UK supermarkets are barely scratching the surface of the bedding plants market, delegates to the HTA’s Seasonal Plants Focus conference at Stratford upon Avon were told this week.
Graham Dunn, who recently set up Cresco Horticulture to provide supply chain partnerships for grocery and DIY retailers, said that if Tesco had the same market share of seasonal plant sales as as they had in cut flowers, they would be controlling a category turnover of £170 million. Garden plant sales were under-achieving in all supermarkets, said Dunn (who is also an ordained Baptist minister). “It is a huge opportunity [for growers]. The supermarkets will undoubtedly grow the market. Your challenge is to have quality products to sell in a grocery-friendly manner.”
He said Waitrose had already identified the opportunity with their gardening ‘pod’ concept, which they were successfully rolling out at store entrances across the country.
He warned delegates that supermarkets were not emotionally committed to the garden industry. “That’s not their concern,” he said.
Supplying supermarkets was “overhead hungry”, and it was growers who carried the cost. Supermarkets were also looking to their suppliers for category management.
Delegates were left under no illusion about the realities of the modern mass market for plants. Dunn described it as “brutal” – and another speaker, Chris Beytes of Ball Publishing (above), said: “It is bloody out there.”
Beytes, editor of Illinois-based ‘GrowerTalks’ and ‘Green Profit’ magazines, said many US growers were now employing tactics learned from their dealings with ‘big box’ retailers, like sharing the profit and accepting the risk to encourage stockists to take a speculative late-season surplus.
Deals often involved Vendor-Managed Inventory (VMI), where the grower takes full reponsbility for the plants in-store. This usually improved the look of the end result, he said.
Some growers searching for profitbable growth were selling direct to consumers. He quoted Art Parkerson’s Lancaster Farm, which also trades with as a ‘nursery outlet’ and uses YouTube videos for promotion.
Grocery retailers were “data driven” and ‘big box’ retailers dictated everything to the grower, who has very little input. Pay By Scan (PBS), where the grower gets paid only after the customer buys the plant, was commonplace. Big boxes might also expect “margin relief”, with growers making up the shortfall when sales fail to reach expectations.
When asked by a delegate if he had a strategy for standing up to what was tantamount to bullying, Beytes said: “That’s the wrong way of looking at it. We have to decide who these customers are and take care of them. It’s the reality of the market.”
Graham Dunn added: “Brutal is the word, because retailers are in a brutal environment themselves. We have to get into their mindset on marginms, waste, mafrket shafre and so on.”