When COVID-19 hit in the spring of 2020, Dutch Growers Home & Garden didn’t scale back or hunker down. Instead, the Regina, Saskatchewan, garden center dove headfirst into the construction of a new location, moving from their original 2-acre store onto 15 acres just outside the city.
“It really was our field of dreams,” owner Karen Van Duyvendyk says of the new location on a former golf course site. “It was just a field and people couldn’t see our vision when we were first starting.”
Dutch Growers, which has an older, family-owned sister store in Saskatoon, got its start as a boutique garden center when Van Duyvendyk and her husband Tim decided to break away and strike out on their own. Over the 16 years Dutch Growers sat at its original location, the company built up as much as it could, but eventually maxed out the property. “It’s really turned into a big business and we’re pretty proud of that,” Van Duyvendyk says. “It was very mom and pop at the beginning.”
That’s not the case anymore for the IGC, which sits at No. 79 on the 2021 Top 100 Independent Garden Centers list. As the company expanded, Van Duyvendyk says a lot of problems stemmed from the property’s size and shape.
So to handle the growing demand for its products, the company bought 15 acres of land just outside Regina right before COVID, with the plan to sit on it for a few years and make plans. “It was getting very small and it was very tight,” Van Duyvendyk says. “It was getting to the point where it was really restricting our ability to grow our business.”
But when the pandemic hit, Van Duyvendyk decided it was time to move forward with construction of the new garden center, complete with an expanded growing facility. It was a chance to not only expand but improve the garden center experience for both customers and staff.
“It’s always been that napkin drawing — that idea of, ‘If I could build a garden center, this is how I would want it to look,’” Van Duyvendyk says. “I think everybody does that. They all have that little magic plan in their mind.”
The investment was a “jaw-dropping amount of money” at more than $10 million [$7,943,916], but it’s already paying off, according to the company. Dutch Growers expects the water reclamation system will save a significant amount on water and sewer bills, and the modern lighting with LED and solar fixtures is reducing power bills.
“It’s amazing how a few small changes really do make a big difference to the bottom line,” Van Duyvendyk says.
Since construction had been deemed essential when the pandemic hit, there were plenty of available contractors and Van Duyvendyk seized the opportunity, officially starting construction in the spring of 2020. The IGC got lucky with contractors as well, hiring the same companies it had used in the past for repairs and improvements at its original store. “To be able to work with them on such a big project, and during COVID, it just fell into place perfectly,” she says.
When it came time to make the move, Dutch Growers shut down its original location around Christmas, and from December through April, shifted materials to the new site.
“We were closed for that whole winter, which isn’t unusual. In the prairie, we tended to close in February anyway and when COVID hit, we kept our online store open and we still had enough sales to make it worthwhile,” Van Duyvendyk says.
Maintaining curbside pickup and delivery, Dutch Growers made great use of the online store they’ve had for seven or eight years. Before COVID, that accounted for 10% to 15% of annual income, but in 2020, that number rose to about 30%.
“We were really fortunate that we had made all of the mistakes that you can make with online sales before, so we knew what to avoid,” Van Duyvendyk says. “But the demand for plants was so high and it was so easy to just do it all online so timing-wise it was perfect.”
A new home
The garden center itself takes up about 7 acres of land, with a few more taken up by the water reclamation system. The rest is open for future garden center development and potential partnerships with other local businesses like hot tubs or boating companies to create an outdoor living destination.
The increased growing space has allowed Dutch Growers to focus more on plant material that’s been in high demand like annuals, vegetables and expensive or difficult-to-find tropicals.
“We do a very large amount of tropicals out of Florida and California, and shipping is crazy,” Van Duyvendyk says. “I pulled every favor I could out of every vendor I’ve ever met this year to be able to get product. So instead of ordering a semi of tropicals every three weeks, we’re now starting to grow a lot of our own and do our own cuttings because we’ve never had the ability to do that before so that’s really exciting. I’m really enjoying that part of it.”
