Add Value to Your Poinsettia Crop, Part I
Three for $10, $2.99 with your supermarket card. Is no price too low for the beleaguered poinsettia? How did we get here, and what can we do?
For years, growers have looked to reduce crop cost as theway to make money with poinsettias. But there is only so much cost to reduce.You must "add value" if there is any hope for increased profits. Wewill look at how successful growers are marketing poinsettias around the world,what can be done with new genetics, how to breathe life into old product forms,how to package and how to move toward a profitable poinsettia crop. This willbe a practical discussion on what you can do.
Where are we today?
Who makes too much money growing poinsettias? After talkingwith breeders, propagators, growers and retailers, the answer is pretty muchnobody. Maybe the better question is "Who makes any money on thecrop?" We have watched the crop become a generic-price football, so wewill address where we are, how we get here and where we can go?
The only happy news from USDA is that, over the past nineyears, the total market for potted poinsettia's wholesale value has risenalmost every year. That is good news. There are more total dollars availablefor growers who grow poinsettias.
However, if we factor inflation out of the picture, then wesee the trend every grower understands — the real price, expressed in1992 dollars in the USDA data, is shrinking. Shrinking price puts more pressureon reducing costs, and this is a crop that many of you have already"reduced" as much as possible. With the energy increases this yearand all the fallout yet to happen — plastic prices and raw materialincreases — this is a bad trend.
We have moved the poinsettia from a specialty potted plantto a plant easily grown in a bedding plant greenhouse. Too easy to grow meanstoo many people growing poinsettias means prices that are too low.
Some of the other factors? Too much space — with not muchelse to put in it. Too many retailers using poinsettias as a lure for traffic.No product differentiation. And, last but not least, a very short sellingwindow — you do not get a few extra nice weekends with Christmas.
Many growers make money on bedding in spring and try tosurvive the winter. Spring is a longer season. It is easier to "addvalue" with bedding and, most importantly, a grower can turn the spaceseveral times in spring. So we all made money in the spring. We all built moregreenhouses for spring, and we are all farmers — Ecke and Fischerincluded. We are genetically predisposed to fill any idle greenhouse spaceÑ even if we sell at a loss.
We really are farmers. We often hear growers tell us thatonce the plant "leaves my door it is someone else's problem,"and we both think that is the wrong answer. Our lack of understanding aboutwhat the shopper is thinking — what motivates the shopper to make apurchase — that lack of understanding about all things consumer is one ofthe issues with lower poinsettia prices.
Let's also be fair — most of the poinsettias"leave our doors" looking pretty good, but then they get to retail.Most consumer product companies have a good idea why their customer buysproduct. We've seen merchandising with two prices marked in the sameplace — no confusion there. Of course you cannot see what you are buyingas everything is in a sleeve.
Let's also remember who buys our plants. We have seenmany surveys, and they all say the same thing:
• Bought by women, mostly 50 and over
• Bought as a gift (50 percent) and as a homedecorating "self use" (50 percent)
It all boils down to "How can we make changes?"We have two choices here. We can roll over and be "price takers,"Ñ that is "true" farmers. Farmers have almost always beenprice takers — price of wheat is up, price of corn is down. Or we canreinvent ourselves into consumer product marketing people and start addingvalue. Consumer Product Marketing People — that is a mouthful. But wehave to pick one.
So that it is all we have to do — change every bit ofhow we all do business.
In next month's continuation, we'll show you afew things you can make to create impact as "Consumer Product MarketingPeople." The most important things we need to reconsider are genetics,packaging, form, colors, presentation, promotion and quality.
The challenge will be how we integrate this philosophy intothe ways we sell and package the crop. Remember the statistics — it isall about women and it is all about decorating OR it's all about womenand it's all about giving a gift.