Capitalize on your strengths

Aim to be more profitable in 2020 by focusing on the premium crops you already grow well.


Photo © amirul syaidi | Adobe Stock

Digging around for more profitable crops for 2020? The best place to start might be with the premium crops you already grow well. While crop diversification and a deeper selection can certainly help you grow sales and expand your customer base long-term — as well as serve niche markets — selling more of what you already do best can be a quicker path to increased profit. 

You know how they always say it’s more expensive to recruit new customers and employees than it is to grow the ones you already have? The same adage can apply to your greenhouse crops. Make sure you’re capitalizing on your strengths first, before you invest in improving or marketing new or less profitable crops.

Be the go-to

There are a lot of growers growing the same plants out there. As a buyer, it can sometimes be hard to distinguish one grower’s selection from another’s. It’s understandable; everyone needs to make a profit and certain crops are in bigger demand than others. But homogeny and an abundance of commodity crops don’t help you stand out from the other growers in your region. It certainly doesn’t help you command larger margins.

When a customer has a go-to top-notch grower they trust for, say, lavender or edible crops, chances are they’re inclined to buy more of other items from said trusted grower. If you’re the only grower who offers a species, or you clearly grow it better than everyone else, you have a serious advantage with which to build your market share. Why take up valuable bench space with more new items before you leverage the premium crops you already do best?

Be the expert

When you’re considered the expert on a specific crop, you can not only expand your sales on it, but garner tailwind momentum off it for other crops. It’s typically more cost-effective to buy bigger orders from fewer vendors, if you can get more of what you need from those vendors. If buyers must come to you for your top-notch organic herbs, you have a great opportunity to increase their average sale with you on other items.

Run the numbers

It’s easy to rely on gut feelings and anecdotal observations when you’ve been growing for a long time. But if you take the time to dig into your hard inventory data to track trends over time, you might be surprised by what is or isn’t selling as well as you thought. By not regularly checking in with the data, you could be missing out on significant sales and profit opportunities.

As inventory turns slow on an item, so do your overall sales and profits. It might appear a crop is doing fine because you’re selling through production. However, in analyzing your data trends you might realize it’s taking you four more weeks to sell through the same quantity than it did three years ago. To increase profits from the same square foot of growing space, you need to get more inventory turns out of that square foot in the same time period. If you can also increase the mark-in margin (increase price relative to cost) for the item while you’re also increasing turns, even better.

You know how they always say it’s more expensive to recruit new customers and employees than it is to grow the ones you already have? The same adage can apply to your greenhouse crops.

When you find that certain items aren’t turning as much or as quickly as you need, don’t be afraid to cull them from the herd, especially if other growers in your market already offer the same item at a competitive price. Let them sell it. Wouldn’t you rather sell more of an item you can sell faster and for a higher price? You may be better off expanding production of your key top-selling item/s and removing slow turners from your production schedule. Being a good grower isn’t just about growing what you do grow well — it’s knowing when not to grow something. Good editing goes a long way.

When was the last time you did a serious analysis of your category and product sales reports? If it’s been a while, now’s a good time to do a deep dive into your data.

Risks and returns

It’s no secret that many growers are reticent to make significant changes to their offerings. Ok, let’s be real, some of you have your heels dug firmly into the ground and you’re not budging. I’ve seen availability lists that look almost identical to what they did 15 years ago. But in a changing market, consumer preferences and climate can’t be ignored. And you won’t always have the same customers you did 15 years ago. Differentiation is key to success in both good and tough markets.

Nervous about increasing availability on key items, potentially growing a smaller selection? There is always a risk associated with offering a larger quantity or longer availability period for a specific crop. No one wants to get stuck with unsold product. But that’s where good marketing comes in.

You might also consider increasing production on key items with pre-booked orders only. If you are the go-to grower for a specific crop, then customers will be willing to pre-book with you — especially if that’s the only way they can get the premium product they need from you when they need it.

The better job you do pre-marketing your go-to premium crops, the more of them you can get sold faster, or even pre-sold. How loud are you about what you do best? If you aren’t leveraging your premium crops as frontrunners in all your marketing efforts, you’re giving up premium profits.

Leslie (CPH) owns Halleck Horticultural, LLC, through which she provides horticultural consulting, business and marketing strategy, product development and branding, and content creation for green industry companies. lesliehalleck.com

September 2019
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