Greenhouse Grower GROW Summit 2018 participants talked through complex issues in the industry during the two-day event held November 27-28. With several top industry players in the room, the high-level discussions ranged over many topics, but some common themes seemed to stand out — labor and the need for growers to raise their prices.
Labor Strategies and Solutions
Managing Editor Janeen Wright gave the group a sneak peek at the December 2018 issue of Greenhouse Grower, which shares labor strategies and solutions gleaned from across the industry. She then led a discussion with the group to get their thoughts on the labor situation.
“We need to understand why we have a labor issue,” said one participant. “Are people really not interested, or have we not properly communicated the value proposition? Raising salaries isn’t always the answer to the problem.”
“Capacity, efficiency, and sustainability are the ways forward,” said another attendee. “We’ll have to reduce capacity if there’s not enough labor to support it. We need investment in new technology, and plant prices have to go up. The market has to embrace the fact that people will have to pay more for plants.”
“There are other enticements for working in the industry besides salary,” said a grower participant. “Look into training middle management on better ways to communicate and work with employees. Find other ways to keep people around besides just paying more.”
Reducing Grower Operation Failure
The group also delved into a discussion, led by Editor Laura Drotleff, about why growing operations fail. Drotleff shared some sobering statistics with the group about growers and suppliers who have filed for bankruptcy, sold operations, or closed their doors for good. She pointed out that there might be a correlation between these events and the dramatic cost increases over the past 10 years, relative to the lack of price increases for plants.
The group considered whether growers closing their doors and companies consolidating were good or bad for the industry and what could be done about it.
“In order for us to raise prices, some growers will need to go out of business so we aren’t overproducing,” one participant said. “Right now there is a glut of product out there.”
We Need to Raise Prices
Subsequent conversations during the Summit turned to costs and the need to raise prices to offset rising costs for growers. The attendees had quite a bit to say on the matter.
“We need to raise prices, but we need to add value for the consumer to make them willing to pay for it,” said one participant.
One grower said its customers asked for was small price increases over time, to get consumers used to paying more for plants.
Another attendee agreed, saying it’s important for growers to make their customers aware of the quality and value they offer that would be hard to replace if they go out of business because they can’t raise their prices.
“You don’t have to increase prices across the board,” he said. Do it strategically on different products or categories each year.”
It All Comes Back to Communication
The consensus among GROW participants was that growers and suppliers need to improve in communicating their value, not only to the mass public, but also to their immediate customers, such as buyers. Some of the suggestions for doing this included offering information on negotiation training, coordinating between marketing and sales to craft a story and develop message points, being more transparent in how we produce crops, and knowing what your service to retailers really means.
“We need to communicate the risks and challenges of production to buyers,” said an attendee. “Some people make it a badge of honor not to raise prices, and not enough growers know the price of what goes into each pot. Start by knowing the value of your product, and communicate that to your buyers.”
GROW Summit has wrapped up for another year, but the group plans to continue its discussions during 2019 to determine what it can do to build up the floriculture industry and help it thrive.