Change Is A Good Thing

Change Is A Good Thing

Our industry has always felt changes in certain areas over others, but over the last three years we have entered into more collective rhetoric than ever. The rhetoric is probably driven by more obvious high-impact results than we have experienced in the past. The results of change have been eye opening because the No. 1 result has been the loss of greenhouse businesses at a rate we have never before seen.

According to USDA, the number of grower businesses has declined every year since 2001–a clear sign of industry change.

What Happened?

The retailers took charge and now make the decisions growers used to make. Many growers are mad and would like to return to the “good old days,” but that isn’t going to happen. While the retailers took charge, they also provided more retail selling space than we could ever have envisioned, creating more than 100 million square feet of selling space since 1980. We should love these guys.

In the 1980s and ’90s, it was one big party with rapidly growing demand for bedding plants and perennials, great margins and little price pressure. Then, in the late 1990s, national retailers got very serious about a new topic–”supply chain management”–and things rapidly changed as we entered a new era of accountability. Retailers developed sophisticated tools for measuring vendor performance, and they called the industry to task in areas of gross margin, same store sales, year-over-year comps–and, of course, cost of goods.

The grower community split into two factions. One faction stood by the old traditions of “grower in charge” and fought changes instituted by the retailers. The second adopted the philosophy of “we have to figure out how to serve these customers profitably or find new customers.” The group that fought change has been most negatively affected by change.

As retailers consolidated their supply base with fewer but larger suppliers, they have come to expect higher levels of performance. High performance does not simply mean growing quality goods. Quality is not measurable and, therefore, cannot be defined except in terms of sales velocity, gross margin and the quantity discarded. Get those numbers right and you have quality.

In determining the number of growers serving the three largest national retailers, my estimate is 135 provide all the annuals, perennials and vegetables. And that number is down from 350 to 400 growers in the 1990s. Many former vendors have become successful contract growers, some sought out other channels of distribution and, of course, some are out of business.

Those who remain as vendors will become more than just good growers. They’ll become good business operators who provide products retailers want and consumers embrace.

Serving the national retailers has driven many changes in the industry and will drive more in the future, as vendors become increasingly accountable for sales, gross margins and discards.

Distribution

Distribution is usually the second biggest cost for growers, and it’s one of the most difficult costs to manage because of the complexities that include high fuel costs, investments in distribution carts and equipment, declining value per cart and smaller but more frequent deliveries. (Cart value decreases as the demand for larger containers increases.) With fewer vendors, the existing vendors are servicing more stores and servicing stores that are far away from their production centers.

Information Systems

Growers need sophisticated information systems in order to have quick, accurate information available to all who need it. The information system can be in the form of a merchandiser in the field, a salesperson preparing for a customer presentation or a distribution manager tiring to compute cost of a route. Accurate information in real time is a must.

Replenishment software is the next level of information needed to ensure the right products are on the shelves at the right time. Manual processes are time consuming and very inaccurate, so reliable replenishment software will save time, money and be a major contributor to the reduction of discards.

Category Management

Vendor managed inventories (VMI) will ultimately lead to total category management (CM) at certain retailers. I have seen some instances of it already happening in selected areas. CM is a system where one vendor manages the entire green goods category and is responsible for all vendors in the category. It is far more complex than VMI as we know it today, and there are few who are equipped to mange the complexities of Category Management.

New Products

It is amazing after attending the California Spring Trials each year to see what is on the retail shelves the following spring. Usually, you have to search many retailers to find any of the great new products launched at the trials. New products are the lifeblood of business and without them the price conversation becomes the major topic.

Have you ever wondered why you see certain brands at the national retailers? It has occurred to me that very few vendors have developed or are interested in developing a new product pipeline that keeps retailers and consumers interested. As a result, we look for more outside influences to drive product decisions, and those decisions are passed down to the growers.

We all view change differently but it is inevitable and will continually impact how we do business. Those who always benefit from change are those who look at it as an opportunity and not a threat.

Leave a Reply

More From Marketing...
NGB Year of the Tulip

December 23, 2017

How You Can Participate in Promoting National Garden Bureau’s “Year of the” Crops

Promotional materials for the National Garden Bureau’s four “Year of the” crops for 2018 are now available. The materials are designed to help growers and garden retailers encourage consumers to discover and embrace new, exciting crops each year.

Read More
Petal-it-Forward

October 3, 2017

October 11 is Your Chance to Petal it Forward

The Society of American Florists’ “Petal it Forward” campaign returns in 2017. Learn how you can participate in this day of spreading kindness through flowers.

Read More
Micandy Gardens Team

September 17, 2017

4 Ways Micandy Gardens Greenhouses Reaches Out to Millennials

Micandy leverages social media to get the word out about its products and spread the word about how flowers can make a difference in people’s lives.

Read More
Latest Stories
NGB Year of the Tulip

December 23, 2017

How You Can Participate in Promoting National Garden Bu…

Promotional materials for the National Garden Bureau’s four “Year of the” crops for 2018 are now available. The materials are designed to help growers and garden retailers encourage consumers to discover and embrace new, exciting crops each year.

