Our industry is at a crossroads. Negative economic indicators, poor consumer confidence, surplus production and challenging distribution costs are just a few of the realities of the day. The opportunities that result from a combination of unique macroeconomic conditions and changing consumer demands require our industry to set priorities and will continue to be what determines whether growers embrace the future and its opportunities or run away from it. As one writer in Fortune magazine wrote recently, “Downturns aren’t for wimps.”
Although the times are tough, we can be thankful the same principles that have characterized successful operations of the past within our industry still apply today. Low-cost production, efficient distribution and first-class marketing have been and will continue to be the critical issues in the next 25 years. It is the implementation and execution of these principles that will separate the men from the boys.
Low-Cost Production: The importance of low-cost production will become increasingly paramount as global economic factors continue to create instability within supply-side costs. From alternative-resource fuel options in heating to increased automation to global sourcing efforts in plastic and packaging, it will be critical that we, as operators, continually review processes to ensure every effort is made to drive cost out of the scenario while maintaining the highest quality of our plants.
Get Away From Gut Feelings: High-quality plants will be taken for granted by our customers. A great shopping experience, a return customer and a successful consumer-gardener will continue to be the driving force behind our business, and this will not take place without great plants.
Instead of defending the relative quality of the plants, we’ll need to invest significant resources in the creation of repeatable, scientific growing processes and procedures that will focus on objective data points rather than subjective “gut feelings.”
Recognize & Adapt To Distribution Changes: Rising distribution costs and shifts in consumer trends (e.g. the recent consumer trend toward larger, less freight-friendly containers) will also present opportunities in the future. The ability of growers to operate within a smaller delivery radius and to offer a more complete live goods solution will continue to be important as more “horticulture hubs” are developed throughout the country based on a FedEx hub and spoke model. It will be the growers that continue to recognize these distribution-driven changes and adapt accordingly who will thrive.
Adopt Consumer Marketing Strategies: The ability of our industry to identify home décor solutions for consumers and stay relevant to their changing needs will be critical as discretionary income levels tighten and competition for entertainment dollars intensifies. We must continue to adopt marketing strategies similar to consumer product giants (e.g. Procter & Gamble) and make our product development decisions based on focus groups, pantone charts and color trends rather than seed inventory, personal preference and success of the past.
Embrace Co-opetition: Co-opetition is the new buzz word that accurately describes the scenario that must occur for growers preparing for success in the future. At the heart of this shift will be the critical need for growers to merge marketing efforts, share best cultural practices and synergize distribution efforts. Those who embrace this strategy going forward will have much to gain, and those who fail to recognize the value of the exercise will struggle.