Also in this issue...
| Jennifer Zurko
>> Published Date: 5/29/2014
“The expectations of life depend upon diligence; the mechanic that would perfect his work must first sharpen his tools.”
We learn from a very young age that our parents set a certain amount of expectations for us to reach. They expect us to study hard, do well in school, behave and follow rules—all so that we can grow up to be mature, responsible members of society.
Certainly, most parents wish for their children to earn a college degree or have some sort of stable career path to take them into the future. From infancy to young adulthood, we’re raised with the understanding that we have to work toward the goals our parents instill in us.
Then, comes the “Real World,” where you’re now far beyond dealing with just the expectations of your parents and teachers. Now, you have to answer to managers, co-workers and customers. It’s interesting to see what the younger generation feels about meeting the demands of their customers. Are the goals your customers set achievable? Or do you feel like a hamster in a spinning wheel of constant complaints because they’re NEVER happy?
Your customers—whether you’re selling to retailers or direct to consumers—expect that prices stay the same or at least only increase veeeerrrry slightly and veeeerrrry slowly. Look at Chipotle—they just announced a price increase and people are taking to every social media outlet to vent their rage. Raising prices is never easy.
Our essay question wasn’t that easy, as I’m sure our finalists could attest. We asked them to address the topic of pricing and saving money. In a difficult market, how can you save money in other areas in order to keep your prices in a range that your customers can deal with?
Adam Flint said that they do a variety of different things in order to save on operating costs, including being more efficient, planning better and using new technology to keep track of chemical applications. And he enjoys the challenges.
Doug Mead knows the customer is king, so he and his team are constantly looking at new elements and processes to improve their cost position, like using beneficals in their pest management program, which they just started last year.
Jimmy Santos-Mocon may be one of our youngest finalists ever, but he’s not new to the industry. He grew up in his family’s business, so he knows all too well how even the smallest details can offer big payoffs.
What’s clear is the expectations for today’s young growers have changed; you can’t just be a plant geek anymore. You need to have knowledge of what’s beyond the bench in order to have a successful business.
Our panel of judges will choose the 2014 Red Fox/Young Grower Award winner based on their nomination applications, their essays and a telephone interview. We’d like to thank our esteemed judges for their time and support of this award. The judges are:
President & CEO
Ball Horticultural Company
West Chicago, Illinois
Owner of Foertmeyer & Sons Greenhouse
Current AmericanHort Chairman of the Board
2013 Young Grower Award Winner
Head Grower of Riverbend Nursery
All three finalists will be our guests at Cultivate’14 in July and the winner will be announced at the Unplugged event at the Park Street Cantina at 8:00 p.m. on Monday, July 14. The winner will be featured in the September issue of GrowerTalks.
Question: Years go by. Your expenses go up. Customers, however, have different expectations for the products you sell. How does your operation determine a strategy for covering these increasing costs over time while not alienating your customers?
Title: Head Grower
What a wonderful time it is to be in the greenhouse industry! We’re ever evolving and constantly being challenged within our own capacities. For example, the roles of a grower are changing; being a good grower isn’t enough anymore. We’re also expected to be well-educated business professionals. We find ourselves being integrated into many facets of business—taking on some of the responsibilities of manager, accountant and
Also placed in front of us is the challenging task of turning a profit with increasingly lower margins. The cost of operating a business will continue to rise, however, consumers feel the prices should remain low. With consumers driving the price down, competition takes a turn for the worse; playing the “I-can-sell-it-for-less” game can be
Blaming our lower profit margins on our competitors and/or consumers is an easy way to justify issues. However, this justification does nothing but waste time. I’ve given myself the ongoing goal of not getting caught up in the pointless “what ifs” of life and business. Instead, I’ve focused on what the issues are and use beneficial “what ifs” to search out the best ways possible to alleviate these challenges within the business.
One common example that all businesses share is efficiency. Striving to become a more efficient company and/or coming up with new ways to tackle this age-old difficulty is tough. I’ve found through personal experiences that planning works wonders.
