What a great question: “Remember when?”
I like to put that in the same group as the “good old days.” When you have the chance to read this edition of Big Grower, the end of summer 2008 will be fast approaching. As I left the trade show floor at the OFA Short Course, I found myself thinking about where we are today and some of the things that certainly will change the complexion of our industry forever.
The first will be the continued consolidation of vendors that participate in the industry. All the big box retailers are looking at the cost of maintaining vendors that sell to their stores. The Big Boys have decided — it appears — that they can get by with a lot fewer choices in vendors. Growers are deciding that they can get by with a lot fewer choices in hard line suppliers. The thought is that it is much better to consolidate purchases than try to buy from a lot of different companies.
If you happen to be a grower that was cut as a supplier, you have some definite decisions to make. “Do I walk away completely?” “Do I sell my business?” “Do I become a contract grower for one of the chosen big box growers?” “Do I step back and look at the strengths of my company and then really build on them?” One thing is for sure: You’ll have to realize and accept that you cannot continue to do business the same old way as in the “good old days” and expect to survive.
The Energy Challenge
The second catalyst for change will be energy and energy pricing. To state the obvious, prices are high and probably will get higher. As important as production planning is, we see more and more growers formulating an aggressive energy management plan.
Elements to consider in formulating your plan should include alternative sources of energy, greenhouse structure modifications to better hold and use energy, revamping of delivery minimums (both carts and dollars), adding varieties that can be produced at cooler temperatures, reallocating greenhouse square footage to produce more plants per bench and employee-awareness training on energy conservation.
Growers will be more motivated than ever to partner with other growers as well as customers to maximize delivery and truck usage. So I have to ask: Do you have an energy management plan for 2009 and beyond?
Protecting Yourself from Consolidation
The third area I see changing is the question of who owns the plants, who handles the plants and, most importantly, how to protect the ability to sell plants to the big box retailer. I know that sounds a little strange, but I spoke during OFA to a grower, known for superior quality and service, who was eliminated as a vendor for pot crop programs at a big box. The problem? The retailer decided to drop the category.
Additionally, I have become a little concerned for growers as mass retailers look hard at moving to a consolidated sales and service-replenishment model. If I am a grower, how do I keep my identity and visibility with the buyer or store when I no longer am in control of the sales and merchandising? Maybe now is the time to reconsider the idea of consolidation of business with such a small group of retailers.
Live for the Future, Not the Glory Days
We at the Visions Group have the pleasure of talking with a lot of growers about a variety of topics, and we are hearing this comment more and more: “Dave, do you remember the ‘good old days?’” Ah, yes, the good old days.
A press release came across my desk the other day containing some business advice from Frank Blake, chairman and CEO of the Home Depot: “Don’t let your memories exceed your dreams… When your memories exceed your dreams, the end is near.
“When an organization starts speaking like that — when a business starts thinking about things that way — you are losing what drives a business forward, and you are replacing it with people who like to chat about how it used to be,” he wrote. “The memories are interesting, but it is the dreams that drive us.”
It’s dreams that will shape this industry, as will the changes that continue to present themselves. Consumers love our product, and they love to buy it. Push hard — plan well, and let’s drive for new dreams to shape our industry.