North American sales models impress Dutch entrepreneurs

How do large ornamental growers in North America market their products? This was one of the main questions of seven Dutch horticultural entrepreneurs who traveled through the continent last month. Looking for innovative ideas in the field of marketing, a handful of growers, exporters and retailers introduced them to some pretty exciting concepts.



Johan Grootscholten, senior recruiter at Green Career Consult and co-initiator of the trip, was particularly impressed with the 'big-thinking' strategies. "We visited, among others, some large vegetable greenhouses in Leamington of Mucci Farms and Mastronardi, several retailer chains, the Dutch Consulate in New York and Costa Farms and Pure Beauty Farms in Miami. The partnerships through which the companies find each other, had our special attention. The results that some of them manage to achieve through these partnerships were impressive."

Pay by Scan
"Take, for example, Pure Beauty Farms, a large pot and bedding plants nursery in Miami. This company, their story and how they are currently selling their plants - it's fantastic", says Grootscholten. "And they have been through a tough period. The owners, second-generation Cubans, built a successful company in 1994 until a hurricane destroyed everything. They had to build up the company from scratch."

And they did. They built it back up to a 150 ha, large flourishing company. "What really impressed me," said Grootscholten, "is how they have organized their sales and in particular the cooperation with Home Depot (a large garden center / DIY-like retailer). With approximately 500 stores (with, according to Wikipedia, an average size of two soccer fields), Pure Beauty Farms supplies 300 stores and - most remarkable- solely based on the 'Pay by Scan' principle. That is, the grower is paid only when the customer settles at the pay desk. Up until that time, the plant is formerly property of the grower, with Home Depot running no risk whatsoever.



This principle is not new to Dutch entrepreneurs, but it gets 'wilder'. Growers always have to deal with a loss, about 40% in low season, an average of 15% during better times. But Home Depot requires that shelves are always filled with flowers, even in low season. For the reason that it looks more attractive. Home Depot only provides the checkout, and of course the shelves itself. Even the maintenance of the plants and making sure they are actually sold is the responsibility of the grower. They must provide someone who waters the plants and persuades the customers to buy.

It might be hard to imagine that this is an interesting business model for Pure Beauty Farms. "And yet it is. Even better, they achieved exceptionally good returns. And the trick is, the high volumes and the fact that Home Depot loves this format. In any other business model they have to buy the product from the grower. For example, a plant costs them two dollars. When they do not sell the plant, the two dollars are sheer loss. With Pay by Scan they cash an X percentage for every plant sold. If not sold, the loss is for the grower.

Social media
"Overall a very interesting trip", concludes Johan. "How social media is utilized, the recruiting of young consumers by "seducing" them via Pinterest, Facebook, Twitter and Instagram, it was all very informative."

To be clear: for Johan, organizing such trips is imperative to business. "I joined the group, because I want to learn from the entrepreneurs and the North American horticultural market. For me as a consultant, it is also interesting to come along with a group of growers. If I would be on my own, probably doors won't open that easily.”

Below more pictures to get an impression of the trip:




















For more information please contact Johan Grootscholten, Green Career Consult  (website). M: +316 389 760 49 or by email.


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