Four Questions With … John Bonner

Four Questions With … John Bonner

As part of our State Of The Industry report, we asked industry leaders to answer questions about the state of all things greenhouse floriculture. John Bonner, general manager of Eagle Creek Wholesale in Mantua, Ohio, shares his take on the state of the industry this week.

How would you describe the state of the greenhouse floriculture industry today?

The industry is in flux and going through some serious changes.

Has our industry entered a new era or paradigm shift? Please explain why or why not.

Yes, the new paradigm is one of accountability for making sure not only our customer is successful, but even more importantly, the consumer. This mantra is rippling back through the supply channels. Creating value also seems to be the law of the land today.

What are the greatest challenges growers are facing today?

Our greatest challenges are creating programs and products that are relevant to today’s consumer, have value in the eyes of that consumer and meet the profit objectives of the retailer. It’s not just about getting the plants out the door and letting the retailer deal with them. The correct answer is: Get the plants out the door to the retailer at the right time, in the right package, and at the right price point so the retailer is successful in utilizing their space in the most profitable manner.

What are the greatest opportunities for growers to build their business?

The current economy is challenging. But it has created great opportunity in that those who have positioned themselves by reinvesting in their business now stand to reap huge rewards.

It seemed like just a couple years ago there was some concern that there was just too much capacity out there serving the market. The mentality that “more is better” then shifted to “reduce the shrink, control variable costs and sell through.”

Today, there are businesses falling by the wayside that have not been able to weather the economic stress we are all facing. That puts those who have reinvested in their businesses in a very unique position–if only in the short term.

On the macro level, this economic environment is forcing people out of business and therefore aggregate supply is contracting. The good news is that same business environment is only marginally reducing the aggregate demand in the market. I see evidence of this, as last season galvanized my understanding that our industry has a low “beta,” meaning we are only moderately affected by changes in the economic business environment.

I suspect with the financial requirements of lending institutions today, that even solid businesses are not expanding fast enough (although they would like to) to replace the multitude of antiquated acres going under. Nor does it make much sense to buy greenhouses that are not efficient.

The net effect of all this should be one of higher prices, higher margins and a return to profitability. Banks want to see profitability, and they will lend to those companies that show they can repay their loans. The secondary effect of all this can be summed up in one sentence: Those companies that are in position right now with the right sales mentality and who also have modern infrastructure and systems are about to capitalize–big time.

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4 comments on “Four Questions With … John Bonner

  1. Has our industry entered a new era or paradigm shift? Please explain why or why not.

    Yes, the new paradigm is one of accountability for making sure not only our customer is successful, but even more importantly, the consumer. This mantra is rippling back through the supply channels. Creating value also seems to be the law of the land today.

    Yet in the next paragraph the customer success is not even mentioned as one of the greatest challenges.

    I suspect that wholesalers still don’t get it. It is not about the retailer it is about the end user. If you can’t make sure they are successful they go to a movie instead of using flowers.

    Let us be real. The % of total households using plants is going down. We are losing penetration, even with thousands of new Wal-marts, Home Depots, and Lowes and millions in marketing dollars.

    How about if wholesalers look at the characteristics of the plants they grow, and how they grow them.

    There is a lot of emphasis on more plants per square foot and short crop times. The emphasis is not on varieties that perform well for the end consumer. How about when bonsi or sumagic is applied to plants grown in the south at the southern rate and then those plants end up in a northern retail store.

  2. It is all about the end user.

    If they flop on their plants too many times they spend their money else where the following year.

    A wow plant one year is off the customers list the next year because it failed.

    Too many of those failures and we are out of work.

    A new variety just for the sake of being different can backfire if it flops for the customer.

    It is too bad to say but we have to have plants and presentations that bring more “goof proof” features or we are not going to bring more people into our market.

    As far as credit goes, if we would learn to function with out debt, we would grow for the customers and not for the bankers.

    I wish I had learned that years ago, it got me into big trouble.

    It is beyond me why the big are forced to get bigger, or why would anyone want “more” and “more”.

    How much steak can one eat.

    I’m not a socialist, but we seem to be creating a “socialist” business with fewer and fewer guys getting bigger and bigger and the mid to small guys getting forced out.

    Most are good growers too.

    We have survived so far because most of our plants “grow” when they get to the customer. They have had it with over PGR’d plants and they never realized what that meant.

  3. Has our industry entered a new era or paradigm shift? Please explain why or why not.

    Yes, the new paradigm is one of accountability for making sure not only our customer is successful, but even more importantly, the consumer. This mantra is rippling back through the supply channels. Creating value also seems to be the law of the land today.

    Yet in the next paragraph the customer success is not even mentioned as one of the greatest challenges.

    I suspect that wholesalers still don’t get it. It is not about the retailer it is about the end user. If you can’t make sure they are successful they go to a movie instead of using flowers.

    Let us be real. The % of total households using plants is going down. We are losing penetration, even with thousands of new Wal-marts, Home Depots, and Lowes and millions in marketing dollars.

    How about if wholesalers look at the characteristics of the plants they grow, and how they grow them.

    There is a lot of emphasis on more plants per square foot and short crop times. The emphasis is not on varieties that perform well for the end consumer. How about when bonsi or sumagic is applied to plants grown in the south at the southern rate and then those plants end up in a northern retail store.

  4. It is all about the end user.

    If they flop on their plants too many times they spend their money else where the following year.

    A wow plant one year is off the customers list the next year because it failed.

    Too many of those failures and we are out of work.

    A new variety just for the sake of being different can backfire if it flops for the customer.

    It is too bad to say but we have to have plants and presentations that bring more “goof proof” features or we are not going to bring more people into our market.

    As far as credit goes, if we would learn to function with out debt, we would grow for the customers and not for the bankers.

    I wish I had learned that years ago, it got me into big trouble.

    It is beyond me why the big are forced to get bigger, or why would anyone want “more” and “more”.

    How much steak can one eat.

    I’m not a socialist, but we seem to be creating a “socialist” business with fewer and fewer guys getting bigger and bigger and the mid to small guys getting forced out.

    Most are good growers too.

    We have survived so far because most of our plants “grow” when they get to the customer. They have had it with over PGR’d plants and they never realized what that meant.

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