Are You Facing the Future? (Redux)

Gerry Raker

A year ago I wrote, “We’re in some of the most challenging times that I can remember … struggling with an economy that is slow to recover … There is no trust in banks, big business or government. Unemployment is too high. Disposable income is too low. As a consequence, every week we read the trade news about a foreclosure, another greenhouse going out of business, another retail store closing their doors … The supply chain is consolidating at a rate so fast that it’s hard to keep track of it … Our industry is reeling from a five-year drought of growth.”

I have to admit that I thought we, the industry and Raker, had probably covered most of the rough ground and the direction to take would become clearer and the travel easier. Well, just because you’ve survived a heaping dose of trials and tribulations doesn’t mean more is not on the way. The supply side continued its consolidation; Ecke, Oro, Fides were swept up into the Dümmen Group. Distribution (still digesting Griffin’s purchase of SHS Horticultural) saw Milikowski also get absorbed in the aftermath of that deal. Northern Innovators folded, ePlantsource was born, while McHutchison saw fit to reincarnate Vaughan’s. The grower arena watched Color Spot buy the latest version of Hines, stood by as Metrolina snatched Stacy’s out of bankruptcy and then saw Color Star Growers crash and burn, only to have several new businesses rise like a phoenix from the ashes.

Big box retail kept it interesting with an ever-changing view of how things need to work to their benefit. Then Walmart fired a shot to be heard around the world when they revealed their latest gerrymandering project. Independent garden centers were not to be spared. Linder’s of Minnesota is noticeably missing after a century of business, while the forward-thinking Hole’s Enjoy Center had to file for protection in the midst of their plagued transformation. Raker records indicate that scores of smaller business, both growers and retailers, have likely succumbed to the pressures of negative profitability.

Okay, that’s the business news. The deck has been shuffled and cut again. We have a new hand to play. What kind of cards have we been dealt? How do we play them? Raker responded to the last hand by making extraordinary adjustments to their business model. We slashed inventory, weeded out unprofitable items, reworked expense budgets, examined efficiency, restructured our organization accordingly and committed the company to get more done with less. So right when you’re starting to count your chips and peek at the cards, your new hand reveals that the mergers in the supply chain that should bring you efficiency actually cost you money—because while the companies may all be under one business banner, their systems are not.

Accurate availability information and order confirmation exists only when imagining. Distribution consolidation and start-ups deliver a similar story. By the time the systems and organizations meld and sort themselves out, hundreds of thousands of sales dollars have failed to appear. Grower acquisitions create new possibilities, but with existing lines of communication disrupted—from the Raker perspective—who’s to know where the purchasing power lies and what the selling protocol should be? While they figure out their combined inventories and decide what needs to be produced, we draw the next card only to find out that millions of cuttings are contaminated by disease. Then nature plays her wild card and serves up a winter of historical proportions. Suddenly, normal cycles of buying/selling and production/order fulfillment are disrupted and the industry is consumed with work it didn’t plan to do and costs it didn’t budget for. The irony is that in the midst of all this crisis and motion there seems to be a feeling that businesses are waiting for something to happen.

I laid it all out in that article a year ago. The new reality can’t be ignored, hidden from or outrun. In order to survive you have to ask the future what it wants from you and then you have to do what needs to be done. The odds of success? In that same article, I said businesses need a resolve like that of a newly landed immigrant family or those headed west in a covered wagon, setting out for the new frontier. This was not meant to conjure up a romantic notion with a guaranteed happy ending. Quite the opposite was true. The reality of conquering the new frontier littered the landscape with casualties. Only a few get to tell their story. All in? GT

Gerry Raker is the business team leader and owner of C. Raker and Sons, Litchfield, Michigan.