Freightos.com, a global freight booking platform, released marketplace data in October pertaining to worldwide freight, shipping and trucking costs and capacities. Here are some of their key findings.
In the wake of the global supply chain disruption, IGCs are getting creative with alternative stocking strategies and pre-planning purchases.
Nearly a year and a half after adapting to the demands of COVID-19, garden center owners have to rethink their business tactics once again as they face a different challenge: servicing the steady rate of customers with barriers to inventory. Now, as the industry fights the global tide of continued pot delays and plant scarcities, many owners have had to shift their strategies to prepare for the coming year and beyond.
Jeff Jones, owner and manager of Great Gardens in Torrington, Wyoming, says that the industry as a whole has been hit hard with tree and shrub shortages. Great Gardens grows many annual plugs and dormant and young perennials to finish. Luckily, he says, they’ve had no issues receiving plant materials. And while his supplier has reported seed shortages, Jones says it wasn’t a significant percentage of product. Occasional shortages and substitutions happen every year, which is expected.
Instead, he worries about plastic goods, specifically, 2.5-, 3.5- and 4.5-inch growing pots for plugs. Jones fears he may not acquire enough growing pots for plant materials. In addition, he says rumors are swirling amongst his industry friends that suppliers that accepted orders may not deliver pots until April — far too late in the season.
If it comes down to it, Jones might buy growing containers at a big-box store, but he says it’s unlikely he’ll need to resort to that. He’s also considering buying peat pots but is cautious due to a previous pot they test batched a few years prior.
“Years ago, I bought quite a few pots from a regional supplier that were made from old paper newspaper because I wanted to try something sustainable. And unfortunately, everything I grew in those pots died, but think I was only out $120 or so,” he says.
When the pandemic hit, Jones pounced at the opportunity to stock up on necessities, with a focus on seed. All vegetables they produce, along with 10-20% of their annuals, are grown from seed.
“I bought extra seed in 2020 because I could see some issues there. And then when I ordered seed again in 2021, I basically ordered seed for everything I need for next year. So, I don’t have concerns for myself as far as that because I looked forward quite a way,” Jones says.
Rick Thomas, who co-owns Bethany Plants and Produce with his wife, Tammy, says they’ve had a tough time getting pots, perennials, Proven Winners varieties and hostas. Some of the plant materials they ordered earlier in the year were so delayed that Thomas didn’t receive them until October. He almost didn’t accept the shipment but decided against it because it’s a gamble to see what, if anything, will be available in the spring. In his experience, vendors take three to six months to fulfill orders, so Thomas purchased large volumes early this year.
“Normally I order a certain amount that I know I’m going to be able to pay for and then I’d order more as the season goes on. I value the credit that I have, and I try to coordinate that as we go along so I can pay for it,” he says.
One of his Michigan suppliers, Mast Young Plants, provided retailers with a discount if they placed orders by Nov. 1, which has helped keep costs down. Thomas notes that ordering early helps ensure the arrival of a consolidated shipment, which allows him to capitalize on shipping.
Located in the rural town of Reidsville, North Carolina, Thomas is hesitant to raise prices, considering they compete with other businesses in the Greensboro market. While they have increased prices a little, the business is eating some of the cost.
“You have to keep your price points at a certain area. Otherwise, you’re going to price yourself out of sales,” he says.
Thomas has had to get creative with substitutes for Proven Winners’ flowering shrubs and notes that most of the variations are selling tremendously well, along with shrubs with unique foliage. Of course, it helps that customers now are looking for different varieties instead of standard options.
“The thing I love about the Proven Winners line is you have lots of different flowering shrubs that are takes on some of the older shrubs,” he says. “For example, a lot of the old yards here have the old-fashioned sweet shrub and the newer varieties of it sell really well.”
“We’re not talking about 10% inflation; we’re talking about crazy inflation. I ordered a pallet and I got that cost down to 15 cents per pot, which is double what it was one or two years ago. But I’m in a situation where I think, ‘Well, I don’t care what it costs. I just need to have it.’”— JEFF JONES, OWNER AND MANAGER OF GREAT GARDENS
Inflation is another issue that’s plaguing the industry. Jones says that 4.5-inch pots, which he sells the most of for annuals, have increased nearly double or triple the cost.
“We’re not talking about 10% inflation; we’re talking about crazy inflation,” he says. “I ordered a pallet and I got that cost down to 15 cents per pot, which is double what it was one or two years ago. But I’m in a situation where I think, ‘Well, I don’t care what it costs. I just need to have it.’”
But being located in Wyoming has its perks. Because they’re so close to Colorado, where most of their vendors are, Jones personally makes a day trip to pick up product, which saves him the hassles of shipping. Although some products, like onions, are shipped from nearby Iowa, the price has drastically increased. So to offset the cost, he raised the price of onions to $1 per bundle.
