Abandonment Or Revolution?

For more than 10 years, our industry has heard that we must change. The word “change” is probably used most often related to production or marketing our product.

The fact is that change is a continual process that happens whether we want it to or not. Many changes that occur are beyond our control. We must accept and adapt to them or reject them in order to do what is best for our businesses or ourselves.

We must remember that not all changes are for the better, and, in fact, many may drastically damage or destroy our businesses or our lives.

I’m a great fan of Tom Peters. I have most of his books, including “In Search of Excellence.” And I attended one of his seminars in Chicago in 1984.

Another book he wrote was “Tom Peters’ Seminar: Crazy Times Call for Crazy Organizations.” Peters wrote, “We must move beyond change and embrace nothing less than the literal abandonment of some of our practices that brought us to this point.” I believe we may have to revolutionize our businesses instead.

Reality Check

It is obvious we are in a depression, not only in the United States but in many other countries as well. Banks are failing. Businesses are going bankrupt. More than five million people are unemployed. There will certainly be a movement toward getting the most you can for the lowest cost.

For example, in Michigan, about 13 percent of the workforce is now unemployed. In the United States, the unemployment rate is about 8 percent. It should be obvious consumers will be looking to buy plants, both vegetables and flowers, at the lowest price possible.

Many retail stores that sell food have seen decreases in sales. Walmart, because it saves shoppers 15 percent on the typical cost of food, has still made a profit.
It has been documented that food purchases at all other supermarkets cost consumers $146 billion. At Walmart, consumers spent $124 billion for groceries for the same quantity of food. These figures are from Charles Fishman’s 2006 book, “The Walmart Effect.”

As the depression continues, I believe people who’ve lost 30 to 40 percent of their retirement income and those who are unemployed will seek ways to reduce costs. Food will still be essential, but many will start to grow their own vegetables again. This should create a great market for bedding plant growers.

Now is the time to help the consumer be frugal. We may even go back to the old Victory Gardens of the World War II era when people planted a garden to feed themselves and their families.

Resorting To The Past

We can help consumers grow their gardens with the right plants, accurate cultural information and even an outline of what the garden should look like to provide the food they need. Cornell University Cooperative Extension has a fine website on vegetables and how to grow them.

To help consumers be frugal, try offering them plants at a price that will allow them to produce vegetables at a savings of between 10 and 30 percent of what it would have cost to buy them at the supermarket.

I’ve seen one local garden center grow vegetable transplants in 32-cell flats, with eight packs of four plants each, for $10 to $12 a flat. The garden center allows customers to mix and match the plants in the flats so they get the vegetables they want to grow.

With this method, consumers could get 64 plants for less than $25, or they might buy four flats with 128 plants of their choice for $50 or less. The cost would be between 30 and 40 cents per plant.

The number of fruits per plant can vary, but, as an example, I went to the supermarket myself and paid $1 for one cucumber and $1.99 for one green pepper. With our plants and the proper knowledge, the consumer can reduce the cost of vegetables by about 50 percent.

I, however, believe you will see less demand for 1- or 2-gallon containers with one tomato plant or one pepper plant where the price is more than $5 per plant.
Part of Walmart’s secret to success is that it attracts customers with low prices. None of the top 15 items sold by Walmart sell for more than $3. This proves the small stuff matters.

Connecting Past & Present

There have been at least 10 economic crises since 1837. There is an excellent article about these events in the Feb. 16 edition of Newsweek. The most famous crisis, of course, was the Great Depression, which was precipitated by the 1929 stock market crash that wiped out $30 billion in five days. It took 10 years and World War II to recover from that crash.

The 1932 election ushered in the New Deal, the Works Progress Administration, Social Security, Fannie Mae, the Federal Deposit Insurance Corporation and the Securities and Exchange Commission. The government took control of the programs to put people to work.

We see the same approach by government today. The recently passed stimulus package and the previous bailout of financial institutions combined have more than $1.5 trillion of aid. Some banks and brokerage firms have gone bankrupt or have been sold to other institutions.

For a historical perspective, when the market panic of 1837 occurred, nearly half of the 850 banks in the United States failed, and we had seven years of high unemployment. This economic crisis was triggered by rampant land speculation and the collapse of a major bank.

I’m afraid the next few years will be difficult for everyone. I know a number of greenhouse businesses that are going or have already gone bankrupt. However, tough times will eventually pass. Strong growers will survive. Remember, life without friends, fellow growers and suppliers, and loyal customers is like a desert without an oasis.

Many of the older growers will remember Fred Gloeckner. In difficult times, when it was hard to get money from the banks to run the greenhouses, Gloeckner would come on sales calls and talk with the growers. He would help them decide what to grow and provide advice to help them out. He would say, “I’ll send you all the plants and seeds you need, and you can pay me when the plants are sold.”

For years after that, when times got better, many growers still bought from the Gloeckner Company because Fred was not just their supplier, but he was their bank and, most of all, their friend.

Take time now to know your friends. You may need to help them or they may need to help you. Set up a network of people who will help you survive the tough times.
And remember, the rich person is not the one with all the money, but rather the person who knows how to lead. I hope you have planned this season well and that you will prosper and stay healthy.    

Leave a Reply

More From Finance/Operations...

January 15, 2018

Missouri Greenhouse Grower John Tomasovic Dies

The patriarch of Tomasovic Greenhouses & Nursery, Inc. in Des Peres, MO, was a legend in the plant industry, and widely involved in many associations.

Read More

January 15, 2018

Perennials Icon Louis Stacy Dies

The founder of the former Stacy's Greenhouses in York, SC, passed away on Wednesday, January 10, 2018.