Another bright spot of the new location is the parking lot, which was never large enough at the old location. So the first thing Van Duyvendyk insisted on was an acre of parking. And while she was met with some resistance, she insisted on 250 parking spots and it paid off. During a big sale in August, the entire parking lot was full of customers, and some even parked on the road.
At the new location, sales are up almost 50%, some of which Van Duyvendyk attributes to COVID shopping. And with plenty of space for social distancing, the new garden center was a popular destination. And sales for 2021 look promising.
“Our approach has always been that when we have customers come in, they’re not just coming into our shop; we’re inviting them into our home and we treat them like they’re a guest in our home,” Van Duyvendyk says. “And now we have a nice, big, new home and we’re even more excited to have more company over.”
It’s always been that napkin drawing. That idea of, ‘If I could build a garden center, this is how I would want it to look.’ I think everybody does that. They all have that little magic plan in their mind.” — Karen Van Duyvenkyk, owner
When COVID-era gardeners flocked to IGCs in the spring of 2020, many stores saw revenues rise to levels not seen in years. And even as restrictions lift and customers return to more normal routines, sales are still looking strong. But with the cost of materials, labor and shipping shooting up, there are certain pain points to consider as IGCs work to stock their stores and serve an increase in customers. So as garden centers plan for the coming years, they’re prioritizing employees, facilities and finding ways to stay stocked, despite the challenges of 2021.
While last year was an anomaly that boosted revenues to unexpected heights, sales this year have been through the roof up until August at Sloat Garden Center’s 13 locations in the San Francisco Bay area. This year, the intense California drought brought nothing but sunshine January through March, so the IGC went into an incredibly busy spring well ahead of 2020.
Last year, Sloat’s stores only had to close for one day since California designated garden centers as essential businesses early on in the pandemic. “There was very little difference between a Saturday and a Wednesday,” Stoner says. “Every day was Saturday from about April 1 through September. There was very little fluctuation.”
Now, in 2021, the numbers are starting to return to a more normal cycle with peak sales on the weekends as customers returned to work. The seasonal cycles are returning as well this year as summer sales slowed compared to the spring peak.
Cross Creek Nursery in eastern Virginia is also seeing a leveling off from the peak of 2020, but business is still going strong, says Jason McAuliffe, president. While numbers this year aren’t reaching the extreme heights of 2020, he’s still seeing an increase from previous years.
And while 2021 overall sales aren’t as high as 2020’s for Sloat either, Stoner says that revenue is still up about 15% over 2019. “But if I’m going to fall behind any year, falling behind 2020 is okay,” Stoner says with a laugh.
Sloat Garden Center likes to stay cash-rich, but the increased profits have allowed the company to pull the trigger on some planned projects like a major remodel of an acquired store and a remodel of an older, established store. There are more facility improvements planned for the next couple of years as well.
Cross Creek is also investing in infrastructure with a new, expanded parking lot, along with expansions to its point-of-sale system. And because the cost of bringing in plant material is going up, they’re increasing their growing footprint to alleviate supply chain issues.
“We’re increasing our production line to include a lot of things we typically relied on bringing in, just so that we’re not relying on material out there, and also control our costs and keep our costs down on the retail,” McAuliffe says. “So while other places might have to increase their costs on that stuff, we can maintain that cost margin. I think that would make us stand out amongst the others.”
Sloat is also investing in its growing operations with a potting machine that will help cut down on labor. In the past, the company could hand-plant about 2,000 plants, fertilize them and get them out in the field in a day. Now, they can do 16,000. “Technology is definitely something we’re investing in because you’ve got to automate. Labor is too expensive and it’s too scarce,” Stoner says.
Both IGCs have also put some of their profits toward their employees with bonuses to staff who stuck through the hard times.
Investing in staff
Staffing continues to be the biggest challenge for garden centers all over North America. When COVID hit, many of Cross Creek’s employees were uncomfortable coming to work, so the IGC started thinking outside the box to look for staff.
