel good, few understood the environmental and health benefits plants offer.” says Frank […]

Read More

December 9, 2014

New Website For PanAmerican Seed

PanAmerican Seed's new website is mobile-friendly and has a fresh look and enhanced navigation.

Read More
What’s a pumpulent? It’s a pumpkin planted with succulents, and it’s also one of the ways Altum’s is catching customers’ attention with new products and modern marketing.

December 1, 2014

9 Digital Marketing Resolutions For 2015

Whatever your experience with digital marketing, here’s some advice for keeping your business progressing into the new year.

Read More

November 25, 2014

Conley’s Launches New Website

Conley’s Manufacturing and Sales recently launched its newly designed website, which was redesigned to create a user-friendly digital environment for customers to explore Conley's products.

Read More