At Perennials Plus, we have a saying that circulates fairly often: “Proper Planning Prevents Poor Performance.” Although it’s merely a “saying,” the words ring true. When companies have well thought-out plans and execute them precisely, the chances for error are significantly lessened. When we plan and have meetings to discuss these plans, we can be on the same page. With everyone understanding their role within the company, it becomes much easier to manage employees. Throughout each task, growers must always be conscience of ways to further increase the efficiency for next year. Also, we must be mindful and use constructive criticism when an employee says, “This is how we’ve always done it.”
Last year, while working on the fall mum crop, one of our employees started spacing the mums in a “standard” perpendicular form. I asked him if he had ever considered spacing the mums in a diamond form in order to save space. I cringed as the worker quoted, “This is how we’ve always done it.” I then challenged him to trust me. Knowing we could fit 200 plants in the given area, we went forward together with the goal of increasing that number. In the end, we found we could fit 220 plants in the exact same area. By spacing the mums in a more efficient manner, growth will increase 10% without expansion of the growing area. As learned through this example, efficiency is potential profitability.
Labor is one of the largest expenses for a greenhouse. Perennials Plus has a great labor force. Many employees exceed our expectations. However, it’s not the employees’ responsibility to know everything. If they’ve finished their assignments for that day, it’s my responsibility to guide them to the next task. As manager, I’m accountable for the efficiency with which the labor force works. It’s my obligation to make sure employees are constantly busy, thus increasing productivity. This doesn’t mean working employees to death. It’s simply challenging employees to achieve the company’s goals. Rewarding them when goals are met is one way to motivate your staff.
With respect to proper planning, a grower must strategize chemical applications. Knowing your arsenal for combating pests is very important. When I arrived at Perennials Plus there were no notes left behind and minimal spray records for me to go off of. I was able to develop an Excel spreadsheet to keep track of my spray records, along with an Integrated Pest Management program on which I base the applications. This helped me target pests before they became an issue. Creating this IPM program has enabled me to properly use the chemicals the way they were intended, thus giving the application the maximum efficiency. In doing so, I’ve been able to save Perennials Plus thousands of dollars in chemicals cost, as well as labor costs necessitated by additional applications. This was accomplished without any major pest issues.
Being a young grower, it’s second nature for me to use computer-aided software such as Excel. By using these programs, I’m able to keep notes organized, formulate production schedules with ease and create charts for graphical tracking of crops for growth regulators. These tools prevent me from making costly errors; errors that would have translated in profit loss or increased cost for consumers.
Marketing can be a large expense for a company. Costs of TV ads, radio ads, newspaper ads, etc. can add up fast. With so many competitors, we don’t want to be lost in the crowd. Perennials Plus has chosen to not actively engage in marketing. We use word of mouth from our satisfied customers and allow large suppliers—such as Ball, Proven Winners, Suntory and Syngenta—to do the advertising for us. These companies use programs like HGTV, TV commercials and magazines to draw in a larger consumer base than is our capability. By carrying the “popular” plants for consumers, we always have what the customer desires. This method has been very successful for our company.
Through proper planning of work schedules and planting times and through maintaining notable data, we no longer play the I-can-sell-it-for-less game. We now focus on producing products with lower production costs, such as labor, chemicals and greenhouse space. With ever-increasing efficiency, we’re able to keep our prices within the market’s range. This allows us to sell our plants at acceptable costs to consumers and preventing the alienation of customers, while maintaining a profitable business.
Title: Senior Section Grower
Auburn, New York
The most important people in any business are the customers. Keeping our products affordable for them is our number one priority. As technology improves and grows, we as a company have to grow and improve, also. This may be challenging and expensive at times, but is important to the future of the business. Customers expect our products to be better year after year and meeting expectations is what keeps them coming back. As a business, we do all we can to keep them satisfied.