Through some networking, the garden center found some homeschooled students who were able to move their schedules around to work during the day. They also found success with part-time workers and flexible schedules.
“They didn’t have to work 40 hours a week. It was really just, ‘What can you give me? I’ll take anything,’” McAuliffe says. Even his wife and sister-in-law were pitching in by answering phones and his brothers helped out on the landscape side.
Sloat ran into a similar problem with staffing, with 30-40% of staff choosing to stay home (none lost their jobs). About half came back within six to eight weeks but some never returned.
The IGC tapped into college students who were available much earlier than the usual June or July thanks to virtual classes.
Cross Creek also went above and beyond to make the workplace fun and energetic to compete with other garden centers in the area. “When somebody comes over from another garden center, they realize how well it’s run, how well people respected, how the culture is here,” McAuliffe says. “It’s fun, it’s hip, it’s happy. The word gets out and then we have other good prospects come in.”
To help staff feel safer, Cross Creek also closed their greenhouses to customers, which was a significant decrease in shopping space. Even with all of those efforts, the company wasn’t able to get the staffing it needed in the garden center, or in the landscape division, but they made it through.
Labor costs, as a percentage of sales, were much lower in 2020 than in previous years at Sloat, but Stoner says the company has done more hiring in the last 18 months than he can ever remember.
Cross Creek is also hiring more, increasing its starting pay across the board, gave out bonuses at the end of the season as a thank-you for helping them keep the ship afloat. And the staff that remained with the company also received a pay increase.
The customer demographic for many is skewing younger than before and at Cross Creek, those shoppers are looking for tropicals. The IGC was bringing in a truckload of tropicals each month, once every two weeks at max, now they’re getting a truck every week. And they’re still selling out.
Sloat is seeing the same shift to a younger base. “The fact that we have so many new gardeners that are depending on garden centers for a newfound passion bodes really well for the industry over the next 10 years,” Stoner says. “They have a vested interest in the garden that they didn’t have two years ago.”
And thanks to children staying home from school, many of them were involved in their parents’ newfound hobby, which Stoner hopes will spark a lifelong passion for growing. “It’s the youth who have been exposed to this who might not have loved it before because before, it was a chore. But it was something to do other than FaceTime or Zoom.”
Four or five years ago, Sloat started a kids’ club to help capture young gardeners’ interest. In 2021, they’ve sent more membership cards to the store than ever before. It’s a clear sign that the kids are still interested.
Shipping and shortages
Logistics and price increases have made shipping a huge pain point when it comes to both plants and hard goods, particularly imports. According to a global pricing index by London-based Drewry Shipping Consultants Ltd., the average worldwide price to ship a 40-foot container has more than quadrupled in the last year.
And garden centers are seeing the effects firsthand. Cross Creek paid as little as $3,000 for a shipment from Vietnam in past years. Now, it’s anywhere from $11,000 to $18,000, so McAuliffe is holding containers in Vietnam in hopes that prices will go back down.
“I’m constantly in contact with our shipping people over there to see when the price will get better and unfortunately, it just keeps going up,” he says.
Aggressive ordering helped Sloat when it came to imports in 2020 and the garden center is embracing the strategy. The IGC directly imports its signature line of pottery and was lucky enough to have its stores and warehouses packed to the brim in February, right before the pandemic hit, with more booked for delivery.
“By summertime, we were the only company in our area that had pottery to sell,” Stoner says. They’re maintaining that aggressive approach to ensure stock in the future as well, increasing from 30 containers a year to 60.
It’s not just international shipping that’s causing issues. National shipping is also affecting plant costs for Cross Creek, where costs are sometimes twice what they were in previous years. Shipments of tropicals have jumped from $20,000-$25,000 to $30,000-$40,000 and West Coast freights from Oregon are up to $5,000 more.
