A Winning Bet

June 11, 2008 - 09:28

From the beginning, Michigan-based Grand Flower Growers, Inc., took a chance with Home Depot.

In 1999, brothers John and Todd Mossel, along with good friend Steve Mulder, had visions of “doing their own thing,” recalls John Mossel. The childhood friends — now the kind of business partners that can finish one another’s sentences when they’re not poking fun at each other —  had worked in greenhouses since their youth but were eager to run a business of their own. That year, they purchased 81 acres in Wayland, Mich., and got to work selling bedding plants to Home Depot through a brokerage company.

Almost a decade later, Home Depot remains an integral part of Grand Flower Growers’ story. They do almost 99 percent of their business with the big box giant, supplying annuals to 36 Home Depot stores in central and south Chicago. “Over time, it really developed into pretty much all Home Depot business,” says John Mossel.

And as risky as it might seem to put all their eggs in one basket, the partners see their unique business model as a clear advantage: “It really gives us a very single focus. We’re not pulled in 100 different directions,” he says. “Our focus is one customer and what we can do for that one customer to make it a better shopping experience for their consumers.”

Going the Extra Mile

It appears that Grand Flower Growers’ gamble is paying off. During the first seven years in business, they built a new greenhouse every year to keep up with the growing demand. These days, the mostly bedding plants operation spans 260,000 square feet of production — in addition to also buying a significant amount of product from contract growers. “They’re a key part of our business,” Mossel says. “They really helped us be able to expand our market share and produce a high-quality product at the same time.”

Whether working with their contract growers or serving The Home Depot, fostering trusting, mutually beneficial relationships is the name of the game. In fact, Mossel says, relationship management has been vital to Grand Flower Growers’ survival and success. “We try to do the best job possible with them,” he says. “We try to do the extra thing, go the extra mile, work on programs, help them as much as we can.”

It’s this effort that helps offset some of the risks that come with supplying to only one customer in an uncertain economy. In spite of some of Home Depot’s recent hardships, the garden department keeps going strong. Grand Flower Growers’ goal is help make sure it stays that way, says Mossel: “The garden department has really done well the last couple of years. We’re helping that cause… The other part of it (home improvement) will come around.”

Reaping the Rewards

The three partners agree that the rewards of their business model are more compelling than the countless “what ifs.”

“We try to keep focused on the positive part of that rather than ‘What happens after?’ or ‘What do we do when?’” says John Mossel. “And that’s production.”

Doing business with one customer helps simplify what can be a daunting and demanding process, often leaving management with little time to go that crucial extra mile. At Grand Flower Growers, “Planting is easier. Pulling is easier. We can really concentrate on that customer and that customer’s needs. We can introduce new and exciting programs and ideas for them without feeling like we’re stepping on anyone else’s toes,” he says.

Breaking Into a New Market

Just because the Mossels and Mulder are perfectly content with their one-customer model doesn’t mean they don’t like to mix things up in other areas. When asked what sets them apart from competitors, John Mossel doesn’t miss a beat: “We work hard on improving what we’re currently doing and constantly making adjustments to improve our mix and our quality.”

This spring, Grand Flower Growers is trying something new. They are experimenting with a little diversification and tiptoeing into the trees and shrubs market. The program is very new, Mossel stresses, and they’re currently just trying to “get a handle” on their new venture. They will be conducting a 10-store market test to see whether the new program will be a good fit.

Managing Growth Wisely

As much as Grand Flower Growers is focused on The Home Depot, they don’t lose sight of the importance of doing what’s best for the end consumer shopping the big box’s garden departments — and they don’t forget about their own bottom line.

“Let’s do the right thing for Home Depot. But at the same time, we have to make sure we maintain profitability so we can have a long-term relationship; for us, it’s not just a short-term thing,” says John Mossel. “We try to make sure we provide a good shopping experience for the end consumer and offer new and exciting items to keep them coming back.”

At times, finding that delicate balance between what’s right for Home Depot and their own business can seem like a juggling act — especially when it comes to expansion plans. The challenge is how to grow and meet Home Depot’s needs in a way that makes sense for their business, Mossel says.

For Grand Flower Growers, part of the answer has been to work with contract growers: “We rely on them. They help us expand our market share without us having to put hundreds of thousands of square feet of greenhouse up,” he says. “Yes, we’ll expand. We’ll take more market share. We’ll grow with Home Depot as they grow. But we also try to be smart about it.”

Three Peas in a Pod

In a competitive market and shaky economy, having business partners you can really trust makes all the difference. As Todd Mossel puts it, “our personalities really complement each other.” His brother, John, agrees, saying the three rarely have to solve business disagreements with a vote. Instead, they talk and listen to one another, and are usually able to come to an agreement that allows them to accomplish their mutual goals.

