COVER STORY — Branching Out
The executive team at Ivy Acres is finding new ways to diversify its product offerings as well as its customer base.
Out on Long Island, in the small town of Baiting Hollow, Ivy Acres has been growing plants for nearly half a century. But for the past couple of years, the company has really set its sights on growing itself, too.
Big Grower recently sat down with the executive team at Ivy Acres to get an update on what the company is doing.
The company’s executive team is made up of Jack Van de Wetering, founder and owner; Dave Foltz, president; Peter Allen, vice president of production and finance; Kurt Van de Wetering, vice president of operations; Bill Reid, vice president of sales and merchandising; and Peggy Van de Wetering, marketing director. Kurt is also a member of GPN’s 40 Under 40 Class of 2012.
While Jack Van de Wetering still has a very active role in the company, he is not as involved in as much of the day-to-day operations as he once was. On the day I was in Baiting Hollow, the company’s president, Dave Foltz, was actually away from the business on a rare vacation attending the Summer Olympics in London. After sitting down with Peter, Kurt and Bill in person, I had a chance to catch up with Foltz over the phone once he returned from his well-deserved holiday.
Since Foltz joined the company in February 2011, Ivy Acres has really been focused on diversifying both its product offerings and its customer base, which is “helping make us stronger and position us for future growth.”
A Little History
Jack Van de Wetering founded Ivy Acres on Long Island with his brother Peter in the early 1960s. In the beginning, the company focused on growing tomatoes and other vegetables. The brothers bought five acres of land and soon they were growing 12,000 tomatoes in a single wooden frame greenhouse.
Several years later, the Van de Weterings came to the realization that there was more money to be made growing bedding plants so they decided to make the switch.
Jack and Peter added another location in Baiting Hollow in the mid-1980s and a plug production facility after that.
In 1986, the brothers separated the businesses. Jack took over the finished business of Ivy Acres and Peter started up Van de Wetering Greenhouses to produce plugs and other plant material. Peter continues to run that company today and the two companies work closely together.
In 1998, Ivy Acres added a third production facility in Vineland, N.J., to better service its customers in Pennsylvania and New Jersey. And last year a rose growing operation was added in West Grove, Pa.
All totaled, Ivy Acres has approximately 350 acres (both covered and outdoor) of production space at its four facilities. The company employs approximately 600 workers during the peak season, which includes about 300 in-store merchandisers.
The company’s customer mix continues to evolve. Today, its roster of customers includes such mass merchants and home improvement retailers as the Home Depot, BJ’s Wholesale Club Stores, Kmart stores, as well as garden centers, supermarkets, re-wholesalers and other retail outlets. The company also sells to landscapers and does some contract growing for other growers.
Its customers are primarily in the Northeast — New York, New Jersey, Pennsylvania, but also in Maryland, Delaware, Connecticut and Massachusetts. And they also sell and ship products to other states as well.
Reaching New Goals
Kurt Van de Wetering says his father, Jack, “has always been and always will be the essence of Ivy Acres.” The executive team takes care of the majority of the day-to-day operations, but Jack is still a very vital part of the company and can be found walking through the greenhouses at 6 a.m. offering advice, pointing things out and making sure everything “is done the Ivy Acres way.”
In early 2011, Dave Foltz was hired to be the company’s new president. He joined Ivy Acres after founding and running his own sales consulting firm for three years. Prior to that, he was vice president of sales and marketing at Kurt Weiss Greenhouses, where he spent 14 years.
Foltz has an athletic background and is admittedly a competitive guy. He knew from Day One that he wanted to come in and make a difference.
When he started at Ivy Acres, Foltz had four main goals he wanted to achieve:
1. Increase the company’s overall business.
2. Diversify Ivy Acres’ customer base.
3. Diversify the company product lines.
4. Transition into a 52-week-a-year company rather than a seasonal business.
He believes the company is on the road to achieving those goals. “To do that, we have to always be focused on the quality [of our product], our service and, basically, flawless execution,” Foltz explains.
“Our philosophy is to have a dedicated team that is focused on producing quality product and excellent service and merchandising,” Foltz adds. “That is what we strive to do every day.”
Peter Allen says, “We grow the things we feel we can do an excellent job at.” If a customer requires a product that Ivy Acres may not or cannot grow they will contract it out to make sure they are delivering the quality their customers expect.
Foltz says respect plays a critical role in all of the company’s relationships. “I take great pride in developing long term relationships based on respect. Our customers have to be able to depend on us and we have to be able to depend on them. It is truly a partnership.”
The executive team is always making sure that the relationship the company has with its different customers is foremost in everyone’s mind and they never take anything for granted. Bill Reid says, “We have to earn our business every day.”
Ivy Acres’ largest customer is the Home Depot. The company has been serving the home improvement retailer ever since it entered the New York marketplace. Kurt Van de Wetering said the company realized early on that Depot’s growing style and aggressive growth goals would be very complementary to those of Ivy Acres.