“It doesn’t bother the consumer too much, but I hate to do anything like that. That type of shipping on those things does make a difference. And sometimes you look at the number on the bottom of the invoice and it’s pretty surprising,” he says.
Karl Auwaerter, owner of Bayport Flower Houses in Bayport, New York, is also experiencing the effects of inflated freight costs. Along with their retail space, they operate a 2-acre growing area as well as a floral shop. Instead of playing the market as he did before, planning is crucial. Like Jones and Thomas, securing plastic production pots, and inventory in general, is a hassle for Auwaerter due to price increases.
“We’re trying to buy inventory that already exists because if we have cash flow, we’ll buy inventory at this year’s prices rather than next year’s prices,” he says.
While they’ve already placed their inventory orders for next year, he predicts there could be an oversupply in the industry two years from now, theorizing it could drive prices down in the future. However, he doesn’t plan on overshooting inventory for two reasons.
“One, buying inventory now is expensive. And I have a feeling that once all these container ships get unloaded, inventory might be cheaper eight to 12 months from now, when we’d have to restock,” Auwaerter says. “Two, I have enough to get through the main bulk of the spring, but if I have to restock I’m kind of banking on the fact that the price will be roughly the same, if not lower.”
He also ceased direct import container orders because the shipping and freight costs had quadrupled. While some “sticker shock” items have increased 10-25%, inflation and shipping have impacted the value of plants themselves because suppliers are selling it through frequency.
“When you’re dealing with Florida and their foliage plants, their prices have gone up a bit, but the plants have become smaller. Of course, the real sticker shock on that comes from the freighting and the availability of trucks,” he says. “So, you have to invest a ton more time and you have to be a little more savvy in the way you order so that you can the material can find its way up … but it’s a cost of doing business.”
Like Jones and Thomas, he’s also had to increase prices but has done so across the board. He tries to buy American if he can.
“I like to price off what I think the product will cost when I have to go out and buy it again. So I raised prices earlier because I needed the money to buy the new, higher priced item the next time I want to restock,” he says.
He strategically waited to raise prices until people had received their stimulus checks for two reasons: First, raising prices when people don’t have money creates problems. Second, by raising prices when people had more cash to spend, they wouldn’t need to raise prices again the following year — especially as customers’ spending habits become more frugal, he says. Nonetheless, Auwaerter remains optimistic and anticipates growth of 8-10% this year.
A technology guide for regular folks
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Independent garden centers are successful for lots of reasons, including product selection, service excellence, effective marketing, beautiful facilities, and compelling events. Having a technology infrastructure to support your operations is, more and more, a critical element of a store’s success. Most IGCs were challenged on many levels last year by the COVID pandemic. Garden centers that previously focused on foot traffic and inventory turns found themselves navigating a whole new world of electronic shopping carts, socially distanced checkout stations and BOPIS (buy online, pickup in store).
Stores that have already embraced technical solutions before 2021 may have had a few extra tools in their kit to enable them to pivot effectively. Now that things are quieting down a little, it is a good time to consider whether your store needs a technology makeover to help you better manage your operations. The goal of this article is to give you a systematic way to approach a new POS solution for your store.
Putting bias on the table, I work for Rapid Garden POS and certainly my role at Rapid colors my point of view. But this article is intended to focus more on things that you should consider as you approach scouting and finding any POS system for your business. My approach for adding or updating your store system can be reduced to a catchy mnemonic:
Everyone comes to deciding to purchase or update their POS for different reasons. Meet with your team and come up with a list of things you want a system to do for you. These can come from specific pain points your store is experiencing (e.g., checking stock availability takes too much time), things you have heard about or experienced as a customer that other stores are doing (e.g., Starbucks sends me a coupon on my birthday), and things that would offer strategic benefits to the store (e.g., if we could better track and manage costs, I could have a more consistent margin on my sales). Focus on business tasks, problems, functions, or benefits. Don’t try to figure out how a technology solution might deal with the things you list.
Put your items into categories to help you prioritize them. I like the following breakdown:
Remember that at this phase, you are just brainstorming. There are no bad ideas here. You will circle back to this list again and again. I suggest that you revisit it during each of the following phases. This document will be your roadmap.
One last thing to remember about this phase (and this is very important) … YOU KNOW WHAT YOU KNOW, BUT YOU DON’T KNOW WHAT YOU DON’T KNOW. Be open to input and new ideas.
We have covered the other points in similar detail, and you can access the full article using the following link or scanning the QR code: https://rapidgardenpos.com/ navigating-the-pos-world/
Deciding to add technology to your operation, and then going through a rigorous process to find the best fit, will help your store in the long run. It requires time and focus at the beginning, but that investment of effort at the outset will help ensure that you have a system that is best suited to support your business for many years to come.
Make your garden center the go-to gift store for all kinds of plant people by suggesting different kinds of presents this year.
