What Greenhouse Growers are Doing to Improve Profits
August 16, 2020 
Plant pricing is just one of the many ways greenhouse growers are keeping afloat in a turbulent marketplace stirred by coronavirus concern.
Photo by Carol Miller
It’s been a year of change for Greenhouse Grower, and not just because of the coronavirus. This year we broadened our focus to serve all controlled-environment greenhouse growers, regardless of what crop you grow. So, it was exciting to look over the results of this year’s State of the Industry survey, which includes input from growers across the controlled-environment community and different crop markets.
One question we like to ask on our surveys is what you did to improve profits. In Greenhouse Grower’s Top 100 Growers survey earlier this year, the majority response was “raised prices.” That answer was certainly one that growers taking the State of the Industry survey included in their responses as well. However, I noticed a change in growers’ answers this year. Look at these responses:
- “Increased yield through improved growing practices.”
- “Potted less but sold more, so lower shrink.”
- “Improved plant health.”
- “Streamlined the shipping processes.”
- “We got more efficient in all our standard operating procedures.”
- “Improved order fulfillment system.”
- “Dropped poor-selling SKUs.”
- “Tightened up production with some products.”
- “Controlled inventory better. Utilized space better.”
What is interesting to me is when I first started working on Greenhouse Grower, the talk was about price — the need to raise prices, the need to price products correctly, and so forth. While pricing is still a big component of profitability that some growers struggle with, it seems to me there has been more of a focus shift over the years toward improving and streamlining production practices.
It seems clear, too, that growers who take a holistic look at their operation to identify areas for improvement and then fine-tune areas they are weak in experience better success in the long run. In short, while the whole is more than merely a sum of the parts, the whole improves when the parts are well-oiled and running smoothly.
Controlled-environment growers are looking at pricing as only one part of the profitability equation. A highly competitive market has forced them to do so. Growers in the floriculture and vegetable markets have been finding efficiencies in the production process for a while now, and I’m sure those who did their due diligence in this area benefited from it during coronavirus disruptions when labor was in short supply and cashflow inhibited.
I also suspect the coronavirus has only made them better at finding efficiencies, because struggle is often the impetus for change and innovation. On the cannabis side, growers still have a ways to go, but many are starting to realize that tightening up production practices will help them maintain profits as more companies enter the market and prices right-size.
The upside of this trend is that as more growers share what they are doing to find efficiencies in their operations, the more the entire controlled-environment industry benefits. A cannabis grower who responded to the State of the Industry Survey commented that one of the biggest challenges he faces is privacy issues, meaning that information is not typically shared.
Can you imagine where other more mature controlled-environment industries would be without the sharing of information among growers? Holding back critical information from the competition is one thing, but too much secrecy cripples progress. I think we are seeing some of that in the cannabis market.
In this year of change and uncertainty, I urge you to continue to think beyond pricing. Take the time to focus on one area where you feel you can improve and become more efficient. If you find success, share this idea with others. You never know. They may take your idea and improve upon it, and in no time at all, a good idea has turned into a game-changing idea.
Head over to Greenhouse Grower Community and weigh in on this topic.
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