B&C Greenhouses: Stayin’ Alive

June 11, 2002 - 10:28

A small Midwestern grower learns how to adjust to change and develop alternate revenue streams.

Though the “B” in B&C Greenhouses has
retired, the “C”s are still there, but boy is it different from the
5-acre piece of muck that Dean Cramer and his uncle, Pete Bloemsma (the B and C
in B&C), began back in 1965.

Dean caught on to the idea of growing from his
father-in-law. “He had a little truck and was going to Chicago with it
and peddling flowers. I was distributing bread at the time, and I thought
flowers would be a lot more fun,” Dean says. “So, we decided to build
some greenhouses and get started.” Growing only about 10,000 flats of
annuals each year, B&C started with 6-8 employees. Now, about 30 employees
produce over 200,000 flats just eight miles away from the original 5-acre
location, in the southwestern Michigan city of Kalamazoo. There is an
established, 48-acre tract on high ground with a family of growers that can
overcome the industry’s highest hurdles.

Establishing a Lasting Relationship

B&C began a relationship with Kmart in 1968, back when
the 606 jumbo flats were wooden and as big as 10 1/2 inches wide. Though the
flat configuration has changed, B&C is still shipping bedding plants
— petunias, marigolds, impatiens, begonias, etc. — to Kmart. Thirty
years after the first shipment, Kmart had become B&C’s largest
customer, receiving approximately 75 percent of B&C’s business.

“Kmart has been a good partner over the years,”
said Darren. “They have been a big part of our growth because they have
always sent us consistently big orders. The container size and the plant
varieties have fluctuated over the years, but that’s to be expected. What
we didn’t expect was for their prices to start dropping, and no one would
have guessed 20 years ago that they would be in financial trouble.”

Though the retail giant might have topped the category 20-30
years ago, they’ve been on a downward slide for a while, and the Cramers
had been hearing hints of Kmart’s impending bankruptcy for some time
before they decided there was no other choice but to take action.

Traditional supplier/vendor theory argues that no supplier
should have more than 15-25 percent of their business with one vendor, but as
the mass merchandisers have grown, it has been far too tempting for growers to
resist growing with them, causing many growers, like B&C, to be dependent
on a single vendor. Now, with bankruptcy looming for his largest customer, The
Cramers began to think of ways to protect their business. Diversification
seemed the logical solution.

Existing Resources

When they started the search for alternative revenue streams,
B&C was lucky to have an existing resource to draw on: Country View
Showplace, a small, seasonal retail area they had opened in 1995.

As a result of the Kmart announcement, B&C decided to
devote additional resources to their fairly new retail venture. Over the past
year, Country View Showplace has doubled in size to about 21,000 square feet
and now offers a full range of hard goods, including fertilizers, garden
accents, arbors and soil, as well as a variety of home-grown annuals and
perennials.

The biggest hurdle with the retail business has been
building a customer base. Located on existing greenhouse property that was
selected for its remoteness, the garden center gets little walk-in traffic.

Dean and Darren are in the process of making some initial
advertising efforts, but marketing Country View has been a little difficult,
and most customers are directed to the garden center by word of mouth.
“We have high-quality plants at low prices,” Darren explains.
“We try to keep in line with what the chain stores are doing and provide
a better product than they do at a similar price. I feel that if the people can
find us, then they will keep coming back.” They have been working with
different marketing plans and are considering a billboard campaign in addition
to the ads they run in the local newspaper and the little league baseball team
they sponsor.

Country View has allowed B&C to grow a variety of crops
and get a taste of what the consumer really wants. “It helps us change
our business — to realize that we exist for the customers, to provide
what they want,” Dean says. “For retail, we grow so many things:
perennials, herbs, a lot more things than what the chain stores handle. People
want variety, and they want education. When they come out here, we have a lot
of things that they never see at the chain store. We give them something
special, and they come back.” For example, Country View carries a 12-inch
superbasket that is a great seller, but the larger chains don’t request
it.

New Territory

Encouraged by the success of their garden center, B&C
Greenhouses has started experimenting with even more alternative revenue
streams, most notably, perennial forcing. Though they are new to the forcing
business, B&C has worked out a system that uses temperature, light and
water to break dormancy prematurely, bringing plants into bloom as much as four
months early.

“The first step is to break dormancy,” Darren
explains. “To do that, we keep plants at 44° F for 9-12 weeks. After
plants start growing, we bring them into early flower by regulating water
uptake but more importantly with night lighting. We found that a 4-hour night
interruption works best for most of the varieties we grow.”

Starting in early February and continuing through mid-April,
one-third of each variety to be forced is rotated through the forcing area each
month. Favorite B&C varieties include hostas, cannas and delphiniums.

Nearing the end of their first forcing season, Darren is
excited about the potential perennial forcing holds for the company. For now,
all forced perennials are channeled into their own retail at Country View, but
the possibility of expansion is always there.

“Even though it is too early to tell what effect the
perennial forcing will have on our bottom line, we are very excited about
it,” Darren says. “At the very least, we will be able to give our
retail a larger variety, which will make our customers happy and again, help
set us apart. Plus, there is always the possibility that we could expand to
other retailers. Perennials are pretty big right now, so we think this will be
a good growth market. We see lots of potential.”

A few words of advice

Being in business for more than 30 years, you see a fair
share of change. For the first time, though, these changes are threatening the
company’s success, and instead of simply weathering the changes, B&C
is having to do the changing.

“We’ve seen major changes in the industry. We
went from a wooden flat to a plastic one and from 100-percent
cell-pack-produced bedding plants to herbs and perennials and more container
sizes than you can count,” Dean acknowledges. “All that shows is
that you’ve got to be aware of what your customers want — not the
retail customer but the end consumer — and be ready to implement that.
You’ve got to be ready for whatever the market throws at you because if
you’re not, it’s tough to play catch up.”

About The Author

Carrie Burns is associate editor of GPN.

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