Read More
Charlie Hall Feature Image

January 9, 2018

AmericanHort Launches New Video Series on Profit Margin Management

This week, AmericanHort is kicking off a four-part video series that offers perspectives on managing profit margins from AmericanHort’s Chief Economist, Dr. Charlie Hall.

Read More
Latest Stories

January 15, 2018

Missouri Greenhouse Grower John Tomasovic Dies

The patriarch of Tomasovic Greenhouses & Nursery, Inc. in Des Peres, MO, was a legend in the plant industry, and widely involved in many associations.

Read More

January 15, 2018

Perennials Icon Louis Stacy Dies

The founder of the former Stacy's Greenhouses in York, SC, passed away on Wednesday, January 10, 2018.

Read More
Charlie Hall Feature Image

January 9, 2018

AmericanHort Launches New Video Series on Profit Margin…

This week, AmericanHort is kicking off a four-part video series that offers perspectives on managing profit margins from AmericanHort’s Chief Economist, Dr. Charlie Hall.

Read More
Tax-Money

January 9, 2018

What You Need to Know About the New Tax Bill

The United Fresh Produce Association, which represents the needs and interests of fruit and vegetable growers, recently updated its members on how the recent passage of the Tax Cuts and Jobs Act might affect their businesses. Many of the insights provided by United Fresh also apply to greenhouse growers and nurseries.

Read More
Doug Cole, Owner of D.S. Cole Growers

January 4, 2018

D.S. Cole Growers Blazes Its Own Path to Growth

Known for its commitment to sustainability and innovation, this grower is one of the pioneering trailblazers changing the way horticulture does business.

Read More

December 31, 2017

Ag Exemption for New Trucking Regulation Still Under Re…

The Federal Motor Carrier Safety Administration’s trucking electronic logging device mandate, which took effect on December 18, includes an Hours of Service exemption that may or may not apply to greenhouses and nurseries.

Read More
Tillandsia Air Plants (Plantiflor)

December 15, 2017

Bonsall Nursery Devastated By California Wildfire

Rainforest Flora lost its main greenhouses and outdoor growing property in the Lilac Fire in San Diego.

Read More

December 9, 2017

Southern California Wildfires Narrowly Miss Most Grower…

Here’s an update on horticulture businesses in the areas affected by the California wildfires.

Read More

December 5, 2017

Skagit Horticulture Builds New, Inclusive Business With…

By merging two large-scale producers, Skagit Gardens and Northwest Horticulture, the new company has realized its strengths through focused divisions that emphasize efficiency and success.

Read More

December 4, 2017

Raker-Roberta’s Young Plants Debuts as Roberta’s Finali…

On December 1, Eric Wallien of Roberta’s Inc. in Waldron, IN, officially purchased C. Raker & Sons in Litchfield, MI. The new identity of the company is now Raker-Roberta’s Young Plants, according to a Dec. 1 letter to Raker’s customers, suppliers, and business partners from Vice President Susie Raker-Zimmerman. “There have been minimal changes in management and we will be providing the same products and services on which we have built our reputation in the industry,” Raker-Zimmerman said in the letter, which also announced the name change and new logo. The sale of C. Raker & Sons was announced in September . A series of events affecting Raker’s financial situation caused the need for the operation to find an alternate solution. Roberta’s had been a customer of Raker’s since 2011, and the fourth generation, family owned grower-retailer was a fan of Raker’s commitment to quality. The agreement to purchase C. […]

Read More

October 10, 2017

Sharpen Your Skills in Cost Management and Profitabilit…

The University of Florida is offering a new online course on costing and profitability. The course will take growers through the process of how to accurately evaluate cost of production, labor efficiency, pricing, and equipment investment decisions.

Read More
Willoway Nurseries Team

October 1, 2017

How Willoway Nurseries Gets Its Staff Engaged in The Co…

Willoway Nurseries in Avon, OH, is creating a culture with people who think, act, and feel like owners. Learn how its team is taking the business to the next level.

Read More

September 21, 2017

Horticulture Is All About Connections

The beauty of our industry is that we are more than willing to reach out and help those around us. What connections can you make today to help your business, and what can you offer to help another grower?

Read More
Worker taking cuttings at Vivero Internacional.

September 11, 2017

Vivero Internacional Elevates Clean Cuttings to New Hei…

One of the last independent cutting operations, this fast-growing company raises the standard for delivering clean, high-quality unrooted cuttings.

Read More
Selecta Sponsor bed at Raker trial gardens

September 5, 2017

C. Raker & Sons Acquired By Roberta’s Unique Garden…

Ownership will change hands in December, and Raker will supply young plants for the 2018 season. Beyond that, leadership of the two operations say they are excited to move forward with a partnership that will continue to supply the industry, and gardeners, with top-quality plants.

Read More

August 1, 2017

MPS Honors D.S. Cole Growers for 10 Years of Sustainabi…

At Cultivate’17, a ceremony to mark a 10-year milestone since D.S. Cole Growers became involved with More Profitable Sustainability (MPS), as the first U.S. grower to achieve MPS certification, took owner Doug Cole by surprise. Separate celebrations also recognized Metrolina Greenhouses and Dümmen Orange for achieving MPS certification.

Read More
Nexus greenhouse construction for Knox Cannabis Facility

July 27, 2017

Ornamental Growers Will Revolutionize Cannabis Industry…

Professional growers have much to offer the emerging cannabis market, according to the co-owner of Knox Medical, one of the licensed cannabis producers in Florida.

Read More
Ball ColorLink logo

July 11, 2017

Get Guidance on Running Your Business from Ball ColorLi…

Representatives from Ball ColorLink will be on-hand at Cultivate’17 to answer questions and present business-building tools and industry insights to growers.

Read More