Problem: A mid-sized grower with an isolated market that is being served by several larger producers who compete on price. Solution: Extremely high-quality plants that are grown 100 percent on spec with a first-come, first-served policy.
The metro-Denver, Colo., market is unique in several respects: It is very geographically isolated; within delivery distance, it covers two distinct markets; and its small- to mid-sized growers have been immune to the price erosion so much a problem in other areas. But over the last few years, Denver growers have started to experience a very common problem: competition based on price.
Faced with a similar situation, small- to mid-sized growers across the country have usually chosen one of two alternatives: add a retail operation or expand production area. Twenty-year-old Brown's Greenhouses, Arvada, Colo., hasn't done either, and according to Co-owner Don Brown, they have no intention of doing so. Instead, Brown's continues to turn a profit based on quality, selection and an innovative sales strategy.
Husband and wife team Mickie and Don Brown are at the heart of Brown's Greenhouses, with Don acting as head grower and Mickie supervising all front office tasks, including sales, collections and bookkeeping.
Brown's is fortunate enough to service two markets within the same area, each having a different peak. Independent garden centers in the Denver market, which peak in early June, provide the bulk of the yearly business, and garden centers in the so-called "mountain" market provide a nice secondary peak approximately 2-3 weeks later. While the mountain business is further away, a delivery charge covers the additional cost and preserves the necessary margin.
Serving both markets allows the Browns to invest heavily in facilities and employees. Brown's eight year-round employees, as well as the 8 seasonals, enjoy the comfort of a new 24,000 sq. ft. Nexus double-poly greenhouse and a new 4,500 sq. ft. headhouse. Driveways and parking are a well-maintained, crushed aggregate. Walkways and flooring are relatively new concrete. And while Brown's is not without its hoop houses, the over-all impression is of pride and respect, qualities Don extends to his employees.
"You build a business based on your employees," said Don. "They're what make you successful. We invest a lot in each of our employees. In addition to a good wage, they receive benefits, bonuses, paid vacation and extended time off. Our return is long-term employees of over 15 years. It's a good return."
The Denver Market
Despite several other small- to mid-sized growers in the region, as well as larger operations such as Rocky Mountain Growers and Tagawa Greenhouses, Brown's continues to sell out every year. In fact, Don doesn't seem too worried about his competition. "I can't think about them--what they're doing, what their prices are," explained Don. "We just do the best that we can and so far, that's been enough."
According to Don, like-sized growers in the Denver market have a very amicable relationship, where each complements the other. Brown?sdifferentiates mostly through selection and a growing brand recognition. "We offer a lot of varieties," said Don. "We don't do big numbers of anything, but we have a big variety. For example, we have over 30 varieties of ornamental peppers. That selection seems to help in our market."
Brown's crop selection includes standard spring crops such as bedding plants, vegetables and bulbs; potted crops such as azalias, miniature roses and African violets; and seasonal crops such as Christmas cactus, cyclamen, asters, mums, pansies and kale. There are also a sizeable number of larger-format round containers and hanging baskets in the mix.
Some of the material used is branded, though Don believes that the quality of the plant is the most important factor, more so than size or brand. When growing patented plant material, Don includes the required tags in the finished product, but customers know that material from Brown's will sell regardless of breeder or even grower POP.
Brown's is in a unique situation with its budding brand. You see, it is not actively trying to create a brand; it is simply making a name with garden centers and consumers alike through quality and service.
At a time when fewer and fewer growers take the gamble of growing on spec, all product at Brown's is spec; the company doesn't accept purchase orders, and it doesn't hold product.
Because of close customer relationships, Brown's is able to estimate the amount of product it will need each year for each market. Brown's produces to its own estimated mark and ships product to customers as it becomes ready, ensuring that retailers never receive product that is past its prime or not yet at its peak.
Each Monday morning, Brown's takes an inventory of product that will be at its peak for the following week and weekend. Mickie then sends a fax to established customers, listing the varieties and quantities of each that will be available. Customers call Mickie and place their orders based on the availability list. Orders are taken on a first-come-first-served basis that is adjusted to the flow of trucks. If impatiens are behind schedule, they don't go on the list and none are delivered, regardless of demand.
Hold your gasps and moans about customer satisfaction and your lectures about supply and demand until you hear how the system is working. Brown's counts over 100 area garden centers as loyal customers; it sells every plant it finishes; and it turns its greenhouses two and one half times each spring. According to Don, instituting this order system was one of the best business decisions in their 20-year history.
"We don't save any product," explained Don; "when plants are ready, they go. Customers are welcome to come out to the greenhouses to select their own plants, but most just fax in their orders because they know they'll get good product. Our system only lets the best-quality product leave the greenhouse."
The hardest part of the system, said Don, has been getting customers accustomed to placing orders early in the week. Retailers prefer to place orders later in the week, just in time for weekend delivery; but with a first-come system and a limited amount of product, they are having to place orders much earlier. All orders received by Tuesday are guaranteed for delivery by Friday afternoon. The early deadline allows Brown's maximum efficiency when scheduling trucks, and it also gives retailers time to display product before the weekend rush.
Don admits some difficulty in training retail customers, but said that everyone involved is pleased once they get over the hump. "We grow nice plants, and this is the best way we know of to get them to our customers," reported Don. "It was tough at first, but this ensures quality, and quality is what counts."