Thanks to heavy demand and shipping issues, plant shortages continue to plague the industry as they did in 2020 and vegetables, in particular, have been a difficulty for Sloat Garden Center. “We have phenomenal buyers and we set the tone for them early in the pandemic to be super aggressive with whatever they could book for 2021 however early they could do it,” he says, noting that the company went into this year booking more material than ever before.
Because Sloat’s locations are near so many growers, the IGC doesn’t typically need to book material. They don’t have to ship far or even book full trucks. “We’ve been really fortunate there,” Stoner says. “I know that hasn’t been the case for other nurseries around the country.”
Prices and profits
Despite the increases in the cost of doing business, Cross Creek has seen a 24-28% increase in profits in 2020 vs. 2019 and Sloat has seen a “dramatic increase,” according to Stoner.
“I don’t think it was just volume that led to it because we were running a skeleton crew,” he says. “Labor costs were nothing I would ever plan for. Labor costs were lower than you would ever want them to be.”
Also keeping an eye on profitability, Cross Creek sends out a weekly report to each department manager to ensure that items aren’t being undervalued.“We need to make sure we’re increasing our prices. We can’t sell things we aren’t making money on,” McAuliffe says. “If we weren’t doing that, there are certain key, high-volume items that we probably would not have made much money on this past year and wouldn’t have had the profit margins we ended up having. So generating that report, monitoring our profitability on items closely like we do is super important. I think that’s definitely something that contributed to us being successful and profitable last year.”
It’s definitely something to keep an eye on as plant prices, pot prices, soil prices and more are going up, according to McAuliffe. Since Cross Creek is a grower-retailer, it has been able to control prices somewhat, but the input costs continue to increase and McAuliffe doesn’t see them going back down.
“That’s just going to be an increased cost of doing business,” he says, noting that IGCs will likely need to increase prices as well. “In our industry, pricing is already low, so I think it’s time to start raising some of these prices and hopefully our customers will go with it. If we continue to put out a good product and great customer service, I think we’re okay. We don’t take price increases lightly but when we have to do it, we have to do it.”
When I started working at my garden center in 1994, the manager of the perennial department, Dave Lane, brought in liners every March. We potted these up and grew them later in the summer, using one heated and two solar-warmed hoop-houses. By early June, those plants were of saleable size. Dave had run the numbers and decided that even figuring in the cost of materials and labor, the profit margins on those perennials made it worthwhile to grow some of our own.
After four or five years, we discontinued this practice — primarily because we needed the retail space used by the hoop-houses, and we often didn’t have enough employees to care for those growing perennials in May. Additionally, our sales were going up, and we needed a sizeable, continual influx of perennials from early May through the summer. Vendors commonly supplied the plants we grew from liners, so it didn’t make sense to grow those plants ourselves.
Although Dave’s calculations about our profit margins were correct, the reality was that we ended up making more money by bringing in the finished plants frequently. Yet I miss those years when we grew some of our own because, in addition to common perennials, I was also able to raise plants that weren’t available from our vendors. I grew odd, plant-geek selections from seed and propagated unusual varieties that weren’t available elsewhere.
Upon finding the Rubus cockburnianus ‘Aureus’ that I’d propagated from my own plants, one plant fanatic’s eyes lit up. “I don’t often find a plant in garden centers that I’m not familiar with,” she said, happily putting a pot on her cart. “I guess you’ll be seeing me again.”
It’s not just the rare or quirky that I miss on our shelves, however. There are many great plants that I want to recommend to my customers, but we can’t find a grower who offers them. They might have been commonly grown 10 years ago, but for a variety of reasons, they’re no longer available. It’s sad when this happens, and preventing good plants from disappearing is a key reason that IGCs might want to grow at least part of their own stock.
