For growers serving the box stores, the stakes have become too high to leave the daily execution of a season to chance. Risks and rewards have never been greater for growers serving The Home Depot, who are responsible for the entire assortment of plants selling through vendor managed inventory or pay by scan.
Based in Baiting Hollow, N.Y., on Long Island, Ivy Acres is in the ultra competitive Northeastern market surrounded by larger players. The company serves 56 Home Depot stores and was the first grower in the Northeast to provide merchandising services that were common in California and Florida. Now, Ivy Acres has been improving its performance internally by getting 200 employees focused on customer service from start to finish.
“We’re not growers anymore, we’re retailers, too,” says Ivy Acres President Brian Sullivan. “In the pay by scan world, you’re only paid for what sells. The merchandising service is really more than fixing plants on the shelves. It’s having adequate inventory. We do everything but ring up the cash register. If you take short cuts and put in inferior stuff, you’re going to go broke. We need to pay attention to having the right stuff at the right time.”
Owner and founder Jack Van de Wetering says pay by scan has been a tough, expensive learning curve. “Growers across the country are dropping out,” he notes. “Before, one grower vendor would provide 10 SKU’s to a store. Now, you have to be the whole answer. Consolidation is not the answer. There’s a point where you get too big and lose control. The farther away you are from a store, the less your quality is. Within four hours, we can be anywhere in our service area.”
Ivy Acres is making the commitment for the long haul, with plans to build seven more acres of greenhouses. Perennials are a growth category.
Legacy Of Leadership
Van de Wetering has been a leader in the bedding plant industry since he switched from tomatoes to annuals in the 1960s. He and his brother, Peter, were our first Growers of the Year in December 1985. Soon after that, Peter started his own business focused on plugs, Van de Wetering Greenhouses. Ivy Acres continued to flourish serving large retailers.
In equipment and technology, Ivy Acres was one of the first to develop and market an automated transplanter in the United States. Long-time employee Debbie Harrison’s husband Richard, an engineer, invented it. Ivy Acres also was among the first to use Dutch-style roll-out benches, for double cropping in the greenhouse and acclimating plants to outdoor conditions.
One recent innovation in shipping is adapting large trailers pulled by pickup trucks that can hold 19 carts and load easily on a ramp instead of lift gates. No special driver’s license is required, which makes more people eligible to drive.
Carts are attractively signed as they roll into retail. With 60 percent of plants being purchased off the carts, Jack believes in investing in the best retail presentation. He has developed premium multipacks that are consumer friendly with handles and keep Ivy Acres out of the commodities trap.
“No customer buys just one plant,” he says. “Instead of one 4 ½-inch zonal geranium, we offer them in three-packs, six-packs and eight-packs. Innovation is what drives the consumer and people like myself. Otherwise, things become stale.”
Ushering In The Next Generation
While Jack continues to be an idea guy, his children are taking on more responsibility running the business. Son Kurt is general manager and most involved in running daily production operations. Daughter Peggy is in charge of marketing and a landscape pickup site, Ivy Acres Wholesale Nursery, which serves regional needs for trees, shrubs, annuals and perennials. Son Stephen works as a software developer in Los Angeles.
As president, Sullivan is a bridge from one generation to the next while bringing new strategies. His specialty is developing processes for continuous improvement, which he learned working for Florida Power & Light in Miami and became a consultant in this field. Clients ranged from Chase Manhattan Bank, the U.S. government and Proctor & Gamble. Two in our industry are Yoder Brothers in Florida and Fernlea in Canada and Florida.
He came to know Jack and was recruited as Ivy Acres vice president of sales and marketing seven years ago. When he became president in September 2007, the Van de Weterings agreed it was time to implement quality control processes Sullivan had implemented elsewhere to make operations run more consistently.
“Having been the vice president of sales and marketing, I was seeing we had great stuff but kept stubbing our toe here and there,” Sullivan says. “I didn’t see consistency across the company meeting the customer’s needs. If you look at our business, it’s not a complex one at all. The six processes are linear. One starts while another ends.”
The six processes are:
• Sales – getting the right information back from the customer and market
• Production – transplanting the right varieties on schedule
• Growing – finishing the plants to the right quality specifications on time
• Fulfillment – picking the right products to specifications
• Shipping on time
• Merchandising at store level – the initiative began with training on continuous improvement and developing the company’s mission and vision. Sullivan brought in Leo Willenbacher of Ft. Myers, Fla. to facilitate. Three guiding principles Ivy Acres developed are:
• Focus on the customer.
• Manage with facts.
• Respect people.
“Discussions focused on what do customers want and what will they pay money for? The right product, right quality, on time, signed and a great mix,” Sullivan explains. “How do we make sure what we’re doing only impacts what the customer wants? Most of the processes are time or quality driven – getting the right product out.”
While keeping the ultimate customers in mind, employees learned they each had internal customers from one process to the next. Each employee now works in one of the six processes and each process has an owner.
“The next step is to document your process, get it down on paper with measures,” Sullivan says. “Is the process capable? Is it stable? Most were right but we just needed to tighten time frames and set a schedule. Once we got in a rhythm, we said, ‘Hey, it works. We’re getting done faster. The product is great and we’re getting great sell through.’”
Ivy Acres’ executive team meets each week to discuss the six core processes, what’s going right and needs attention. As general manager, Kurt owns four of the processes – transplanting, growing, fulfillment and shipping. Now the focus is making processes easier, cheaper and faster – essentially, Lean Flow.
The improvement in internal communications and focus on customer service has made a difference. “The big change was the movement of labor for completing larger tasks,” Kurt says. “People were compartmentalized and dedicated to departments. Now there is a greater transference of labor, which has reduced our costs. When I was in sales, not every department was focused on the retailer. They were doing their job but not focused on the end product. Now they realize if they do their job correctly, they will make things better for their next process customer and better for the retailer, which will result in better sell through.”