In 2017, I wrote that IGCs should take a new look at our practice of making “Gifts for Gardeners” lists every December. My thought then was that most people today don’t define themselves as gardeners, even though they are, indeed, gardening. Although we love the great alliteration of that “Gifts for Gardeners” title, today it’s like saying “Gifts for No One You Know.” It occurs to me four years later that while this is still true, the return to the garden we’ve seen during the pandemic, the increase in remote working and the houseplant revival offer us new perspectives for holiday gift lists. So here are some ideas for you to run with in your newsletters, blogs and social media this December.
Do you know someone who’s drained by the past two years? You’re right … who doesn’t? But for those who are particularly weary of being so out of control, the perfect gift is the ingredients to build a terrarium. Give a container, small or large, the rocks and soil, and a group of small plants. Add furniture or ornaments such as a tiny bridge, a bench or animal figures. A garden under glass is the perfect little world over which the recipient of this gift has total influence.
Are your kids or friends still working from home? Give them the ingredients for an outdoor office. Perhaps a comfortable chair and a table that can hold a cell phone, beverage and laptop. Add an outdoor umbrella for shade so they can see their screen. But most importantly, give a gift certificate to the garden center so that they can buy plants that are interesting to focus on when they look away from the computer. They need colorful flowers, plants that will move in a breeze and blooms that will attract hummingbirds.
Sure, when someone is in a meeting, they can always use a virtual background. But think of how great it would be to give them a collection of blooming orchids or other tropical plants to place nearby during the next Zoom gathering. Give the gift of bragging rights during a company assembly so the recipient can say, “Yes, they’re real! I’m growing them.”
So many people turned to growing edibles in the past two years. Encourage them to continue expanding their horizons with the gift of unusual seeds, attractive plant supports for pole beans or cucumbers, or soaker hoses with timers that make watering easy.
Don’t forget to tell gift-givers that your garden center would be happy to assemble a gift basket of the best organic problem-solvers as well.
I’m sure you can think of people who became mixologists or sourdough experts during the pandemic. They would love some fresh herbs. So put together a basket or pot that contains seeds for basil, thyme and nasturtiums. Then, add some small pots of rosemary, thyme and sage, along with some recipes you’ve printed for the latest, fresh herb-based cocktails or loaves of bread. (Note: Basil cocktails are especially hot right now!)
Picture that person who has been feeling just a tad cranky lately. They need aromatherapy! Paperwhite narcissus bulbs in a bowl of pebbles, a budded winter jasmine or seeds to grow alyssum would be ideal for those who need soothing.
Is someone on your gift list coming home after their first semester of college? Give them some greenery to take back to the dorm. A snake plant (Sansevieria) or ZZ plant (Zamioculcas zamiifolia) along with a colorful plastic watering can and a package of fertilizer are perfect for greening up their living space. And it just might be the start of a life-long passion for indoor plants.
These are just a few ideas to get you started. The unique plants and products at your IGC will enhance the lives of all sorts of people, be they gardeners or not, so be sure to convey that this season.
C.L. Fornari is a speaker, writer and radio/podcast host who has worked at Hyannis Country Garden, an IGC on Cape Cod, for more than 20 years. She has her audiences convinced that C.L. stands for “Compost Lover.” Learn more at www.GardenLady.com
It’s been quite a marathon for garden centers over the past year and a half. Well actually, it’s been more like hurdle after hurdle. Following a year of temporary shutdowns and stay-at-home orders, COVID safety precautions and general uncertainty, retail garden centers are facing the new challenges of supply chain issues, increased demand, staffing shortages and new, inexperienced customers.
But with those challenges have come exciting opportunities to grow the market and inspire new customers to become lifelong gardeners. From new signage to better communication to all kinds of educational resources, garden centers really stepped up to the plate to help this new demographic find success with their plants — both indoors and out.
Since so much has changed over the past two years, you’ll find some new questions in this year’s State of the Industry Report. In fact, it had so many questions that we couldn’t fit them all in here, so be sure to check out our digital edition at gardencentermag.com/magazine for the full report. You won’t want to miss the stats on staffing and wages, so I’ll give a sneak peek here:
Last year, only 15% of independent garden centers were paying $15 an hour or more, while this year, more than a quarter are offering a starting wage that high. The impact of increasing minimum wages is also a bigger factor in why garden centers are having trouble hiring, rising a full 10 percentage points this year over last. However, the lack of available or qualified employees continues to be the biggest hindrance in hiring, which is one thing that hasn’t changed in the past few years.
However, even combining the increased cost of materials, shipping AND labor, garden centers are coming out on top. Projected profits are up over last year and despite the fact that spring sales skyrocketed last year, three-quarters of IGCs reported an increase in spring sales again this year. Those spring sales increases are smaller than last year, but considering the COVID sales boom, it speaks volumes to the industry’s success with new gardeners.
Thank you so much to all of you who took the time to participate in the 2021 survey. In such uncertain times, your input is more valuable than ever. We hope the insights from this report help you manage whatever hurdles 2022 throws at you.
C.L. Fornari
Kate Spirgen
