Don’t Underestimate The Value Of Post Harvest Quality At Retail
As I visited garden centers this fall looking at all the beautiful garden mums grown this year, I was reminded of one of my biggest professional pet-peeves: greenhouse plants that have been man-handled and crammed too tightly onto shipping carts.
The problem of overpacking plants on shipping carts is certainly not isolated to the fall, but I think the effects are made worse at this time of year due to the nature of mum branches that are so prone to breakage. Between the damage caused from the greenhouse crews during packing and the damage caused by teams at the store during the unloading process, the plant carnage can be downright devastating. Regardless of the season, it bothers me.
Good Presentation Equals Maximum Appeal On The Store Shelf And Better Sell-Through
Our industry has matured in many positive ways over the past couple decades, yet somehow we still fail to put much priority on making sure that the plants everyone works so hard to develop and grow remain intact and in their best possible form upon arrival at the retail store. We are doing ourselves a disservice when we allow our product to be presented to the public in any form less than our best quality.
Look around the next time you go shopping. It’s amazing to me the extent that other consumer goods companies will go to ensure their products arrive and remain intact on the retail shelves. I’m thinking about all of those plastic clamshell packages that toy companies use for their products, for example. They are often used in conjunction with rubber bands or those plastic-coated metal twist ties to keep the product perfectly in place as the marketing team envisioned. In fact, so many companies are concerned with product presentation on the retail shelves that overpackaging has become a real issue for many of them.
I remember one Christmas morning, spending a solid 30 minutes removing a doll and its accessories from the packaging for my daughter. The doll’s hair was sewn in place to the cardboard backing of the package. It was frustrating, but it left an impression on me on how important it was to the manufacturer that their product stay in place, exactly as they envisioned it, for maximum appeal on the store shelf.
The plants we grow are no different. I’ve walked hundreds of acres of mum fields over the years and have been impressed with the quality I’ve seen produced. I’ve then gone and visited the retailers supplied by the same greenhouses whose crops I’ve walked, and been disappointed in the quality of the mums. What was once a beautiful, perfectly shaped mum soon became a lopsided, broken mess after rough handling. It makes little difference to the buying public that the best genetics were grown perfectly by the best commercial greenhouse if, after all the care and time taken to do so, they are undermined by packaging and shipping decisions that mutilate the plants.
The Economics Of Shipping
I also don’t think the shipping economics of our business necessitate cramming plants onto shipping carts, even though I know that’s what is cited as the reason it happens so often. With respect specifically to mums, I’ve been guilty of making decisions that lead to this problem myself. After all, the value of a cart of mums is about half that of the average spring crop and the average number of carts shipped per delivery is less than that in the spring.
The reality is, commercial growers need to get as many plants on each cart as possible to adequately disperse the shipping cost per plant. However, in today’s world of pay-by-scan, guaranteed sales and markdown thresholds, sell-through at retail is king. It’s the number one metric that can most influence the bottom line. So let’s do a little math:
Assume a grower sells an eight-inch mum for a delivered cost of $3, and that 100 mums fit comfortably on the cart without the risk of damage, so it costs the grower $75 in shipping costs per cart. In this example, the shipping cost applied per mum is 75 cents.
Now, imagine that the same grower decides he can reduce his shipping cost per mum by forcing more mums on the cart, say 125. Sure, some might get damaged, but now the shipping cost per mum is only 60 cents. For the sake of this example, the grower ships 500 mums to the customer under both scenarios. In the first scenario, five carts would be shipped.
In the second scenario, four carts would be shipped, but it’s still 500 plants because that’s what the customer needs.
Let’s say that of the 500 mums shipped in the first scenario, the store sells 400 or 80 percent sell-through, and that is what the grower is paid for under a consignment or PBS arrangement. Based on my observations in the stores, I’m going to suggest that 10 percent of the mums on a cart that is overloaded become damaged and are unsaleable. So in the second scenario, 50 of the 500 originally shipped are lost and only 350 of the 500 mums shipped are ultimately sold by the store for a 70 percent sell-through. In scenario one, the grower is paid $1,200 (400 mums at $3 each).
In scenario two, the grower is only paid $1,050 (350 mums at $3 each). Despite the fact that the grower saved $75 in shipping costs, he brought in $150 less revenue for his cause, so the grower is $75 worse off as a result of the nearsighted decision to put more on his cart.
For the naysayers out there, let’s try this again, assuming that the damage due to the overpacked cart is just 5 percent. Instead of 400 mums being sold, now 375 are, so the grower is paid $1,125. This is $75 less than in scenario one and an exact wash with respect to his freight savings.
It’s just not worth it.
Our Industry Needs To Put Its Best Foot Forward
The buying public deserves to have a chance to buy all those beautiful mums as they appeared in the field, before all the damage caused during packing and shipping. It’s not good public relations for us as an industry to have less than the best on the retailer’s shelves. If we want people to buy more of our products, we need to show them we take pride in our work through each and every step in the process. Reversing the practice of carelessly packaging and shipping plants to their retail destination is one of the quickest things a professional grower can do to improve their sell-through performance at retail, and in turn, improve their financial bottomline.