The three divvy up the responsibilities of running a business by playing up one another’s strengths. Steve is in charge of most of the actual growing and day-to-day production. John does sales and merchandising, and Todd handles the general management of the greenhouse.

Employing “Eyes and Ears”

When it comes to merchandising, Grand Flower Growers doesn’t underestimate the importance of having their own staff at their stores. A merchandising staff of up to 200 employees in the spring (with a core of 17 year-round staff) is tasked with keeping the product looking good and engaging customers.

“They are 100 percent, no doubt, the key to our success,” says John Mossel. “They are our eyes and ears out there. They let us know what’s moving well, what’s not moving well; how the stores look; how did they survive the storm on Friday; what needs to be thrown out, what needs to be brought back in.”

Pay By Scan: A Learning Curve

With pay by scan, it’s always a learning process, says Todd Mossel. Successfully navigating pay by scan starts with sending out the highest quality product possible and adjusting your product flow as necessary, adds his brother John: “You have to start out with high quality, get it down there, and maintain that high quality with merchandising.”

Pay by scan also demands paying close attention to what is and isn’t working in your stores — and being willing to adapt, says John Mossel. “Every year you learn something, and every year you adjust.”

Making sure that they’re flowing the right product to the right stores is essential, he says. After all, not all Home Depot stores are created equal. “We have some stores that are in some neighborhoods that don’t have that high income, compared to some of the downtown stores,” he says.” We don’t send $40 combinations there; we send a lot of $9.99 baskets.”

Industry Challenges

As they look to the future, Grand Flower Growers seeks ways to offset industry-wide challenges such as soaring shipping and energy costs. In Michigan, it’s no secret that winters are “very dark, very cold,” which sometimes translate into an uncertain spring season. “Springs are difficult around here. You can be going gangbusters one day, selling like crazy, and then a frost hits,” says John Mossel.

Perhaps their biggest challenge right now is their shipping and fuel costs. “Compared to last year, it’s unbelievable. And it’s the hardest one because it’s so out of our control,” confides Mossel. But the answer is not to jam more products in a truck or raise prices. Instead, they view it as inspiration to come up with better, value-added products that can fetch higher prices in the marketplace.

But along with the barriers, John Mossel says he also sees some promising opportunities for growth, especially in the area of sustainability. “I think the door is really going to swing open,” he says. “There will be a pretty big opportunity for sustainable products…that will be more profitable and also more consumer friendly.”

Betting Big

The Grand Flower Growers’ story is one of brilliant relationship management, smart growth and a willingness to gamble high in the hopes of winning big. The three friends behind Grand Flower Growers say they don’t have any big plans to diversify in the future. They plan to keep fine-tuning the business model that’s served them so well these past nine years. And they’re not just betting on Home Depot’s (Department 28, in particular) ability to weather tough financial times and become an even bigger destination for garden center shoppers — they’re committed to helping them get there. “It’s in our best interest to have all of Home Depot succeed,” says John Mossel.

SIDEBAR

Lessons Learned

As a relatively young company experiencing success supplying to Home Depot, partners John Mossel, Todd Mossel and Steve Mulder have a unique perspective on how big growers can keep their businesses thriving — and big boxes happy.

Align yourself across the board with talented people. From their merchandising team to their contract growers, Grand Flower Growers try to surround themselves with knowledgeable people who can bring something valuable to the table.

Don’t be afraid to change. Change is constant. The partners view each passing year as an opportunity to reassess and learn. And when something’s not working out, they don’t hesitate to make the necessary adjustments.

Keep things simple. There’s no need to overcomplicate things. At Grand Flower Growers, they value simplicity. That’s why they stick mostly to buying flats and baskets from their contract growers. “That’s a pretty consistent place in the market,” says John Mossel. “We know we’re going to see a lot of flats.”

What’s in a Brand?

Grand Flower Growers is intimately familiar with the rewards of branding — when done right. John Mossel says that at a time when there’s concern about “having too many brands” in one store, branding can be a powerful marketing tool. “It’s all about how you manage the brand. Managing is extremely important. The No. 1 way you manage your brand is by not crossing product over.”

Although they started out with their own house brand, they eventually went with the Proven Winners brand to take advantage of their marketing and consumer-research opportunities, says Todd Mossel.

Being consistent with their branding also inspires customer loyalty and keeps them coming back, adds John Mossel.

About The Author

Darhiana Mateo is associate editor of GPN’s Big Grower. She can be reached at dmateo@sgcmail.com or (847) 391-1013.

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