Read More
Petal-it-Forward

October 3, 2017

October 11 is Your Chance to Petal it Forward

The Society of American Florists’ “Petal it Forward” campaign returns in 2017. Learn how you can participate in this day of spreading kindness through flowers.

Read More
Micandy Gardens Team

September 17, 2017

4 Ways Micandy Gardens Greenhouses Reaches Out to Mill…

Micandy leverages social media to get the word out about its products and spread the word about how flowers can make a difference in people’s lives.

Read More
Costa Farms Exotic Angel Idea Book

September 12, 2017

Costa Farms’ New Lookbook Offers Consumers Ideas on Bes…

The new “Bring Your Home to Life” lookbook is a curated collection of more than 300 unique plant varieties best suited to grow in homes and offices.

Read More
Certified American Grown Flowers

September 5, 2017

Certified American Grown Flowers Names New Third-Party …

The organization’s new partnership with Where Food Comes From Inc., an agriculture-focused certification company with more than 20 years of experience, will be launched via video conference on September 14.

Read More
Container Gardening

September 5, 2017

14 Consumer Gardening Trends That Have Stood the Test o…

In early September, the Garden Media Group will unveil its 2018 Garden Trends report. To whet your appetite, here’s a look back at several trends that remain relevant today.

Read More

August 29, 2017

Know Your Grower: New Platform Brings Consumer Transpar…

The new Follow Your Flower or Plant vignette from MPS allows consumers to learn all about the producers of the plants and flowers they see at retail, and how sustainably their products are grown.

Read More
green-plan-it-gardening-outdoor-nature-explore-classroom

August 29, 2017

First-Of-Its-Kind Federal Grant Designed to Stimulate C…

The National Initiative for Consumer Horticulture has received a USDA grant to help develop strategies and tactics to grow the practice of gardening 20% by 2025.

Read More
Luxfloraflowerrun17

July 20, 2017

Luxflora Attracted Even More Participation to its Secon…

More than 170 runners kicked off Cultivate'16 on Sunday, July 16, with Luxflora's second annual 5k race. It was a great way to start the week, participants said.

Read More
National Garden Bureau 2018 Year of the Calibrachoa

July 15, 2017

National Garden Bureau Announces Featured Plants for it…

Plant classes recognized include bulb crops (tulip), annuals (calibrachoa), vegetables/edibles (beet), and perennials (coreopsis).

Read More
cut flower arrangement

July 5, 2017

Congress Designates July as American Grown Flowers Mont…

Last week, Congressman Salud Carbajal (CA-24) introduced a bipartisan resolution designating July as “American Grown Flowers Month.” Co-sponsored by Rep. Jamie Herrera Beutler (WA-03), Rep. Jimmy Panetta (CA-20), Rep. Duncan Hunter (CA-50), Rep. Chellie Pingree (ME-01), Rep. Don Young (AK-1), Rep. Jared Huffman (CA-02), and Rep. Darrell Issa (CA-49), House Resolution 413 declares July as the month to celebrate the economic and cultural impact of America’s cut flower and greens farmers and demonstrate Congress’ commitment to support America’s flower farming families. Congressman Carbajal spoke from the House Floor, introducing the legislation and encouraging fellow members of Congress to support American Grown Flowers Month. “I have seen firsthand the value the grown flower industry adds to our economy and communities during my visits with our Central Coast growers,” said Rep. Carbajal. “California produces three quarters of all cut flowers grown in the United States. I am committed to recognizing their contribution […]

Read More
PlantHaven Team 2017

July 2, 2017

PlantHaven Wins Medal of Excellence Award for Marketing

After 20 years of making the world a more vibrant, colorful place, PlantHaven wins Greenhouse Grower’s Medal of Excellence Award for Marketing for its groundbreaking ability to connect breeders, growers, and consumers through personable advertising campaigns.

Read More

June 1, 2017

Reimagining a Brand: How Did We Do With Greenhouse Grow…

Changing the design and content strategy of a brand isn't easy, but we think the new Greenhouse Grower will help carry our innovative industry forward and allow us to better serve your information needs.

Read More
NICH Plants Do That infographic feature

April 11, 2017

New Infographic Highlights Economic Impact of Plants

A new report from the National Institute for Consumer Horticulture shows how horticulture positively affects people’s lives wherever they live, work, shop, and play.

Read More
National Garden Bureau New Website

March 22, 2017

National Garden Bureau’s New Website Features Mobile-Fr…

The new site is designed to serve as a home base to drive traffic from NGB’s social media community to one central location.

Read More

March 7, 2017

Local Florists Celebrate Women’s Day and SAF Prom…

Florists across the U.S. are celebrating International Women's Day, March 8, and raising awareness for non-profit organizations. The Society of American Florists is raising its own awareness of what happens when women receive flowers with a new video for International Women's Day.

Read More
Savor New Website

February 16, 2017

Pleasant View Launches Updated Website for its Savor Ed…

The site is designed to offer a friendly and informative vehicle that delivers product information in an easy-to-navigate format.

Read More

January 24, 2017

Beekenkamp Plants B.V. to Take Over Marketing Sunny Ost…

Beekenkamp Plants B.V. will take over Sunny Holland B.V.'s marketing activities as of July 1, 2017, and begin offering Sunny Osteospermum to the supply chain.

Read More