Technology plays a very important role in reducing costs that a business will incur. Every year the strategies for keeping energy costs down are changing and improving. This past winter was one of the harshest winters in recent memory. To keep energy costs down, we use an energy curtain. Over 70% of heating in a greenhouse occurs at night, so cutting down on heat escaping from the greenhouse is a very important cost-saving measure. It also reduces the amount of volume you must heat in order to maintain the temperature settings in the greenhouse. Finances have shown a reduction in the heating costs since we’ve installed the energy curtains. The lower heating costs enable us to keep customer costs the same without diminishing the quality of our products.
At Dickman Farms, we’re wholesale growers selling starter plants and finished plants to other retail operations. We also have our own retail store, which allows us to test our pricing strategies to see what will sell at a certain price and what won’t. We’re located in Auburn, which is a small city in upstate New York. The population of Auburn in 2012 was 27,365 people. As a business selling to other retail stores, population is important to keep track of. A lot of the businesses we sell our products to are around the same size and in the same economic bracket as Auburn. We use our retail store as a test market for the other retail stores that we sell to. If a product sells well here in Auburn at a certain price, then we can work with our wholesaler buyers to set their prices based on how well the product sold in our store. If a particular product doesn’t sell well in our retail setting, then we can let them know so they don’t buy as many of a product and have it wasted or lose profit. Our wholesale customers are just as important as our retail customers. If they’re satisfied with the products they receive, they’ll continue to come back year after year. As our wholesale clientele grows, we’re able to keep our prices competitive for our retail customers.
As a grower, one of the biggest obstacles I face are greenhouse pests. The insects can keep a greenhouse from producing the highest quality product available. Over the last few years, we’ve noticed insects becoming increasingly resistant to the pesticides that we spray in the greenhouse. The days of just going into the pesticide cabinet and choosing a certain chemical to get rid of a certain type of pest are long over. Continuous use of pesticides have made some of the pests immune to them, so using poison to kill them is no longer an effective option.
Last year we decided to incorporate beneficial insects into our wholesale and retail operations and we’re absolutely satisfied with the results. While initial cost of establishing a population of beneficial insects may be higher than going into the greenhouse to use sprays, it pays off with the quality of our products. Instead of buying different pesticides and insecticides that must be applied over and over again, we can purchase the beneficial insects for a short amount of time until they reproduce on their own, greatly reducing our pesticide costs.
Last year, we tested how well this would actually work in our own retail operation. We tested with one release of Orius insidiosus in the mum fields for thrips control and we were very pleased with the results. The thrips control on the mums went from being done once every week to only being done once during the fall season. This was a drastic savings, not only on pesticide costs, but on labor costs as well. We were able to utilize our staff in other useful ways and to train them in other areas. Our retail and wholesale customers benefit from our use of the biologicals because they’re purchasing a product that wasn’t sprayed with a pesticide. As an added bonus, we get to pass the population of the good bugs onto our customers in hopes that they, too, can benefit from the use of
For me, being a grower is the most rewarding job. I get to go to work and enjoy what I do every day. It’s great to work for a company that’s looking towards the future. Trying new products and being innovative is what will improve the quality of our products without costing the customers more money.
Title: Assistant Grower
Chilliwack, British Columbia, Canada
Unpredictable weather changes, rising expenses and an ever-changing marketplace. What does this all mean? Well, as growers in the industry, we’re always looking for new and innovative ideas that can be implemented in our company to promote sales and lower costs. With prices for gas, food and entertainment becoming more expensive commodities, one may ask how a grower can introduce new cost-efficient methods to the market without pushing the customer away with spending cuts or price increases. Although difficult, I believe there are a few solutions for growers. You’ll hear me advocate my solutions to these major problems by showing the significance of improving quality, product presentation and providing more information to the customer. With most costs only being part of the finer details, the real emphasis for your product needs to be in the green.
