The Last Days of ’08, Looking Forward To ’09

2008 has brought about a lot of challenges and changes for us here at Parks Bros. and for all of us in the industry.  I would like to take a few minutes and look back at 2008 then take a look at what’s coming up in 2009

2008

• Weather, as always, is the determining factor in having a good spring season.  The weather for us in early March was cold and sales were not there.  Despite the cold weather, we managed to have a moderately successful spring.  While we did not have a great spring, we have had worse, but its been a while.  We also experienced a severe hail storm that damaged ALL of our greenhouse film resulting in an unexpected expenditure to replace the damaged film.  Money that could have been better used elsewhere.
• Cora Vinca was the surprise breakout plant of the spring.  We had a lot of traffic on my Cora Vinca blog posts (here and here) plus there has been a lot of press about how tough and disease resistant the plants are which seems to have caught the consumer’s attention.  
• Reports from the garden centers about how spring went were mixed.  Some had a great spring while other were flat and still others were down.  Over all the reports probably averaged a flat rating with the good and bad reports canceling each other out.
• As you may have heard there is some consolidation happening on the grower side of the industry.  One major chain cut its live plant suppliers from around 500 vendors servicing the whole country to about 100 vendors.  Since then some of the former suppliers have gone out of business, others are reorganizing, decreasing production and shifting their focus to servicing garden centers, and some have become contract growers for the remaining vendors.  We will talk more about this when we look ahead to 2009.
• Fall mum season was down for us and from what we hear for the garden centers as well.  Pansy sales on the other hand were outstanding for us.  Reports on pansy sales from the garden centers were mixed again with geography playing the main role in the results.
• Poinsettia sales were again decent for us.  We were left with some #6 red that we did not sell, but sold out of the #8 and #10 sizes early.  A few shops cut their orders at the end due to poor sales.  I have not heard much about how well the poinsettias sold in the stores yet.  I assume most of them are like me and are glad that the poinsettia season is over with and don’t want to think about them any more.

2009

• Weather will again be the determining factor for success.  All any of us can do it plan, plant and hope for the best.  I expect a cooler and wetter spring which also should translate into a longer spring.  I hope I’m wrong and spring is wonderful.
• New spring items – we have added about 70 new items this spring (including multiple sizes) and have adjusted production to match what we think we can sell.  After we did make the production adjustments we took a step back and looked at the bottom line and realized that we actually increased production.  Good or bad, we should have plenty of product available this spring.
• New items that I think will be a hit this spring – Zahara Yellow Zinnia, Tiger Eye Rudbeckia, Indian Summer Coleus and Henna Coleus.  And if we can get the seed Purple Flash Ornamental Pepper and Toucan Purslane.  I will be talking about all of these in the coming weeks.
• Cora Vinca will be big next spring so be sure to order plenty.
• Garden Centers – if a garden center had a hard time being profitable in 2008 then I predict that without significant changes to their business model they will be close to being out of business by the end of 2009.  The reason being that if they had trouble paying their bills or getting credit in 2008 then it will be next to impossible to buy on credit or get a loan in 2009.  Banks and supplier will not want to risk extending credit to shaky customers.  My advice is to stay in good with your suppliers and pay your bills.
• Consolidation – there will be quite a few growers out there with excess capacity to fill.  The one question everyone is asking is what are they doing with that capacity.  If the majority of them planted the excess capacity in hopes of selling then it means that there will again be more product than demand, forcing suppliers to compete on price for product of questionable quality.  If the majority cut production or closed up then it should mean decent availability at fair prices.  Either way there will probably be a grower somewhere that will cut his price to get some business.  All I ask is that you remember your primary supplier who has worked with you for years providing top quality before you buy from a cut rate grower with unproven quality.
• In the fall, I think we will see some cut backs in production especially with the lower margin items like mums and kale from growers and garden centers anticipating a slow fall season.  However, I believe pansies will still be strong.  Overall, pansies are the best value item for consumers that anyone grows.  Can you think of another item of comparable price that people buy and plant that they can enjoy blooming for 6-7 months?
• Poinsettias will be down next season.  Again I don’t see many growers or garden centers bringing in a lot of low margin plants that they may or may not sell.  This will be especially true of the #6 commodity size.  Demand for the larger sizes will be strong, but the production may not be there to meet the demand since production has to be finalized by early June.

I think 2009 can be a great year just like any year has the potential to be a great year.  To be successful in 2009 will take hard work, vigilance, agility and a lot of creativity.

What do you think?  Agree wholeheartedly?  Am I off my rocker (more so than usual)?  Let me know.  I’d love to hear back from you or any one at all for that matter.