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Ornamental Outlook® magazine goes on location at TPIE.
PLANTS FOR PROFITS
Leading growers shared ideas at TPIE on how to maximize dollars in the ornamental plant business.
Big-name speakers, a fresh format, and a new time slot made this year’s Ornamental Outlook event at the Tropical Plant Industry Exhibition (TPIE) a memorable experience. Switching from a Saturday breakfast to a Friday lunch helped draw nearly 100 growers and show goers to a special panel discussion on plants for profits, sponsored by Chemtura. Kerry Herndon of Twyford International and Kerry’s Bromeliad Nursery, Gary Hennen of Oglesby Plants International, and Reginald Deroose of Deroose Plants were the featured speakers. Following are a few highlights gleaned from the discussion:
According to Herndon, there are two groups in the market: groups that have money and no time and groups that have time and no money. To reach the first group, he advises making your product simpler, longer lasting, and a reasonable value. "If you’re in the plant business, you’re out of business," he said. "I’m in the home décor and the gift business, and if you’re not in that business, you’re in trouble."
"It really isn’t all that important what you grow, but how you grow it, the quality that you end up with, and the markets you choose to target," said Hennen.
According to Deroose, a key to lasting business is keeping your plants exclusive and controlling the amount of product going to the market.
Hennen said profitability is all about watching labor costs. "We try to automate whenever and wherever possible," he said. Deroose agrees reducing labor costs is a major factor in achieving profitability, and has plans to start a tissue culture lab in China.
When it comes to growing plants for quick turns, Herndon observed that insects love plants that grow really fast, and Hennen warned that fast turns mean you have to add more labor and handle more product. "Quick turns only work if you can control the quantity in the market," said Deroose. "If a plant turns quick, everybody can turn it quick."
In discussing opportunities for change that can help growers be more profitable as they rebuild from hurricanes, Hennen recommends taking a hard look at what structures survived the storms. "Take the opportunity to reorganize, especially if you inherited a facility that is 10 or 20 years old," he said. "Look for ways to minimize labor and improve the flow of product through the facility." Herndon said, "Just because you’ve done what you’ve done in the past, doesn’t mean that’s what you have to do in the future. It’s time to take out a sheet of paper, do the math, and figure out how to optimize your return on your investment."
How do you price plants for profitability? "Some growers look at a competitor’s price list and cut it by 25¢ or 50¢ and think they are doing great," said Hennen. "That’s not the right way to do it. You have to know your costs to set your prices."
"Think about who your competitors are," said Herndon. "It’s not the people in this room; it’s the 40,000 items in the grocery store. Plants have to be the better relative value or we don’t capture the consumers’ dollars. How are we improving product value for consumers? If we’re not improving it, we’re going backwards."
Deroose said pricing depends on what the consumer is going to pay for the plant and what the cost of production for the grower is.
Thoughts on the "Wal-Martization of America," according to Herndon: "Wal-Mart said we sell for less and we guarantee the lowest price all the time. Tide is Tide at $1.99 or $1.88. But if you are buying the cheapest ornamentals, it’s probably not a good idea and isn’t the best stuff. It’s a strategy that doesn’t translate over to the plant category intelligently."
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