Growing a plant from a seed or cutting to its mature state is no easy task. As anyone who’s tried to predict the weather knows, even the forecast you watched in the morning on TV can change within the next few hours. (Or if you live in the Fraser Valley in BC.) Plant quality falls under many small and large variables. Small details can sometimes be misread or overlooked. A grower may ask, could that crop use less sprays? Could we save on labor if we added technology to make it automatic? Or even what’s the optimal growing environment for this crop? With endless possible variables to consider, keeping crop quality and expenses to a minimum is a big challenge for growers.
If a single detail is missed, like during the growing phase of a crop, a grower can find himself or herself in a struggle to recover that crop, making selling your product at a profit near impossible. As growers, we need to focus on these details as we apply different formulas and notice the affect it has on plant quality. If a change was noticed, then we can apply it—but keep in mind everything you add to it has now added a cost. Minimizing these minor costs can go a long way when you’re selling a few hundred thousand of something.
Also consider the product’s wrapping. Tags, pots and even trays are what customers are consciously and unconsciously considering when purchasing your product. Everything from the pot size to its color are causing customers to make assumptions on your product. Carefully planning for your local markets can make a world of difference in the sale to the final consumers who have a series of details they’re looking for in your product. Making your product not only stand out, but become something your customer wants to buy again, can make the difference between a customer being satisfied or facing a conflict after their purchase. Even considering the smaller detail power of product design can well compliment your plants.
Even with all the new genetics being modified for plants, there still isn’t a plant that can talk to the customer and provide information on how to grow it. So, until then, the customer is stuck simply grabbing a plant and then looking at its tag for information. The new generation of tags are filled with cultural growth guidelines and are triple in size from the old ones. Compared to the older days of the small growers—where a tag was usually 1-in. wide and 3- to 4-in. long with minimal information on crop culture—the current tags for plants today are behemoths to say the least. Tags are now being designed to look good for the customer and provide them as much information as possible. This doesn’t mean a full description in a jargon that only a grower may know, but there must be enough information to help walk the customer through how to grow the plant. Simply put, be efficient with your words. Through this, you can keep customers happy and continue in making sales toward them.
Presentation, display and catching the eye of the customer is what it comes down to. A grower must look into how they can change things up and potentially stand out over their competitors. Reorganizing our shelves, adding in more bling or “WOW” to the outside of our retail centers or even just painting your carts a new color for your clients will help promote customers to stop, glance and pick up that plant that you worked on for the past seven months. No matter what crop you’re growing, however, it’s going to come to the customers’ decision whether they’ll buy it or not. Displaying your product in an assortment of colors can also help attract customers. With new cultivars, you can place new reds, whites, yellows and pinks from top to bottom of the carts that will lead a customer to follow it. If you miss that ever-judging eye of the consumer, you won’t be selling any plants anytime soon. By applying new innovative ways in displaying plants to our customers, you can hook them in and get a sale and continue making that sale.
The continued customer support is essential in making profitable customer relations. The old days of “if you grow it, they will come” simply doesn’t work. This is where quality comes in. If your customer knows your name, whether wholesale or retail, that continued consumer approval of the product will bring them back, making product turnover more frequent and stable. Maintaining this essential relationship with customers will not only increase sales as customers come to know and trust your product, but will bring reduced costs as your company becomes more consistent with its sales, making plans for plant growth easier.
Thinking of all this reminds me of the old days. Going back to my childhood of growing up in my parents’ greenhouse, I can say I have seen many changes made to improve customers’ views toward the industry. These changes can be as obvious as slowly watering a few plants by a hose and wand to the more conventional automotive booms watering hundreds of thousands plants almost instantly. The horticulture industry is continually changing with its pots, new cultivars and new ideas that are continually changing the markets and how plants are sold. With a focus on keeping our costs on what our customers value—quality—we can keep costs low and help prevent our customers from choosing between quality and price. This must include a proper presentation of the product and an efficient amount of information to help customers make better decisions for what they actually want. No one said that growing would be an easy task, but if the effort is there, rest assured that you got that customer purchase. GT
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