Growers Taking Charge
June 12, 2008 There are two rules of customer service. 1. The customer is always right. 2. If the customer is wrong, see rule number one. With all the challenges and pressures of energy prices, low margins, a rough economy and overproduction, growers need to differentiate themselves to get the attention of retailers. Some of the largest growers in the country are taking charge of their situations and the economic landscape to create new programs and products that help them maintain their own destinies.
“We must make it easier for the retail customer, even if it is harder for our growers,” says Charles Masloski of Hiebert Greenhouses (No. 72). “The plants must look healthier longer at retail stores, even if you are not doing pay by scan. Customers do not put man hours into lawn and garden as in the past, and they want their margins to be higher?”
Keeping Customers Happy
There are plenty of ways growers have worked to improve quality for their customers, including quicker or better product transport and availabilites tracking and innovative packaging and merchandising.
Of the Top 100 Growers who responded to our survey, 82 percent serve their customers through their own trucking fleet, and more than a quarter use GPS and logistics/tracking software to keep track of shipments. Cross-docking facilities, where goods enter through receiving docks, are sorted and then sent out through shipping docks, are utilized by 38 percent of growers.
Paul Ecke Ranch (No. 5) reports major advances in Web-based tracking technologies (see “Ecke’s Gone Techie,” page 14). Improved routing and load efficiencies help get product to market quicker, and are also credited by our Top 100 as ways to deal with higher fuel costs. Tagawa Greenhouses (No. 25t) and Nash Greenhouses (No. 98) cite Lean Replenishment or Just In Time techniques to meet customer needs. Christopher Bergen says his operation “lives and dies by our Vendor Scorecard,” which gives the operation the ability to flow product at the right rate.
In-Store Services
On the packaging and merchandising side, 84 percent of Top 100 growers say they provide point-of-purchase and marketing materials to retail customers. Both Wenke Greenhouses (No. 29) and Kurt Weiss Greenhouses (No. 2) say innovative packaging gives them an edge. Retail-ready packaging helps growers stand out from the pack.
“We grow over 275 gerbera varieties that we offer our wholesalers in a wide assortment of boxes,” says Sue Nagelmann, sales manager of fresh cut flower grower Ever-Bloom Inc. (No. 97). “We often pack them ‘retail ready,’ so there is minimal handling and less damaged flowers for our customers.” Seventy-seven percent of survey respondents say they deliver a branded product to their customers, and 42 percent say they provide in-store maintenance to their retail customers. Seven growers report they offer online availability updates.
Armstrong Growers (82), which supplies not only its own retail stores but supermarket chains, florists, brokers, warehouse clubs and other independent garden centers, sells product that is geared toward high-end retail, carving out a unique niche.
Labor Challenges
While making money is still the top concern for most growers today, 26 percent of our survey respondents say the top force affecting their businesses is labor availability. Forty percent say their businesses have been affected by labor shortages. Three-quarters say they’ve incorporated more automation to make up for labor shortages.
“Labor will continue to be in short supply and that is why we all need to continue to invest in labor-saving technologies,” says Steve Rinehart, COO of the Paul Ecke Ranch. Art Van Wingerden, COO of Metrolina Greenhouses (6), agrees. “Labor will
get much tighter, so we think the answer is to automate as much as possible.” Sixty percent of growers surveyed say they have implemented lean production techniques to keep up with production.
Growers also say they’ve increased wages (44 percent) and used labor placement services (19 percent) in response to labor shortages. Thirty percent say they just work harder to keep up with the workload and two operations have cut back production.
Labor shortages aren’t limited to production workers. Bergen’s Greenhouses (54) in Minnesota also reports shortages of truck drivers for the spring season.
Relying On The Government
Growers are depending on the government to put together a reliable guestworker program. “Why can’t our government adopt a guestworker program that works?” asks Todd Johnson, president of Dallas Johnson Greenhouses (24). “Because what they have now is a joke.”
“The immigration brouhaha is of great concern, and the bigoted, vitriolic rantings of Lou Dobbs need to be taken off the airwaves,” says Leonard Van Wingerden of Grower Direct Farms (90).
“It’s of utmost importance that we continue to allow documented legal workers to come into our country to do the jobs that spoiled Americans won’t do,” says Bob Barnitz, president and CEO of Bob’s Market and Greenhouses (92).
The largest greenhouses in the country take care to train the employees they have. More than half (53 percent) of growers offer their employees the opportunity to attend sessions at trade shows and conferences. University and Extension education are available to employees at 40 percent of the Top 100 Growers. Ever-Bloom Inc. also offers incentives for employees to attend English As A Second Language classes and receive the certificate of attendance.
Sustaining Business
In this year’s survey, we asked about sustainable production. The most popular products used by growers that would be considered environmentally friendly are energy curtains (83 percent), IPM program/biologicals (63 percent) and paper/plastic recycling (60 percent). When asked why they use sustainable products/processes, the most popular answer was personal responsibility, chosen by 77 percent of respondents. Forty percent say they’re going sustainable in response to a growing consumer trend, and 30 percent say they made the change because of demand from a retailer. “Sustainable” clearly does not mean “organic” to Top 100 Growers though, as 75 percent of respondents say they do not grow organic products. Fourteen percent say they do grow organic products and 11 percent are considering it.
But even with such a large number of producers adopting sustainable practices in one form or another, their attitudes toward the relative importance of these practices vary. The majority of survey respondents (45 percent) say sustainability is somewhat important to them, but 24 percent say it’s not important at all.
“We have always and will continue to do what is best for the environment,” says Ann Thompson of potted foliage grower Delray Plants (14). “Sustainability has been important to us for 20 years, not just today.” Delray Plants is actively seeking a sustainability certification, she adds.
While Bergen’s Greenhouses is also applying for a certification, and uses a wood-burning boiler and rice hulls instead of perlite in media, sustainability isn’t the biggest business concern. “More important is our ability to sustain being in business while operating on slim margins,” says Christopher Bergen. “We take necessary steps to remain a low-cost producer and remain competitive in the market.”
“We need to build a more responsible world in the 21st century so we have something worthwhile to pass on to our children,” says Ric Stevens of Nash Greenhouses. “We need to be accountable for our actions.”
“I’m concerned about the ‘top-down’ push for this aspect of my business, rather than a ‘bottom-up,’” says Leonard Van Wingerden of Grower Direct Farms. “This ‘green thing’ may make people feel good, but it does not necessarily translate into actually doing good.”
Overall, 39 percent of our survey respondents say they will be seeking a sustainability certification, 24 percent say they are actively seeking certification and one grower, B&H Flowers, is already certified to the VeriFlora standard. Several respondents say they have or will move to more environmentally friendly processes before they’re legally forced to through regulation.
“Although the consumer does not put too much pressure on floral products yet (compared to produce), either they or the government will demand it in the near future,” says Sue Nagelmann of Ever-Bloom Inc.
Growers shared plenty of opinions on the sustainability movement. See more of them at our Web site,
www.greenhousegrower.com.
Regarding business challenges of 2008, many growers are no longer relying on suppliers or customers to help them provide the best service and product to the market. Growers are now taking on more complex shipping, sophisticated production and product packaging and marketing to counter labor shortages and poor economic conditions, all while upholding rule number one of customer service – the customer is always right.
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