Growing high-quality, salable plants at a profit is a challenge for every grower. That means every phase of the plant production process must be consistent and predictable. The plant breeder’s role in this process can really set the stage for a grower’s success.
Last month, Big Grower had a chance to visit with Gary Falkenstein and Karl Trellinger, co-presidents of Fischer USA, during the company’s trials and open house in Boulder, Colo. Falkenstein and Trellinger talked to us about what they see happening in the industry and the challenges faced by breeders and growers alike.
Is the Price Right?
“No doubt there are more price pressures throughout the supply chain,” Falkenstein said about market challenges. From the farm where the cuttings are produced all the way to the end-consumer’s home, the one thing everyone has a hard time agreeing on is the price of the product. The price a consumer will pay for the final product versus the cost to grow the plant and make a respectable profit are always up for debate.
When it comes to the consumer, price is usually third behind color and quality in making their buying decision. “If you hold up a really nice-looking product in front of a consumer and ask them what it’s worth, I don’t think they could tell you,” Falkenstein said. “But if the price tag is there and they like it, they will buy it.”
That means the grower must be able to produce a consumer-ready product. Trellinger said, “The key objective for [growers and breeders alike] has to be that the product looks better at retail. We all know that if it looks good, it will sell!”
According to Falkenstein, the large retailers are all competing with the same strategy of “low price” and there can only be one winner. He believes if all of the big box retailers continue to only emphasize a low-price strategy none of them will be differentiated in the eyes of the consumer. The one that abandons the low-price strategy and adopts a strategy of offering value priced quality plants will be differentiated from the pack. Then they will win. He cites Canadian retailer Loblaw as a good example of this strategy. “[Loblaw’s] does a superb job. They work with their growers very closely. It is one channel to the market where there has not been price erosion because they have good prices, good quality and they pay the growers well.”
Every grower strives for two things: product and process consistency. If the plant production process is reliable and repeatable, it makes everything easier. To do this, the grower must be able to depend on the quality of all of his inputs.
“Reliability is everything,” Trellinger said. “And in the future, reliability will be more important than price as the need to better measure value becomes increasingly important.” Falkenstein agreed, saying reliability is so critical, it is imperative that “we do everything we can to keep [growers] informed” about things like product availability to exact shipping schedules.
“We know that [receiving product] on-time and in full is critical” to the grower, Falkenstein said. To help fulfill the “on-time and in full” delivery requirements, the company works with large growers to set up custom transportation and logistics programs. Everyone wants to have 100 percent of the ordered product delivered when they expect it and are ready to plant. The company’s logistics director supervises the movement of rooted and unrooted cuttings from its farms around the world to the receiving docks of its customers across the country.
Communicating and Working with Growers
Trellinger and Falkenstein said the company reaches out to growers and keeps them informed in many different ways. This may include updates about what is happening in the Boulder offices via e-mail newsletters or regular notifications of the status of cuttings trucked in from Mexico, or Internet usage to learn about the availability of different products.
Falkenstein said Fischer USA works closely with large growers and provides those growers with direct communication so they can get immediate “resolution and answers” to questions and other related issues.
Communication helps everyone be successful. “The business we are in is all about relationships whether they are internal or external,” Trellinger said. “We are working together with both the grower and the retailer” to ensure everyone’s needs are being met.
“We want to get plugged into [the growers] well enough so we can help them solve their customers’ problems,” Falkenstein said. He added they do this because “we want to support the grower in his relationship with the retailer or the consumer — whoever it might be.”
Fischer USA at a Glance
Nestled in the Rocky Mountains, Fischer USA markets and distributes more than 420 varieties in North America of geraniums, New Guinea impatiens, vegetative spring annuals and poinsettias from the breeding of Fischer Germany and Goldsmith Seeds.
Fischer USA’s cutting production for North America comes from over 125 acres of greenhouses for unrooted cuttings in Mexico, Ethiopia and Portugal as well as rooted cuttings from three contracted locations and 23 licensed “Root & Sell” locations. The company has 16 employees in Boulder, Colo., and one in Gilroy, Calif.
The New Parent
Earlier this year, Swiss agribusiness conglomerate Syngenta AG purchased Fischer USA’s Germany-based parent company. Falkenstein and Trellinger said during Syngenta’s due diligence prior to the purchase, the company realized major differences in the U.S. floriculture market compared to Europe. As a result, there really have not been any major changes in the way the company operates since the sale. In fact, the co-presidents believe growers will see a stronger and more reliable supply chain.
At the time of the sale, Falkenstein told GPN that both Fischer and Syngenta valued all of their existing relationships with customers, suppliers and other partners. Falkenstein said that going forward there will be even stronger support for the market channel and current structure of the company — meaning there would not be any changes with companies like Goldsmith Seeds, who partners with Fischer on the Goldfisch product line.