Ringing Up Results

October 17, 2008 - 09:35

The parking lot of the Home Depot store in Columbia, Md., looks like just about any other suburban Home Depot. But when you enter this store’s lawn and garden department, it is like you have walked out of a big box retailer and into an impressive, high-volume independent garden center.

What does it take to make a Home Depot look this good? If you ask Gary Mangum, he just smiles. Then he will tell you it all revolves around high-quality production and a comprehensive approach to merchandising.

That’s what makes all of the 180 Home Depot stores that Bell Nursery services look so good. It is also the foundation for Bell Nursery’s success. Mangum, along with his brother-in-law, Mike McCarthy, are partners in Bell Nursery.

Headquartered in Burtonsville, Md., Bell Nursery is one of the largest suppliers of bedding plants, tropical plants, perennials and shrubs in the eastern United States.

Bell Nursery’s business model is a bit different than a lot of other large growers. Instead of using contract growers, the company has set up a network of growers that produce product exclusively for Bell to sell at Home Depot stores in Maryland, Virginia, North Carolina, the District of Columbia, Delaware, Pennsylvania and Ohio.

This network, along with a wide-ranging merchandising program and fundamentally sound business practices, has allowed Bell to ring up impressive market share throughout the mid-Atlantic region as well as in Ohio.

“We are very much focused on having efficient and timely distribution, a strong merchandising program and high-quality production,” Mangum says. “The key to the ability for us to grow is to not have the capital tied up in facilities and facilities management. Instead, we invest a lot of that same capital in people and in the [Home Depot] stores.”

Tuning Into the Right Network

Bell Nursery relies on a network of more than 40 farm families (producing 2 acres or less) for about 65 percent of the product that the company sells at Home Depot. McCarthy and Mangum say these network growers are critical to Bell’s success.

The balance of the company’s product comes from Bell’s own in-house production and traditional growers who are contracted to grow for the company.

“Most of the product comes from our own network of growers who have built greenhouses specifically for us — to our footprint, to support our model,” Mangum says.

Bell signs a multiple-year agreement with the families to grow crops to Bell’s specifications, Mangum says. The network grower receives plugs that are planted at a Bell facility and “packaged” to the company’s retail specifications. Once the network grower finishes the plants, they are shipped back to a Bell facility. There, Bell Nursery loads them onto the appropriate trucks and sends them to Home Depot stores in Maryland, Ohio and Virginia. Network growers pay for the plants and take ownership of them while they are growing them, Mangum says.

McCarthy says it is crucial that the plants come back to Bell the way they are expected; otherwise, he cannot sell them at Depot. “If it doesn’t, we don’t take it,” he says. And nobody wins in that situation.

The network growers are predominantly poultry and tobacco farmers in Virginia and Maryland. “These are people that have a real strong work ethic. They understand what it is like [to work] seven nights and seven days a week. They understand harvest discipline, which is important to us,” Mangum says.

According to Mangum, Bell Nursery’s head grower, Tom Wheeler, has developed a “production recipe” that makes it possible for the network growers to succeed. Wheeler, along with other Bell range growers, visits the network growers on a regular basis, “teaching and coaching” the growers on what they can expect and helping them solve any problems they may encounter. Mangum says this hands-on training approach is beneficial to all parties.

“The investment we make in teaching is strong” and pays off in product quality, he says. For financial planning purposes, the growers plan on a two percent spoilage rate, “but most of our growers have well under one percent spoilage because they execute so well.”

McCarthy and Mangum agree the network setup provides security for Bell, the growers and Home Depot. By not keeping all the proverbial plants in one hanging basket, with everything “compartmentalized” into smaller greenhouses, “barring a large, natural disaster, nothing could interrupt our flow of product into the marketplace,” Mangum says. “That is a beautiful thing for the growers and Home Depot from a risk-management standpoint.”

Mangum continually praises the network growers. “They absolutely care about what they do.” And thanks to their caring attitude, Bell’s product quality continues to improve every year, and sales continue to climb.

