Finding The New Normal

There’s a saying, “Insanity is doing the same thing over and over and expecting different results.” Well, I’d argue a lot of growers and retailers are doing the same things over and over and hoping for past results. The years and seasons go by, but the glory days just aren’t returning by using old strategies.

Look at what happened to Nurserymen’s Exchange in Half Moon Bay, Calif., which filed for Chapter 11 bankruptcy protection and was then purchased for only $4 million, just enough to cover debts. (See page 12.) Fortunately, the buyer – Rocket Farms’ parent company, Monterey Peninsula Horticulture – is doing well in the blooming potted segment and diversified in its crops and customer base.

For decades, Nurserymen’s was on top of the world as the leading blooming potted plant producer and rewholesaler serving supermarkets. The company was innovative in developing new products and presentations and established the Bloom-Rite brand. But large growers who have relied primarily on that market channel haven’t been faring as well.

Traditional supermarkets have been consolidating and losing ground as the place for the public to buy groceries. They are competing against Walmart, Target, discounters like Aldi and wholesale clubs like Costco. Even drugstores and convenience stores are expanding their food offerings. Growers who serve supermarkets say the floral buyers just aren’t buying the numbers of plants needed to make an impact with promotions. As a result, fewer plants get sold and it beomes a self-fulfilling vicious cycle.

I can’t help but wonder if Nurserymen’s failed to change the model that had served it so well for so long to respond to shifting retail markets. This shows any business is vulnerable if it loses its edge.

Finding The Path To Profitability
Growers came to the OFA Short Course looking for solutions this summer. Cost accounting and profitability sessions were very well attended. Peter Konjoian presented an excellent session, “Analyzing Opposing Profitabilty Strategies – Selling Out or Growing Long?” For 10 years he has been conducting research with wholesale and retail growers to determine which strategy is better. He created tables that show what happens to price and profit when growers meet 70 percent of demand or overproduce and meet 130 percent, as well as the whole spectrum in between.

Key Takeaways From Konjoian:
• Every plant not sold erases the profit from 2.5 plants sold.

• Don’t overproduce low-margin crops. Sell out of the takers and grow more of the makers.

• Grow less of what everyone else grows and more of what no one else grows.

• Don’t cling to crops too long. Stay ahead of the commodities curve and always be on the lookout for the next profitable crop.

During the OFA town meeting examining “Why Don’t Our Customers Love Us Anymore?” an industry consultant said part of the problem is we’re still just growing and selling plants. We’re not marketing the benefits of our product or what the customer wants to buy – beauty, convenience, wellness and ambience. We need to make plants fun instead of a hassle to take care of all summer.

One of the best and simplest ideas shared was why don’t we make spring our Christmas and provide that level of marketing and merchandising to get customers in the stores? To some extent the box stores are doing this with spring black Fridays. But the focus is on price, not the excitement that surrounds Christmas.

Last but not least, we need to look at other lifestyle industries that are engaging consumers – fashion, food, wine and music – and reinvent our category and be more innovative.

Leave a Reply

Latest Stories
Ever Bloom Robot Sprayer feature

January 23, 2017

New Automation Systems Improve Spraying and Harvesting

In response to increasing regulations on labor, Ever-Bloom Inc. decided to invest in new automation technology that also dramatically improves efficiency.

Read More
Youngs Plant Farm Trial Garden feature

January 21, 2017

Don’t Miss the Southern Garden Tour This June

Growers, retailers, and all industry professionals are invited to the 2017 Southern Garden Tour, which is hosted by Young’s Plant Farms, Sakata, and Metrolina Greenhouses, and will be held June 6-8.

Read More
Gaillardia 'Mesa Red'

January 21, 2017

2016 Pike Creek Horticulture Center Field Trials Result…

Check out the 2016 field trials results for The Pike Creek Horticulture Center in Kenosha, WI.

Read More
Anna Chernyavsky

January 20, 2017

New Director of Sales for Bedding Plants and Perennials…

Anna Chernyavsky, who joined Danziger in August 2016, will be in charge of the U.S. and United Kingdom markets.

Read More
Workplace Trends

January 20, 2017

10 Trends Predicted to Impact the Workplace in 2017

Here are 10 workplace trends that Forbes contributor Dan Schawbel predicts for 2017 that may change the way you do business in the future

Read More
Hydrangea ‘Endless Summer BloomStruck’ (Bailey Nurseries)

January 19, 2017

Bailey Nurseries Hosting Spring Previews in February

The previews, which provide education, new variety information, and retail support programs, will take place in Illinois, Minnesota, and Boston.

Read More
Bouldin and Lawson Precision Needle Seeder feature

January 19, 2017

How You Can Get More Precise With Your Seeder

Bouldin & Lawson’s Precision Needle Seeder is designed to improve accuracy when sowing small, difficult seeds.

Read More
Selecta Sponsor bed at Raker trial gardens

January 18, 2017

2016 C. Raker & Sons Field Trials Results

Check out the 2016 field trials results for C. Raker & Sons in Litchfield, MI.

Read More
EFTE Film

January 18, 2017

Looking at Glass or Polyethylene for Your New Structure…

Ethylene Tetrafluoroethylene, also known as EFTE, is a fluorine-based material that looks like a standard polyethylene greenhouse film but offers high light transmittance.

Read More
Nadia Sabeh, CEAC

January 18, 2017

Upcoming Seminars to Focus on Managing the Greenhouse E…

The seminars, which will also be accessible online, are presented by the University of Arizona’s Controlled Environment Agriculture Center.

Read More
Spring Meadow Nursery Fire

January 17, 2017

Two Major Growers Recovering and Rebuilding After Fires

The blazes occurred at Dan Schantz Farm and Greenhouses in Zionsville, PA, and Spring Meadow Nursery in Grand Haven, MI. Both companies say no employees were injured, and they plan to pull together and stay on schedule for the remainder of the year.

Read More
Dallas Johnson

January 17, 2017

Dallas Johnson Greenhouses Owner Passes Away at 78

Dallas G. Johnson, who started the company in 1985, is survived by his wife, Kay, and two children.

Read More
Joe Cimino, Sakata Seed America

January 17, 2017

Sakata Seed Names New Senior Sales Manager for Ornament…

Joe Cimino comes to Sakata with past experience at Sun Gro and Florexpo.

Read More
JinPin Flower Seedling Company partners

January 17, 2017

Ernst Benary Partners With Chinese Young Plant Grower o…

The partnership creates a new company called Jinpin Flower Seedling Company, which will focus on providing young plants to the rapidly growing Chinese bedding plant market.

Read More
PC-31 Transplanter (Visser)

January 17, 2017

Visser NA Rebrands as Bellpark Horticulture

The new name will equally represent not only Visser, but all of the brands Bellpark represents, including Mayer, Logitec Plus, and Drygair in North America.

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

January 13, 2017

We Must Help Heal Our Nation, with Plants and Flowers […

No matter how you may feel — personally or professionally — about the outcome of the election, it’s likely that you realize our nation has some healing to do.

Read More
Effective pest control

January 12, 2017

Prevention and Early Intervention: The Keys to Biocont…

Advance preparation and starting out right helps you implement an effective biocontrol program that reduces pest pressure.

Read More