October 2009 Big Grower

Game Changers By Dave Edenfield and Dean Chaloupka

Innovation: Ask 20 people what it means, and you will get 20 different answers. But it usually comes down to viewing a need or problem a little bit differently than everyone else — and having the guts to act on a solution.

Many times, that solution goes nowhere. It is either not understood, or there's not as great a need for it, or the effort is underfunded. We usually chalk these ideas up to "ahead of their time." But then there are those great moments where the idea is easy to comprehend, the need is huge and the resources necessary are in place to make it a reality: These are "game changers." One example would be plug production introduced in the late '70s and early '80s and the impact it had on labor and crop consistency. How about Wave petunias in the mid '80s or the explosion of vegetative annuals in the late '90s and early part of this decade? Another would be the introduction five or six years ago of VMI or pay by scan relationships, which shifted the responsibility for inventory shrink and replenishment to growers. We take these for granted today, but when they were first introduced, they were by no means a guaranteed success.

The Future of the Game

So what might be the "game changers" going forward? Here are a few for you to consider:

A retailer and merchant team see and select every plant that goes into their stores. Today, most U.S. merchants see but a small fraction of what is placed in their stores and presented to the consumers. They will also pay based on the quality that is before them. It already happens every day at auctions around the world. No wonder the product quality is so high in those markets. Think it can't happen here? The concentration of suppliers and stores on the East Coast and in California make those areas ripe for it.

Retailers who require merchandising acquire "in-aisle marketers." How many plants could be sold if consumers actually got their questions answered by knowledgeable, trained personnel instead of people paid to off-load carts and stock shelves. Retail is still a people business, and the model already has been in place in the mid-Atlantic region with great success.

Retailers no longer make advertising decisions based on how long it would take to organize and print the ad. Instead, they would position advertising much closer (five to seven days) to the targeted product's key sales period. Think about it: Weather is the single largest influence on sales during key weekends in the spring, and it's hard to predict with any certainty until about a week out. Still, decisions about advertising and production to support it are locked in four to five months in advance. As today's technology helps advertisers sell into and communicate to micromarkets, ad planning can be done in "real time."

So much of growers' risks and associated costs today is based on having the right product for your customer at the right time. For pay by scan suppliers, it determines whether they get paid. Yet the vast majority of our industry's focus on cost reduction is based on production tasks, which are made four to five months before the product is shipped, and lock in the SKU and UPC at that time as well. What if we were able to change the identity or assign a SKU/UPC for everything produced at shipping instead of production? A supplier with a competency like this could redefine its competitive advantage and expand the market for their products.

Retailers are now beginning to ask for UPCs unique to the genus or variety level versus the container, which has long been the standard. Haven't we fought that battle as an industry in the name of cost reduction and simplicity? Consumers may soon be able to use cell phones as bar code readers to pull information about the products they're viewing. They could even get an electronic coupon, too.

Embrace Change

Ultimately, innovation is about mindset — how you view what's around you — and seeing the little changes that end in an "Aha!" moment and a bigger solution. Look for the tasks and process changes that will drive small, continuous improvements in your business; nimble companies do it every day then, when a major change is thrust upon them, adapting is simply part of their DNA. Companies that don't embrace change spend most of their time fighting it and eventually fall behind or out of the industry.

In the future, other categories' innovations and business practices will make their way to us. Our future may depend on how accepting and innovative we can be.