Using Distribution Hubs

Using Distribution Hubs

Producing a quality plant is just the first step. Finding an efficient and cost-effective way to get that quality plant from the greenhouse to the customer is something else entirely. A number of growers have responded by using distribution hubs to control delivery costs, get plants to their final destination in better shape, and in some cases, open doors to new opportunities and markets.

Delivering New Relationships
EuroAmerican Propagators’ efforts to refine its shipping schedules will most likely lead to improved deliveries for its propagation facility, as well as a number of fellow propagators in Southern California this spring. Rich Ouellet, EuroAmerican’s director of marketing and sales, says the Euro Transportation Team, led by manager Kenny Soles, spent a great deal of time over the last several months sorting through delivery records and building a historical picture of its last five years of orders. EuroAmerican used the information to develop a new shipping schedule that would allow it to make more cost-effective deliveries to different regions of the United States, with trucks as close to full as possible.

An added step was needed to help the new system reach its full potential, however. EuroAmerican reached out to other Southern California propagators that might be willing to combine deliveries and help them reach that “fullest trucks possible” threshold on some loads. They found a number of takers.

This season, the company is hoping to serve as a delivery hub for several area propagators including Plug Connection, First Step Greenhouses, Paul Ecke Ranch, Ball Tagawa Growers, Greenheart Farms and Pacific Plug & Liner.

Ouellet says EuroAmerican will handle all logistics to guarantee order fulfillment throughout the entire process, going out to these partner propagators and collecting the plant material in its trucks, consolidating orders at the EuroAmerican facility, and shipping them from there.

While the company has worked with some of these growers on an ad hoc basis in the past, the process will be more formal going forward. Ouellet says EuroAmerican is investing in better trucks and planning to use tandem drivers to get orders delivered as quickly as possible, which will also improve quality.

“We used to do much more subcontracting with places like California Overnight or FedEx, but by adding the extra volume, we can do more on our own trucks. It’s more cost effective and we can control our quality much better,” he says.

Modernizing An Old Model
These delivery hubs don’t have to be new partnerships. Sometimes, old partners can find benefits in a new approach.

The Kalamazoo Valley Plant Growers Cooperative is one example. This group of Michigan growers has been collectively marketing annuals for four decades. Two years ago, however, the co-op essentially shut down its flower sales division and formed an LLC named Kalamazoo Flower Group. In this new structure, Kalamazoo Flower Group buys plant material wholesale from the co-op’s grower members and then sells it to retail customers. All members share in the success of the LLC.

To facilitate buying and selling all that plant material, Kalamazoo Flower Group invested in a 40,000-square-foot distribution center. “The majority of the plants we need to fill orders are brought to one location. Our crew is there compiling trailer loads and organizing them into larger orders for our customers,” says General Manager Chad Underwood.

The new organization offers a number of ways to increase business. First, it provides the ability to grow by taking more product to market by increasing production with member growers, and bringing in new growers as needed.

Next, because Kalamazoo Flower Group is a buyer and seller of plants, it can expand its offerings beyond the annuals its members typically grow–perennials and shrubs, for example. “We can essentially buy from anyone interested in working with us,” Underwood says.

Finally, it offers the opportunity for less traditional ideas. “Right now the focus is on our core, which is live plants, but I think it could extend to some other categories,” Underwood says. There’s no reason to think that in the off time of year we couldn’t use our facility and our trucking logistics knowledge to distribute other items or even work as a freight consolidator for growers in the Midwest. It could become a secondary revenue source used to offset overhead with the aim of helping keep our prices low.”

Existing Partners, New Opportunities
Lucas Greenhouses in Monroeville, N.J., is a more traditional operation than the Kalamazoo Flower Group. Still, owner George Lucas says he has found that serving as a distribution hub for a few of his fellow growers allows him to deliver better quality plants and come up with shipping savings that benefit everyone.

Lucas does quite a bit of production for other growers, and backhauling their plants following his deliveries to them helps fill his empty trucks. That cuts transportation costs for Lucas Greenhouses, and provides a cost-effective shipping option for those growers.

