Tap Into The Edibles Market
The economic downturn we have endured since 2008 has clearly impacted what consumers buy and how much they are willing to spend. In our industry, people have chosen food over flowers. According to the National Gardening Association (NGA)’s 2012 National Gardening Survey, food gardening has higher revenues at $2.7 billion than flower gardening with revenues of $2.1 billion.
NGA also noted the vast difference in space allocation at retail. In many garden centers, the space is overwhelmingly controlled by flower gardening products, even though vegetable gardening drives more consumer revenue. This is a clear indication that the revenue per square foot at retail is far greater in the food category.
Edible Options In The Market
What has and continues to astonish me is the lack of vegetable programs dedicated to container gardening. While the NGA says 49 percent of the consumers who food garden participated in container gardening, they grew mostly standard varieties, not those bred for small spaces and containers. Yes, we see a number of tomatoes and peppers offered in 10- or 12-inch containers, but this is the exception to the rule.
For the last several years, industry professionals have been excited about the Vegetalis line of container vegetables, but with the exception of Sweet ‘n’ Neat, these varieties rarely show up at retail. We have not observed any vegetable hanging baskets with the Vegetalis varieties. Vegetables are typically the highest-margin products for most growers with low input cost, limited crop times and great sell through in today’s world. Even the fantastic Vegetalis varieties are priced so low it’s almost shameful, costing less than half as much as high-value flower seed items. This is a real marketing tragedy.
One of the real beneficiaries of the edible boom is ABZ Seeds. The company has bred and marketed a great line of high-performing strawberries that not only produce very edible fruit but also have colorful flowers prior to fruiting. From my retail observations, it appears that a huge percentage of the strawberries on the retailer’s shelves are seed varieties from ABZ Seeds.
These guys know how to price better than most seed companies. Offering their seed at the same relative price as the dormant field-grown roots — but with many more benefits — is a great example of pricing to value. On average, both forms sell to the grower market in the $0.10 to $0.12 range, whereas the Vegetalis varieties are roughly in the area of $0.035 to $0.045. Tomatoes and peppers in a 10-inch patio container retail from $9.98 to $13.98 depending on the retailer.
For example, if a grower who receives $7.50 for a 10-inch container pays $0.035 for the seed and achieves 75 percent usable seedlings, his perishable input cost would be $0.047. That would equal less than 1 percent input cost relative to the selling price. Compare that to the average input cost for vegetative annuals that typically have an input cost percentage for selling prices of 15 to 25 percent. My point is edibles are profitable, and container vegetables are extremely profitable.
Popular Edibles Brands
By far the No. 1 brand in this category is Bonnie Plants, which is the dominant supplier at Walmart, Home Depot and Lowes. This past spring, the only vegetables I saw in Home Depot were from Bonnie. Other brands — including Burpee and Grow Your Own — were much less visible this season as Bonnie dominated at the national retailers.
There are several brands dedicated to the independent garden center sector. The most notable brand is Chef Jeff’s, which offers a diverse line of vegetables and herbs with great packaging and very relevant point-of-sale (POS) materials. In the organic category, there is the Organix brand from the Plug Connection, which was not widely seen in my travels, and two really outstanding programs from Smith Gardens in Bellingham, Wash., called Growe and Earthe. These two brands are positioned for different retailers, and both have good packaging and great POS materials. In most of the country, organic vegetables are not available at the national retailers or at a lot of independents.
For the first time in the berry category, there will be berries bred for patio containers with gorgeous flowers and attractive foliage, as well as flavorful fruit. The Brazel Berries brand from Fall Creek Nursery is sure to re-invent this category.
The Target Customer For Edibles
According to the NGA, food gardening is a great category to attract future gardeners. In 2011, 30 percent of the 18 to 34 age group participated in the herb category. In the berries category, 43 percent participated. The 18 to 34 group also ranked second in the number of food-gardening households (8 million, or 27 percent of participating households), which is second only to the 55-plus age group (11 million or 37 percent of participating households).
This is clearly a sign that this group loves food-related gardening. The industry must attract this huge demographic group, or the future will be bleak. The way to attract them is through food gardening, so let’s start communicating our values.
In a six-year period, the vegetable category experienced a 40-percent growth with sales rising from $1.164 billion in 2006 to $1.63 billion in 2011. The highest sales totaled $1.762 billion in 2009. The number of households active in vegetable gardening in 2011 was 30 million, up from 25 million in 2006. This was a 20-percent increase, although slightly down from a peak of 31 million in 2009 and 2010. This indicates that although the 18 to 34 age group enjoys growing edibles, the demand and participation rate may be flattening.
Increase Profit With Container Edibles
The NGA survey has not asked any container gardening questions since 2009 when the participation in container vegetables was 48 percent. But of those who said they were vegetable gardeners, it is clear from the annuals category that convenience and ease-of-use are paramount issues for the consumers. With the 55-plus age group less willing to dig holes and pull weeds and the 18-to-34 age group not inclined to dig in the dirt, containers provide the biggest opportunities.
Containers do not necessarily have to be the traditional 10- or 12-inch patio pots that are common with annuals offerings. Think about smaller containers for patio tables like the 7-inch Sweet ‘n’ Neat at Lowe’s from Metrolina Greenhouses.
Color Bowls of various sizes make nice mixed herb gardens. Window boxes containing both herbs and vegetables and hanging baskets for small space garden varieties are other options. Some of the really dwarf Vegetalis tomatoes can grow and produce nicely in a 6-inch container. No matter how you choose to grow them, vegetables offer huge opportunities, low input, reduced crop times and great gross margins. What else could you want?