Branching out - diversification

Following a tough spring for plant sales, Jonathan Tilley asks whether ornamental growers need to diversify to survive

Lowaters sold plants outside its core garden centre market - photo: Lowaters
Lowaters sold plants outside its core garden centre market - photo: Lowaters

With outdoor retail plant sales 48 per cent down in the first three months of 2013, retailers have suggested that ornamental growers need to diversify in order to survive. With the industry hit hard by the poor weather of 2012 and then the coldest March on record this year, is diversification the way forward?

Many growers stress the difficulties of trying to sell into new markets and make the point that when the weather is bad, no plant lines sell.

Responding to a suggestion by Garden Centre Group chairman Stephen Murphy that ornamental growers need to diversify seasonally because of the volatility of weather season-to-season, Woodlark Nurseries managing director Colin Edwards said it was not as easy as retailers changing to other lines.

"Our core buildings are growing units, so what can we do with them?" he asked. "Changing to growing perennials, shrubs, herbs or whatever plants you suggest will need decent weather to sell them."

Blue Ribbon Plants is primarily a bedding grower, but has moved into perennials and shrubs. Sales manager Philip Sanders concurs: "We're a specialist in the products we do. We have diversified, but if the retailers don't have the footfall, we've had it."

However, he suggests the increasingly erratic weather conditions could be bringing the industry closer to a point where it would have to reconsider how it approaches business. "We're definitely at that situation where we have to rethink the whole thing," he says.

Lowaters Nursery director Charles Carr says that while the nursery did sell plants outside its core garden centre market to some landscapers and mail-order companies, diversification requires a clear plan.

"If you want to diversify in a difficult year, you need to put a bit of effort into it," he maintains. "If you're having a tough time and you ring around all the landscapers, they've already got their suppliers.

"For big landscaping planting, they want large amounts for low prices and because we have limited space, we don't want to grow high-volume low-margin lines."

Product development strategy

Consultant Neville Stein suggests that while diversifying into something completely out of your sector is a risky strategy, growers should be looking at new products and markets to sell them to.

"What I think retailers are suggesting and what growers need to do is find new markets for their products or find new products for their existing markets," he says.

"What growers need to do is some product development, finding new products for the garden centres they sell to. This is an ongoing strategy growers need to be following.

"They need to be identifying new types of plant and new ways of packaging them - it's not just new products but also new ways of presenting them. They need a product development strategy."

He adds that this product development was a medium risk and growers can reduce the risk by thorough research.

"There are some really great players out there, looking at new products, establishing exclusive rights for plants and working on new ways of presenting them," he says. "Our industry doesn't lack the ability to innovate."

Carr recognises the advantage of product development and the nursery is broadening its range. "We grow a deliberately wide range in small batches, so our availability list changes every week," he explains.

"We propagate 80 per cent of what we sell and we try to include interesting and different plants which will hopefully give us a bit of a competitive advantage."

He stresses that a wide range does not help if the weather is poor, however. "If there's no footfall in garden centres there's nothing we can do," he says.

Bransford Webbs has taken many steps to diversify seasonally, such as a Cut Your Own line intended as a June promotion. It also grows trees, for which most of the work happens in winter with sales in early spring.

"It's a long-term investment as far as the crop is concerned, but it's helpful in extending the season," explains managing director Geoff Caesar. "A lot of our research and development has gone on looking at products to extend the season."

But he maintains that the returns from products outside the spring season will always be limited. "With reasonable weather, you can rely on a busy spring, but at other times of year it's more hit and miss. The footfall is not there in garden centres. It's a challenge trying to get consumers in the mindset where they will do some spending.

"Our trees are going in at other times of the year, but most of the sales are in spring. Garden centres want to have stock because they get some sales in autumn, but the industry accepts that spring is the busiest time."

He adds that any diversification is risky. "We all work on it and we all have things we can do. The more bedding-oriented you get, the more you can do, but it is risky. We've tried but it's easy to get your fingers burnt."

Forward planning

Stein admits that nothing can help if the weather is really bad, but maintains that planning ahead is important.

"If they stopped and thought about it five years ago, they might have thought the weather is becoming so unreliable we need to make plans, and then they wouldn't have been so affected now," he suggests.

"We're dependent for success in business on things outside our control and it's about how to minimise risk. How do we as business owners take more control?"

He adds: "When the weather is good you have to maximise the sales opportunities and benefit from it. At other times run your business as lean as possible to cover you during the bad times."

A number of wholesale growers are moving towards selling plants to members of the public. Many are establishing retail outlets, such as Welland Vale Nurseries which is planning a plant centre, while Jacksons Nurseries is happy to sell direct to the public if the orders are large enough, although not at wholesale prices.

Coblands Nurseries saw an opportunity to develop a new revenue stream and now has a retail business, primarily online.

Sales manager Lewis Normand explains: "We are a large production nursery and produce a tremendously broad range of plants each year. But our product is intrinsically the same in terms of quality and size as you would find in a garden centre, so our retail customers are often surprised that an online mail-order supplier can deliver two and three litre plants as standard.

"We see no reason why we shouldn't sell to both types of customers, but want to manage them appropriately and to price them accordingly."

He adds: "Examples like Hillier Nurseries have very successfully developed retail and wholesale wings and we are moving in this vein."

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