Words of Encouragement

January 2, 2002 - 06:53

With my November editorial, I had hoped to end my campaign against the big box store’s treatment of growers, but developments since last month — in the form of additional policies from the boxes, their effects on growers of all sizes and a continuing cry from the industry — compel me to give another update.

Let’s start with the worst news. In addition to the
recent Florida closings of Suncoast Greenhouses and Fernlea, I have heard of
closings from California to Michigan to Iowa to Georgia. These are operations
from the very smallest mom-and-pop types of less than 25,000 sq. ft. to solid,
mid-size growers of 250,000 sq. ft. to the largest growers 1 million sq. ft. or
more.

Upon hearing about the demise of a competitor, any smart
business owner has to take a look at their own affairs. When announcing their
close of business a few months ago, David Wadsworth of Suncoast named
consolidation and “big box pressures” among their troubles and
advised the industry to “take careful stock of where we are at and where
we are headed,” adding, “please check your own pulse
carefully.” I know lots of greenhouse owners have been taking a hard look
at themselves after hearing of the unexpected close of this 18-year-old
business, and those that didn’t can’t help but do so with the
latest closing announcements.

I was recently with a group of industry professionals
talking about these latest developments when a very frightening prediction was
put on the table, and yes, the source is a very well-respected member of the
industry who will mercifully remain nameless (you can thank me later). This
gentleman predicted that we would see a 75-percent decrease in the number of
large growing operations over the next five years due to consolidation and
bankruptcy.

Let’s pretend that your profits have been squeezed by
the box stores; that you have lost a crop because one of your heaters failed,
necessitating a heater replacement; and that your production costs have risen
for the third year in a row because you are using more patented material. Sound
familiar? It should; these are the everyday problems of owning a wholesale
greenhouse business. But let’s add one more dimension: Imagine that your
vendors have decided not to pay your invoice for two, four, even six months.
Could your business take a hit like that — on top of shrinking profits
and heater failures and crop loss?

Well, you might not have an option. Sources, both growers
and allied industries, have told me about new policies at Home Depot and Kmart
that delay payment from 30-60 days, the reported Home Depot figures —
about which Home Depot was unable comment for this article — and 120-180
days, the reported Kmart figures. There is one bright spot in Home
Depot’s offer: Growers, and presumably all other suppliers, will receive
a 2-percent discount — a small return for running a 60-day credit.

A Silver Lining

It’s very hard for me to come to you all with bad news
just for the sake of reporting the news, so here’s my best attempt at a
silver lining:

I’m giving you this news in the hopes that we will all
take Dave Wadsworth’s advice and check our pulses. I hope five years from
now I find that my industry friend, the one who predicted 75-percent shrink in
the big boys, will be proven wrong, and this warning about things yet to come and
about the demise of some of your competitors is my very small contribution to
seeing that he is wrong.

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