Lucas has a longstanding relationship with Gro’n Sell, for example. He does some growing for them and, because Gro’ n Sell doesn’t have trucks of its own, Lucas helps it ship plug liners, rooted cutting liners, and perennials. The arrangement helps both companies fill orders in areas they might not normally be able to afford to send a truck efficiently. Lucas has a similar arrangement with Pleasant View Gardens in New Hampshire, and works with Peace Tree Farm in Pennsylvania to help deliver some of its product as well.

The company now has material from other growers in approximately 20 percent of its shipments. In addition to the savings, Lucas says these arrangements help him maintain the high quality of the plants until they reach their final destination. By combining product from multiple locations he is able to get more orders on trucks and out of FedEx boxes.

“We stress trying to get product on a truck,” Lucas says. “You know when the delivery’s going to happen. It’s refrigerated or heated from my door to the door of the customer because all of my trucks have reefer/heaters on them, so the quality of the plant is so much better too.”

The arrangement is a win-win for both the growers and their customers, Lucas says. “That’s my philosophy for everything we do. Offering this makes us better partners.” 

Leave a Reply

More From Finance/Operations...
Ball ColorLink logo

July 11, 2017

Get Guidance on Running Your Business from Ball ColorLink at Cultivate’17

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
Lean Consortium in Washington

July 10, 2017

Washington Growers Join New Horticulture Lean Consortium

The group of growers has committed to learning and applying the principles of Lean, a method for eliminating waste that results in more value to customers delivered at a lower cost, in a shorter time, with fewer defects and less human effort.

Read More

April 11, 2017

Jerry Halamuda of Color Spot Nurseries Retires

The co-founder of Color Spot Nurseries has retired, effective immediately, and has named a replacement.

Read More
Latest Stories
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
Lean Consortium in Washington

July 10, 2017

Washington Growers Join New Horticulture Lean Consortiu…

The group of growers has committed to learning and applying the principles of Lean, a method for eliminating waste that results in more value to customers delivered at a lower cost, in a shorter time, with fewer defects and less human effort.

Read More

April 11, 2017

Jerry Halamuda of Color Spot Nurseries Retires

The co-founder of Color Spot Nurseries has retired, effective immediately, and has named a replacement.

Read More

March 21, 2017

How Greenhouse Vegetable Growers Can Prepare for a Prod…

The United Fresh Produce Association is holding a Recall Ready Workshop in April that is designed to help growers properly manage a recall, from liability to communications.

Read More

March 14, 2017

Expanded Customer Footprint, E-Commerce, Succession Key…

Costa Farms' acquisition of indoor foliage producer Delray Plants rocked the industry, but the story behind Delray Plants' sale is the same as for many growers struggling with succession planning. For Costa Farms, the strategic purchase expands its customer footprint and also fast tracks its foray into e-commerce.

Read More

March 10, 2017

Costa Farms Expands With Purchase of Indoor Houseplant …

Costa Farms annnounced March 10 that it has acquired Delray Plants, one of the leaders in the indoor houseplant industry. The two operations are committed to the same values, principles, and goals to grow the industry, and will fit well together to accomplish this, say Randy Gilde, CEO of Delray Plants, and Joche Smith, CEO of Costa Farms.

Read More
Ken and Deena Altman

March 7, 2017

Altman Plants in Escrow to Purchase EuroAmerican Propag…

Ken Altman, a co-owner of Altman Plants based in Vista, CA, has confirmed that the operation is currently in escrow to purchase EuroAmerican Propagators, the Bonsall, CA-based young plant and finished plant grower that filed Chapter 7 Bankruptcy on Jan. 23, 2017. Ken and Deena Altman are co-owners of Altman Plants and The Plug Connection, along with their son Matthew, who has recently bought into the family business. The 55 acres of land and all of the facilities on it, which were previously owned by Jerry Church, a partner in EuroAmerican Propagators, are part of the purchase agreement currently in escrow, Altman says. However, it would not be absorbed by Altman Plants, which in 2016 was number 3 on Greenhouse Grower’s Top 100 Growers list with more than 11 million square feet of environmentally controlled greenhouse production, 62 acres of shade production, and 400 acres of outdoor field production. Altman Plants’ property […]

Read More
EuroAmerican Propagators Greenhouses

February 14, 2017

Suppliers Comment on Plant Genetics’ Fate After EuroAme…

Since the operation’s bankruptcy filing on January 23, 2017, suppliers associated with EuroAmerican Propagators have updated Greenhouse Grower on what the operation’s bankruptcy means for them – and how it will impact grower customers.