“There are so many different levels of a relationship with a company like Home Depot,” Allen says. “The primary relationship is with the president of the company and the executive staff.”
Foltz says for the relationship with companies like Home Depot to work, “it has got to be symbiotic. It has got to work for both companies.”
“Our customers have to know that we consistently have their back. We have to always look at each other’s problems and try to find solutions that are going to make both companies successful,” Foltz says.
Allen says the company’s merchandising services team, headed up by John Weiss, also has a very unique relationship with Home Depot, but at a different level. “John’s team works extremely long hours out on the front lines solving all kinds of different problems,” from shipping to watering to creating the perfect display, Allen says.
Van de Wetering says that relationship at the store-level is really important because those merchandisers are working on figuring out how to fulfill the specific needs of an individual store as well as the demands of the consumers that shop at that store. They have to figure out what needs to be done and how and when it needs to be done — and then they get it done!
“The biggest thing for me is that you really have to listen to your customer [at the retail level and the end-consumer level] and truly understand their needs,” Foltz says. “Listen to their issues and their challenges because ultimately they are our challenges as well.”
Over the years, Ivy Acres has become very adept at working in a pay-by-scan (PBS) environment. Allen says in the early days of pay by scan, some people had concerns, “But for us, it would be hard to do business any other way at this point.” He says pay by scan has helped the company work smarter, provided a level of strategic intelligence and even helped improve plant quality because they are able to have more control of their aspect of the garden center.
“With pay by scan, we have to constantly strive on the fundamentals and make sure everything is right,” Foltz says.
Reid says pay-by-scan data works like a consumer focus group. “A lot of the consumer research comes back to us via sell-through,” Reid states. The PBS data provides insight into what sells, where it sells and when it sells.
“There is a lot of power in that [PBS] information,” Van de Wetering says. “It really lets you see where the trends are going.”
Getting It Right
One of the corporate mantras at Ivy Acres is, “The Right Plant in the Right Place at the Right Time.” In a competitive market and a challenging economy, meeting that goal is imperative.
“We always have to be on our game, all the time!” states Bill Reid. If everybody does their job correctly and the plant is grown, shipped and merchandised properly, then “the consumer will make the ultimate decision and buy our product.”
Another way Ivy Acres is meeting this goal is by implementing lean flow methods (see sidebar) to their operations. By continually examining how they are doing things and eliminating any non-essential processes, plants can be grown more efficiently and more profitably.
Foltz says he is pleased with the progress that the company has made in reaching his four initial goals, but they are not there yet. Since he joined the company, two of his major objectives were to “continue to grow and expand the company both in market share and in the diversification of product lines.”
That means the company has taken on new mass merchant retailers, added new product categories in their own greenhouses, taken on additional product lines from other growers in the stores and expanded the services they offers to retail customers.
Foltz says one area that Ivy Acres has really expanded on is in the rose category. The expansion began when the company bought its rose production facility in Pennsylvania.
“We want to become a full service provider for all of our customers,” says Allen. “We want to be able to provide [products and services] in every live goods category.”
Allen says as the company is transitioning to a 52-week-a-year company, there are “synergies” for both Ivy Acres and its retail customers. Now they are able to offer year-round employment to the merchandisers rather than just having them work seasonally. He said that provides stability and continuity for the stores also.
Several years ago, almost all of Ivy Acres sales were pay by scan. Foltz said by diversifying the number and type of retailers they work with, it has allowed the company to lower that PBS number while growing its overall sales.
The Ivy Acres executive team is on a mission. They travel around the globe to visit other growers and suppliers to look for new product ideas or production methods that “will help make Ivy Acres a better company and serve our customers and consumers better,” Van de Wetering says.
The efforts of everyone at the company are focused on making sure they meet all of the needs of their customers. “Sometimes it is a dance to get it done,” Allen says, but they are getting it done.
“The people in this organization make this company what it is,” he says. “If it wasn’t for them, we wouldn’t be where we are today.”
Foltz sums up the company’s philosophy pretty well when he says, “We are going to continually strive to be better — for ourselves, for our customer base and for the end consumer!”
THE LEAN WAY
Ask anyone on the executive team at Ivy Acres what keeps them up at night and the answer is pretty much unanimous — eliminate any unnecessary costs because “there is very little room for error in today’s marketplace.”
Company president Dave Foltz says that with today’s razor-thin margins, “We have to continually strive to lower our input costs. We have reached the retail ceilings on many of our products, so to increase margins, we have to be more efficient with our input costs.”
One way Ivy Acres is doing that is by implementing lean flow practices. The company began investigating how it could capitalize on lean flow techniques about three years ago. Peter Allen says it is an ongoing process that the company has now fully embraced.
“We are really focused on eliminating any non-value-added costs and labor to the entire process,” says Kurt Van de Wetering. “We want to be sure we are allocating the right resources at the right place and the right time.”
He adds, “It is all about getting the right amount of people and resources for the tasks and finding the efficiency all of the way through the process.”