Greenhouse Industry Consolidation May Not Be A Bad Thing (Opinion)
In the year I’ve been with Greenhouse Grower, we’ve reported at least once a month on companies being merged with or purchased by someone else. Breeders, suppliers, growers — no area of the industry has been exempt. Agribio/Ecke, Griffin/Syngenta Hort, BASF/Becker Underwood and more. Just this morning, Rough Brothers announced they were consolidating Golden Pacific Structures’ product line.
Harder to report on are the number of businesses closing or declaring bankruptcy: Elzinga Hoeksema, Ellison’s, XS Smith, Kerry’s. It’s a sign of a maturing industry, experts say, and no doubt they’re right. In some cases that process has been accelerated by a struggling economy.
We wanted to know what the industry at large thought of this trend, so we posed the question in our annual State of the Industry survey late last year. (For the full report visit GreenhouseGrower.com/March2013.)
Not surprisingly, the question elicited some strong opinions on both sides.
“I think the buying-up or merging of companies is a negative,” says Preston Cox of Perennial Favorites Nursery. “It reduces competitive pricing, resulting in higher prices.” Cox spoke for nearly half of the respondents, who also had a negative view.
“Competition is essential both for professionals and consumers,” says Erik Jacobsen of Parkway Gardens. “It drives innovation, keeps pricing fair and encourages diversity. Lack of of competition leads to stagnation, higher prices and lack of selection.”
A smaller percentage of growers (29 percent)took a more philosophical view, saying the change is inevitable and can be beneficial, even for smaller growers.
“If you have a passion for your plants and grow better quality, you will have a niche. You will fill the void of the big boys,” says Barry Ritter, of Ritter Horticultural Service. “Keep a great attitude and build a great relationship with your customers.”
“That’s capitalism,” says David Vos of Vander Giessen Nursery. “We shouldn’t have a problem with it. It can be disconcerting to see long-time, family-owned businesses swallowed up, but if we regulated against it, we would see less innovation, more stagnation in business and generally more apathy toward success. Ultimately, it’s a positive.”
What do I think? I’m not someone who loves change, but I do believe strongly what Eckart Tolle says in A New Earth: “The most rigid structures, the most impervious to change, will collapse first.”
The change in our industry is inevitable. It is happening. But those who adapt to it the fastest will find a way to make it work for them and become successful in a new way.