Read More
Stephanie Whitehouse

January 17, 2017

Stephanie Whitehouse Takes Her Passion for Plants to Di…

Stephanie Whitehouse, who has spent the last seven years as the Sales and Marketing Director for Peace Tree Farm in Kintnersville, PA, recently joined Dickman Farms Greenhouse and Garden Center in Auburn, NY, as the company’s new Retail General Manager.

Read More
Laura Drotleff

December 6, 2016

Are You Driving Young Growers Away? [Opinion]

In a time when the industry is facing a critical shortage of both labor and skilled, educated growers, it's important that grower operations don't unwittingly turn candidates off to a career at their business or in the industry in general. Take a closer look at your hiring practices to ensure you are being inclusive and not breaking any laws.

Read More
Trays move on an overhead conveyor to the end of the production line, where workers carefully pack the cleaned, sized, graded, counted and sorted Calla tubers

November 29, 2016

Texas Judge Halts Overtime Rule; Here’s What It Means F…

According to Craig Regelbrugge at AmericanHort, the injunction against the overtime rule is welcome news for horticulture.

Read More
Craig Regelbrugge, senior vice president of AmericanHort - Feature image

October 25, 2016

Contribute To HRI To Help Honor Industry Advocate Craig…

In honor of Craig Regelbrugge's extraordinary contributions to the horticultural industry, AmericanHort and the Horticultural Research Initiative created a special HRI endowment fund in his name: "The Craig Regelbrugge - Advocates for Horticulture Fund."

Read More
Lucas Greenhouses Shipping

October 6, 2016

Greenhouse Shipping Costs Down, But Concerns Remain

Lower gas prices have led to lower shipping costs for some growers, but many continue to seek out ways to become more efficient.

Read More
Pansy ‘Cool Wave Blue Skies’ (Wave)

September 20, 2016

PanAmerican Seed Settles Alleged Trade Sanction Violati…

PanAmerican Seed, a division of Ball Horticultural Co., has been charged with violating trade sanctions to Iran over a number of years. According to a release from the U.S. Treasury department, PanAmerican Seed made 48 indirect sales of seeds to two Iranian distributors. The company shipped the seed to consignees based in countries in Europe and the Middle East. PanAmerican Seed’s customers then arranged for the re-exportation of the seeds to Iran. The release states that the Office of Foreign Assets Control (OFAC) determined PanAmerican Seed did not voluntarily self-disclose the alleged violations to OFAC, constituting an egregious case. “We believe that the settlement was extreme; however the alternative was to litigate with the U.S. government, which would take months, if not years,” says Todd Billings, Chief Financial Officer for Ball Horticultural Co. When asked what Ball Horticultural Co. has done to ensure that violations to trade sanctions do not […]

Read More
young-plants

September 20, 2016

The Top Young Plant Growers, And Four Critical Challeng…

In Greenhouse Grower’s 2016 Top Young Plant Growers Survey, growers discuss the latest challenges and opportunities in fulfillment, shipping, labor, and crop protection.

Read More
Cavicchio Greenhouses

September 6, 2016

Cavicchio Greenhouses Wins Inaugural Sustainability Awa…

The Sudbury, MA, growing operation sustains more than 250 acres of annuals, perennials, and nursery stock, with a number of practices to mitigate its impact on the environment.

Read More
Charlie Hall Feature Image

September 6, 2016

10 Insights From Charlie Hall’s Green Industry Economic…

With the uncertain current economic climate, Texas A&M economist Charlie Hall says now may be the perfect time to invest — as long as you do it smartly.

Read More
Penn State Plant Bud

August 23, 2016

AmericanHort Is Helping Plant Importers Adjust To New R…

A report from Craig Regelbrugge at AmericanHort says the government is implementing a streamlined system for imports, in which all required data will be submitted electronically through a single window.

Read More