American floriculture differs from the rest of the world in some pretty major ways. Whereas European growers tend to concentrate on three or four crops, U.S. grower operations have remained quite diversified.
It’s not a new concept, to be sure, but in Greenhouse Grower’s annual Top 100 Growers survey, we wanted to know, how have growers continued to change their crop mix and how have these changes affected their business over time?
With the role growers play expanding beyond crop producers, we were also curious how much more merchandising and marketing they are doing, and how they see those jobs playing out as both growers and retailers become more competitive for sales.
Growing A Broader Crop Mix
The majority of growers (82 percent) said over the past 10 years, they have changed their crop mix at their customers’ request, and 78 percent said doing so helped their operations secure new customers.
Diversification of plant genera expanded significantly, and most growers said the number of varieties they offer doubled and even tripled compared to what they grew 10 years ago.
The growers reported other factors that led to changing crop mixes that included advancements like the availability of better genetics, improved disease resistance, better profit margins for premium items and better marketing efforts. More consumer interest in segments like container gardening, patio-ready items and perennials created pull-through demand. They also attributed crop changes to certain bedding plants becoming low-profit commodity items and disease issues like impatiens downy mildew.
Growers are continuing to change up their crop mix, too, with 77 percent saying they plan to grow more edibles, including vegetables (43 percent), herbs (29 percent) and fruit (5 percent) in future seasons. Thirty-eight percent are expanding into perennials, 31 percent are growing more bedding plants and 26 percent will increase blooming potted plants. In young plants, 36 percent will grow more plugs and propagation material and 5 percent are looking into organic starts.
Market Share And Merchandising
For the customers they serve, 27 percent of the Top 100 Growers consider their operations to be a one-stop shop, while 46 percent say they are one of a few grower vendors and 27 percent say they are one of many suppliers. Still, 44 percent supply between 75 to 100 percent of the plant products their customers buy.
Perhaps some of that share is credited to how involved growers are in providing merchandising services to retailers. Eighty-three percent of our respondents said they feel control over merchandising is a good thing and, given the choice, 72 percent want to market their own crops while 28 percent would rather someone else do it for them.
“Merchandising started as a part-time operation, cleaning up displays and watering,” said one grower. “Now we have four times as many merchandisers in the field as we have production employees in the greenhouse. Merchandisers are responsible for setting displays, but the stores are responsible for watering.”
The Top 100 Growers overwhelmingly want to be involved in retail merchandising, with 24 percent saying they want 100 percent control, 55 percent saying they want to be involved in making decisions on merchandising and plant care and 5 percent saying they want their teams in control of watering and plant care, but not merchandising. Another 16 percent say they want no part of any merchandising responsibilities.
“Merchandising is essential to a good sell through at box stores. Being successful at merchandising opens up more opportunities with customers who need help,” a grower said.
Other growers agreed, saying the only way to survive in the chains is to provide merchandising for increasingly hands-off stores.
“More control almost always means more profitability for the grower,” a grower said. “When you include inventory control (Home Depot) with quality control at the store level, you can run your own garden center.”
Some growers are even training retailers to focus their marketing and merchandising efforts at retail.
“We are working with merchandisers we already pay to communicate more. A trial in a warehouse chain will show our buyers new ways to merchandise,” a grower said.
Retailers will continue to expect more grower merchandising at their stores, most growers agreed, and some said it will be necessary for growers to stay involved and incorporate improved signage, displays, presentation, cleanliness and technology as consumer demand increases. But as growers assume more responsibility, they feel they should receive higher margins for their crops (see “Top 10 Retail Gripes”).
“This is the key to better execution at the store level,” one grower said. “Less shrink, better sell-through, nicer presentation and hopefully better sales!”
Marketing And Social Media
The Top 100 Growers are joining the ranks of social media marketers (63 percent), and if they’re not using it, they plan on getting started (14 percent).
Of the social media channels growers are using, everyone is on Facebook. Twitter comes in second with 47 percent, YouTube is popular with 43 percent and 37 percent are using Pinterest.
Growers’ continued merchandising and marketing efforts are keeping their products front-of-mind for the consumer, and that’s the goal, said one grower, who tweaks promotions to respond to consumer nuances.
“Our current marketing efforts are based in multi-channel segments of garden center, landscape and re-wholesale. We focus our marketing efforts based on the sales history and demographics and needs of each of those three channels,” the grower said. “There are no immediate plans for rolling out any new programs, but we are always looking for opportunities to meet the needs of our customers.”