Monrovia Nurseries Financial Woes

What to make of the news of Monrovia potentially selling to the box stores? Monrovia finds itself in financial problems, like so many businesses these days. I am sure they look back and see places where decisions could have been made that might have prevented this. Who of us hasn't found ourselves doing the same thing? The current sour economic conditions have thrown the whole horticultural industry into a tailspin. It's no ones fault. It just is what it is. Monrovia has for years sold only to independents. Independents have done their best to support Monrovia. The current financial situation caused many independents to cut back, or cancel their spring bookings. Now Monrovia finds itself having to ask it's customers to increase their spring bookings by 22 million dollars. If that figure cannot be reached they may have to start selling to the box stores to make up the difference. We feel bad Monrovia has come to this point. We do understand it may be the only way out for them, but nothing will be the same after that. Think about it. Independents who have supported Monrovia for all these years have to buy a whole lot more, putting their bottom lines at risk, or Monrovia is going to sell to the box stores?

Talking to some industry friends, some say they don't mind if Monrovia has to sell plants to the boxes, as long as it's not the exclusive varieties, or in branded containers. Monrovia would sell plants to box stores in plain black containers, and continue to sell independents the branded green containers with Monrovia printed on the side. Really? Looking back now I wish Monrovia had stuck with black containers. When times we're better, the branded containers represented a higher end product. Now it signals a more expensive product. Customers, who have access to information like never before, are not going to see this? "Gee, I heard you can buy Monrovia quality plants cheaper at the box stores in black containers." Same plants, different packaging and pricing. A box store dream. Bottom line, once your in bed with the chains, it's hard to get out.

I have a had a good relationship with Monrovia for over 30 years, ever since their logo was a man wearing a fedora hat smoking a pipe. Remember that? It is a quality company with lot's of great people. If we had lot's of cash on hand, and a belief that next year people would be coming in to buy landscape plants, we might place a spring order. Unfortunately we don't have a lot of cash on hand, and frankly I don't see next spring being much better than this spring. Did you see the jobs report today? Monrovia's plea to buy more from them does not fall on deaf ears. Reality sometimes bites, as Monrovia and many of us in the business can relate.

We have been talking at this blog for years about the fragmentation of the nursery industry. Those that sell to box stores, and those that sell to independents. Monrovia is one of the last major wholesale players that has been exclusive to independents. Independents will have to buy from more local or regional wholesale nurseries, which has been the trend  the last few years. Monrovia's quality plants in box stores will make it even harder for small nurseries to stand out. We have to find a new direction if we are going to survive and thrive.

The box stores will continue to dominate, and are getting better and better at doing it. Independents, better find your niche and claim it for yourself.

Update: There are comments at my last post that relate to this issue. Read them here.

Update: Steve Cissel of 10-20 Media sent along a link to an article at The Ellison Chair in International Floriculture. It's interesting to note that production and supply of nursery plants is much declined from last year. In addition quality has dropped off significantly as nurseries try to hold onto un-sold plants for future sales. Inflation is starting to rear it's head. "I have no doubt that in 2011 there will be plant shortages.  Some plants may not be found at all and some we may have temporary outages.  Prices are going to go up", say's the author. Higher wholesale prices, diminished quality, and reduced inventory. What are we going to do? Absorb the costs, or pass them along to a public that is being trained to expect lower prices?