|
Greenhouse Management launched an exclusive survey in June on plant brand trends in the greenhouse business. This extensive market survey showed developments that are readily apparent to anyone associated with the industry. Growing branded plants is on the rise, as you can see by the growing number of colored pots and flashy packaging now associated with much of our product.
But not so apparent is the true impact that branding programs have on greenhouse growers. While branded products still account for a relatively small portion of total U.S. production, growers are using them to generate sales.
These are the products that generate calls from buyers.
And given that most buyers will not need a truckload (or entire minimum order) of branded plants, the generic, standard products fill the vast remainder of the purchase.
Schmidt Bros. Inc. in Swanton, Ohio, has invested heavily into branded products in the past several years, said co-owner Bob Schmidt. The company grows several lines of national brands, and launched its own line of vegetables named Homegrown Gourmet.
And while branded material at Schmidt Bros. still accounts for only about 35 percent of total production, this is the material the company is touting.
“That’s what we’re promoting at the trade shows. That’s the main interest and what’s attracting customers,” Schmidt said.
Both Homegrown Gourmet products and Ball Horticulture’s Black Velvet petunia were very popular this spring at Schmidt Bros.
“We went heavy into the black petunia this spring, but we could have gone a lot heavier. People seemed to really like it,” he said.
But almost never is a single order at Schmidt Bros. Inc. completely filled with branded material. This is where generic flats and hanging baskets fill the void. But, Schmidt said, if customers hadn’t called on the branded material, the generic products would not have moved.
 
The numbers
Branding of greenhouse crops is not new for the U.S. market. Ball successfully launched Wave petunias in 1995, and this program retains good consumer recognition.
More than 40 percent of survey respondents have been growing branded plants for more than 10 years. But these premium products remain a small percentage of total U.S. output.
More than 60 percent of survey respondents indicated that branded material makes up less than 10 percent of their total production. Only about 10 percent said branded products make up 75 percent or more of their production.
The market is almost divided into equal thirds among growers who plan to grow more, less and an equal number of branded products two years from now.
The biggest players in the branded plant market, according to the Greenhouse Management survey, are Proven Winners, Ball Horticultural, Sakata Ornamentals and Dümmen USA. More than 80 percent of respondents indicated they grow some type of Proven Winners product.
For Ball programs, almost 57 percent grow Wave petunias, 34 percent grow Simply Beautiful plants and almost 12 percent grow Burpee Home Gardens plants.
More than one in four growers grow Sakata’s SunPatiens line of impatiens. Nine percent of growers participate in Dümmen’s Confetti Garden program and 7.5 percent grow Dümmen’s Potunia petunias.
Growers appear to be happy with these programs. Only 12.7 percent indicated they were not satisfied with branded plant programs, while 5.1 percent said they were satisfied with some, and not with others.
Making money
But a key for growers is pricing branded product so that they get the necessary margins to cover extra costs associated with them.
One third of all respondents said they’re getting only 5 percent extra margin dollars over non-branded plants. More than 57 percent do not get 25 percent better margins with branded plants.
 “All the extra things you have to do for the branded plants is a challenge,” said Gary Knosher, president of Midwest Groundcovers in St. Charles, Ill. “The colored pots, the stakes, the labels, the royalties and all of that are a challenge. The branding sells more plants, but we have to be careful to make sure we charge enough for all these extra hoops we have to jump through so we can make more money on them.
“I’m afraid at times that the customer doesn’t differentiate the value of a branded plant vs. a standard plant and we end up keeping the price too close. We should have a bigger price difference between a branded plant and a non-branded plant because of all the extra costs that go into making one,” Knosher said.
And ultimately, for a plant brand to succeed, there has to be a combination of good genetics and promotion.
“For a branded plant to be successful, you have to have a great plant with great marketing. If you only have one of the two, it’s not going to fly,” Knosher said. “Great marketing with a halfway plant is not going to make it and, likewise, a great plant that is only halfway promoted is never going to reach its full potential.”
For more: Schmidt Bros. Inc., www.schmidtbrosinc.com; Midwest Groundcovers, www.midwestgroundcovers.com.
|