Unusual, a broader range and hard to find
Don Shor, owner of Redwood Barn Nursery in Davis, California, says that he grows several fun and interesting varieties from seed. “Evening scented stock!” he exclaims. “Also, this year I grew Zaluzianskya capensis Midnight Candy. And I’m now growing a significant percentage of my own roses because I wanted to have a broader range of varieties.”
In Joe Kiefer’s opinion, growing unusual or hard-to-find plants helps retain a unique and regionally focused business. His garden center, Triple Oaks Nursery & Herb Garden in Franklinville, New Jersey, raises unusual plants not readily available in the trade, along with local indigenous natives. “Another plant we grow is elecampane (Inula helenium),” he says, “because it’s a powerful immune system booster and I have never seen it offered. We bought it at some point 20 years ago, because it’s in our herb garden, but now I grow it from seed.”
“We are right near Cumberland County, New Jersey,” Joe continues, “which is a huge nursery production county, so we can’t compete with normal plants. They can do it better and cheaper, but the oddball stuff they don’t do, we can do here and stand out. Then we promote them on our website, email and social media.”
Susan Penland Reavis agrees. She’s been growing and retailing since 1979 in North Carolina, and they propagate many varieties of ornamentals and vegetables. “Over the years we have honed in on growing what’s unavailable, hard to ship and/or more expensive to buy in finished,” Susan says.
“We keep a number of Jewel Orchids in production and have rare cool things going like various ant plants, Oxalis gigantea and Oxalis palmifrons,” says Hap Hollibaugh of Cactus Jungle Nursery and Gardens in the San Francisco Bay area. But like Susan, he also raises plants when the availability is erratic. “With the houseplant craze I have increased the rarer, hard-to-get, and trending crops,” he says, “just because we haven’t had reliable delivery on our orders.”
Setting yourself apart
Growing varieties that are generally unavailable elsewhere helps keep good plants from disappearing completely. And it doesn’t just position you as an alternative to the box stores … it can be the reason that people come to your store in the first place. Heather Pariso of The Garden Gurl Shop in Dover, Ohio, grows several varieties of heirloom tomatoes.
“Every year I have to increase the numbers I grow, and it tickles me to grow rare plants in order to expand people’s horizons and keep the plant passion alive,” she says. “I really think setting yourself apart from the competing interests of the customers.”
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
The numbers are in and they’re impressive. I’m sure it comes as no surprise that 2020 retail revenues skyrocketed past 2019, but looking at the 100 top-grossing independent garden centers all together paints an optimistic picture for the industry.
This year’s list brought in $342 million more than they did in 2019, and $485 million more than 2018 and 2017. While we expected to see a big bump in 2020 revenue over past years, these numbers are amazing. While not every garden center on the list saw a huge increase in revenue, fewer than 10 saw a decrease. And many saw an increase of $1 million or more.
I’d like to thank everyone who took the time to share their 2020 retail revenue with us for this year’s list. While revenue is certainly not the only important benchmark in the industry, we’re incredibly grateful to everyone who took the time to send their information.
Inside this issue, you’ll find stories of IGCs that found ways to invest, innovate and overcome in the midst of a crazy year. From unique ways to appreciate staff on page 42, an IGC that built a brand-new store in the middle of the pandemic on page 36 and financial insights on page 22, we’re amazed at what the industry accomplished in 2020.
That’s not to say 2020 was an easy year for garden centers. It was far from it. Through shutdowns, capacity limitations, mask mandates, staff shortages and all kinds of other stress, independent garden centers managed to dig deep and come out on top last year. And it seems like revenues are looking good for 2021 as well thanks to efforts to retain all of those new customers who helped boost 2020 retail numbers higher than they’ve been in years.
Of course, the Top 100 Independent Garden Centers List is just a snippet of how a certain segment of the industry is doing. In our November issue, we’ll be digging more into the market with our annual State of the Industry report. I hope you’ll share your thoughts and insights with us to help make the report as accurate as possible.
Congratulations to all of the businesses that made this year’s list! I hope you and your team celebrate this well-deserved recognition.