As these growers establish themselves and meet their annual commitments, the company will give them increased growing responsibilities if they choose to expand. Growers typically start on a half-acre and expand after their initial success. Mangum calls it “gratifying and personally satisfying” to see the growers succeed.

Mangum also says it isn’t too hard for Bell to find new network growers. “Farm Credit Services has become our best resource for referrals,” he says. They have a list with more than 50 names of potential growers on it, and he knows 20 of them are generally prequalified by Farm Credit Services to build greenhouses and start growing as soon as demand warrants.

Mastering Merchandising

The network growers produce high-quality plant material for the Home Depot stores, but everyone knows what a few days at retail can do to a good-looking plant. That’s where Bell’s merchandising team steps in.

The quality of the product and the displays at the Columbia Home Depot that Gary took us to were exceptional. It was fully stocked with bedding plants, annuals, potted plants, trees and shrubs. In fact, there was even sod growing on the blacktop in the parking lot as part of an entry display.

Two merchandisers were working the store while we were there, watering plants, stocking shelves, ensuring the “Locally Grown” signage was displayed properly and making sure the entire department looked good. Bell’s employees are responsible for merchandising all of the products in the department except for packaged roses and bulbs. “We are responsible, on a VMI (vendor-managed inventory) basis for everything in the department. The senior merchant that we work with, Mike Duvall, has ultimate responsibility for the mid-Atlantic region, and we work closely with him and his partners in the other regions to make sure we execute the strategy as they intend.”

Bell’s internal merchandising website, www.bellimpact.com, features the company’s guiding philosophy: “Bell Merchandising drives garden center sales while simultaneously helping to create a positive shopping experience for the Home Depot customer.”

“The people working in the stores clearly make a difference in what we do,” Mangum says. “We are really good at caring for the product in the stores. We are really effective at getting the product in a store and then getting it in a display that is really appealing to shoppers, but in particular, we are working hard to attract and retain female shoppers. We know they need an organized, well-maintained environment to be most comfortable.”

According to Mangum, Bell has more than 1,100 employees working during peak periods on the service side of the business, merchandising the 180 Home Depot stores. Paul Chisholm is in charge of Bell’s merchandising program.

“The key is making sure we get all of the service team through our training program,” Mangum says. That can be difficult because of the peaks of a season, “but we do have internal processes in place where we coach new employees and bring them along if they haven’t received the full preseason training.”

Sustaining Success

Even in a tight economy, Bell Nursery continues to grow its business. Last year, the company acquired Ulery Greenhouse Company in Springfield, Ohio, and Virginia Growers in Montpelier, Va., earlier this year. And Bell Nursery is working on additional expansion plans.

“The business model does support growth in areas that we don’t do business in today,” Mangum says. “The key to any expansion is to first have a very satisfied customer earning a good return on our products and, second, be able to grow the business with the same quality focus and profit expectations over time.

“The bottom line is if we make the investment to grow the product, grow it right and put it out there in an appealing way, then the customers who visit Home Depot are going to buy it.”

SIDEBAR

Talk to Me: Communication is critical at Bell Nursery

Gary Mangum is always on the phone talking to partner Mike McCarthy; the production, business and service team; local, regional and national Home Depot managers; as well as other growers and suppliers to keep himself in the loop and prepared to minimize surprises. The partners’ actions seem singularly focused on driving business at retail.

Tom Wheeler and his team of range growers are in constant contact with all of the network growers, making weekly visits to their greenhouses to ensure there are no production problems and to answer any questions the growers may have.

“Our key people are always in communication with the key people at Home Depot,” from the regional level to the district level, to the individual store level. “We work really hard to develop, maintain and grow our relationships” with Home Depot, Mangum says.

Bell’s regional merchandising managers are always talking and keeping each other informed about what is happening in their respective markets. And the store merchandisers work in concert with Home Depot associates to ensure shoppers have a positive shopping experience while they are in the garden center.

By maintaining communcation, Mangum says, everyone stays up to date and can learn from one another.

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