When Opportunity Knocks…
If you asked a grower whether they'd added more than 1,000 customers to their books in the past three years in this struggling economy, it's doubtful you'd find many that could say they had.
Jim and Jonathan Berry can.
J. Berry Nursery in Grand Saline, Texas, went from nonexistence to supplying innovative plants to a projected 1,000 Home Depot stores in 2010. The core regions include Texas and surrounding states and in the Midwest.
Prior to founding the company in March 2006, Jim and Jonathan Berry both worked for Plant Development Services in Alabama. Jim has been in the horticulture business for 35 years; Jonathan joined his father in the business in 2003 after several years as an equity trader.
"We felt like there was an opportunity in a growth state for value-added, new and improved shrubbery," says Jim, president of J. Berry Nursery, when asked about the impetus for starting the business. He and Jonathan, who serves as vice president, bought a 50-year-old nursery on a 173-acre plot where they thought they could "quickly generate product and revenues." And it has.
"Our strategy is to bring innovation to the marketplace," Jim Berry says. "The commodity game holds zero interest to me. But if we can identify what the market needs that it currently does not have — that's what we try to do."
The Home Depot is J. Berry Nursery's primary customer, but the company also grows some product for "a sprinkling" of local landscapers and several independent garden centers.
"By and large, we are focused on growing our business with the box stores," Jonathan Berry says. "Our core direct-to-Depot relationships are Texas and straight north.
We are looking to expand our distribution to other merchants with a limited product mix — some of our new and unique introductions."
It was the plants he didn't see that Jim Berry thought would create an opportunity for his retail customers. "We got started in business by looking at the market and not seeing certain products," he says.
They took existing varieties and presented them in a new way, where a "new presentation [of the variety] can then become a new SKU."
One of the Berrys' pleasant surprises when they started working with the Home Depot was how open the home improvement retailer was to new items in their garden centers. "Home Depot is looking for those products that are going to bring more dollars into the garden center: the high-value, high-margin items that are needed," says Jonathan. He says Depot lets his company make those decisions and then provides them with SKU protection so the grower can capitalize on the sales.
Developing a Brand
Throughout his career, Jim Berry has had a lot of experience with many different branded plant programs, and he understands the value of product presentation. That is why the nursery continues to grow the J. Berry brand, one that Jim says will be recognizable by consumers.
Brand development is an ongoing process, Jim says, but it's still pretty much in its infancy. "I think brands take a long time and heavy investments to create," he says.
When Jim and Jonathan started the company, they hired a marketing consulting firm in Dallas "to help us in the early stages to figure out exactly what messages we wanted to send and [tell consumers] who we were."
The firm put him in touch with a graphic artist and an Internet expert to develop a design uniformity between the packaging and website. The Berrys have developed a look and feel for their products to help them really stand out at retail. "Modern consumers don't go for generic packaging in anything."
"If you have special genetics that deliver long-term value to the consumerÉthat is hard to point out to a consumer in a black pot," Jim says. The goal is to put plants in J. Berry containers "that send a message of perceived value to the consumers when they are walking around the garden center."
If you present a healthy plant in a different-colored container with a logo, an attractive tag and proper signage, he says, "that sends a message to the consumer that says, 'This plant is special!'"
Pay by Scan
Having been in the pay by scan "game" for less than a year, J. Berry Nursery is still learning how it works. "What we like about pay by scan is we have the freedom to ship [product] based on data and sell-through inventory. You ship at will," Jim says. But "we continue to learn [from pay by scan] every day."
From the very beginning, "We have been determined to embrace [pay by scan], figure it out and thrive. We are not totally there yet." He says the system is helping J. Berry Nursery figure out the right product mix and deliver it to the right stores when consumers want it. Pay by scan helps them "manage inventory to our benefit, to the consumers' benefit and to [Home Depot's] benefit by keeping fresh product in the stores and at the right number."
Jim Berry says pay by scan takes a lot of the bureaucracy out of the shipping and ordering process: The grower and retailer have already agreed on the products SKUs J. Berry is responsible for, so they are empowered to make the appropriate inventory decisions. "All of The Home Depot [administrative] 'steps' are pre-dealt with."
Learning to Plan, Planning to Learn
As a young company, one of J. Berry's challenges is the lack of production history to help in planning for the future.
"It would be nice if we had [years of production] history," Jim says, but because they don't, there have been hits and misses bringing some new products to the market.
"Because of the growth phase we are in — adding new stores and new items each year — even if we had last year's sales history, it is only appropriate for a certain part of our inventory," Jonathan says.
Even though J. Berry Nursery doesn't have years and years of files, they continue to learn with each passing season, "and we can be a little more deliberate when it comes to product introduction," Jim says.
"We have reached a point where we can slow down the process," Jonathan adds. "We have enough new genetics in our bullpen that we do not have to rush products to market."
"Beyond looking for new plants that offer superior improvements over current comparables in the marketplace, we target items that would do well in a large portion of our distribution area," remarks Jonathan
"We are still a very young company and we are learning what to do and what not to do."
J. Berry sends all of its products to Home Depot stores via common carrier. They do not own any of their own trucks.
Jonathan says, "pay by scan has forced us to look at distribution, order turnaround and order construction differently. We are implementing software upgrades that will facilitate rapid analysis of data that leads to same week replenishment with as many of our stores as possible."
"One of the lessons we have learned from pay by scan is that we need distribution capabilities that allow for smaller deliveries per store — but more frequent deliveries." They continue to fine tune the art and science of shipping and delivery to ensure each store has the right amount of product at the right time.
"Going from 0 to 1,000 stores in less than four years has created plenty of growing pains," Jim says, and there really isn't a blueprint to follow. Instead, Berry says, "We look at companies in our industry that have grown rapidly over the past five years and attempt to learn from their success and failures. If we want to grow our company [the same way], should we emulate their behaviors and their practices?"
One of the biggest keys to J. Berry Nursery's rapid success is that they've chosen to be different from the very beginning. "We chose not to produce what other growers were growing," Jim says.
"We are trying to set ourselves apart from the competition, not on price but with different product offerings," Jonathan says.
"Our job is to make [Home Depot] profitable," Jim says, "bring them opportunities with new products and help them solve their problems to make them successful."
He admits that the state of the economy in 2009 was a bit of a challenge for a new company. They persevered and are doing very well, but he jokes, "The goal is to survive this year. We'll get rich later."
J. Berry at a Glance
Headquarters: Grand Saline, Texas
Growing area: 50 acres on a 173-acre facility (including 400,000 square feet of covered space)
Management: Jim Berry, president; Jonathan Berry, vice president
Employees: Approximately 70 year-round employees (130 during peak season)