Ellison Chair in International Floriculture
Ellison Chair in International FloricultureTeaching, Research, Extension and Service

Study Finds Flower Longevity Guarantee Plays Role in Purchasing Decisions

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The American Floral Endowment (AFE) just released a comprehensive Public Benefits study on Longevity Guarantees for Flowers. This multi-part study examines several aspects of consumer preferences for longevity guarantees on flowers including: consumer willingness to pay for longevity guarantees, consumer preferences for longevity labels on cut flowers and consumer preferences for redeeming longevity guarantees. The study was conducted by Chengyan Yue, Ph.D., at the University of Minnesota, with support from Alicia Rihn, University of Minnesota, Bridget Behe, Ph.D., Michigan State University, and Charles Hall, Ph.D., Texas A&M University.Guarantees are used in many different industries to entice consumers to purchase products, but they are rarely used in the floriculture industry. This study seeks to examine the consumer impact of longevity guarantees on flowers.

One of the key findings in the study was that 76% of participants indicated that a longevity guarantee on flowers would impact their purchasing decisions. Specifically, participants were willing to pay 3% more for a guaranteed flower arrangement than a flower arrangement with equal longevity but no guarantee.

The study findings can serve as important marketing lessons for floriculture industry stakeholders. “People are very positive about longevity guarantees,” says Dr. Yue, “I think we can develop a longevity guarantee labeling system so that people would be reassured of their purchases and go outside of their typical safety zones. Longevity guarantees are especially important for gifts, expensive flowers, and flowers they are not familiar with.”

Former AFE Chairman Harrison, “Red” Kennicott, CEO of Kennicott Brothers Co., Inc., adds, “In addition to the useful information in these reports, industry members should always share with consumers how simple care and handling actions such as the use of preservatives, adding and changing water, and keeping flowers away from heat and drafts can prolong the life of flowers.”

Full reports from this study can be downloaded from the Public Benefits Reports section of the AFE website, www.endowment.org AFE seeks to make public benefits research such as this study, widely available in order to benefit the entire floriculture industry.

For more information go to http://www.endowment.org/research-reports/public-benefit-research.html

Guest Post: Viewpoint on availability and quality

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I received this from an industry contact who preferred to remain anonymous, but agreed to let me share this on Making Cents. They make some excellent points regarding the availability turnaround that has occurred in the industry (from oversupply to shortages) and regarding plant quality.

Over the last two plus years I have purchased from 65 nurseries and toured about 130 nurseries.  I talk with plant brokers, propagators, and other nurserymen about plant availability, quality, and pricing in the market.  I also attend several trade shows during the year.  Geographically I am in contact with California, Oregon, Florida, Georgia, Alabama, Mississippi, Louisiana, Texas, Oklahoma, Tennessee, South Carolina, North Carolina, Virginia, and Maryland.

In general, plant availability is greatly reduced going into 2011 from 2010 levels.  I have already seen this shortage on some items start this fall of 2010.  Locating material to book for 2011 is more challenging.  Plant quality may be in even greater decline.  With the decline in plant numbers and quality, pricing is starting to go up.  The rise in pricing will contribute to the shortage of plants available in the short term.

Plant availability across the industry has reduced for several reasons.  Nurseries, from large to small facilities, are going out of business altogether.  The ones that remain have planted smaller crops or no crop at all during 2010.  I have not toured a nursery that has a larger or equal quantity of inventory at this point compared to last year.  At best an individual nursery is down 30% in inventory numbers.  Some are down 80%.  This range holds true across those growers that are still operating.  Many plants have remained on the growing location too long and have passed salable quality.  Dumping significant numbers of old material has been common in 2010.  In some cases the nursery did not have the labor remaining to dump the plants and have simply turned off the water.  Those plants are dead in the growing space.  In several nurseries small areas of ground cloth have been removed and vegetable gardens now occupy that irrigated space.  Nurseries that specialize in propagating and selling liners are reporting lower than expected orders for material to be delivered in the 2011 planting season.  This will contribute to a possible continuation of the shortage well into 2012.

Plant quality is of a bigger concern.  Plants have been held too long in hopes of making a sale at some point in the future.  Those plants are no longer viable for the retail trade and in many cases simply need to be dumped.  Some growers have planted, yet not fertilized for various reasons ranging from lack of labor to put the fertilizer out to not having the money available to buy the fertilizer.  Those plants will not be ready for sale in spring of 2011.  Older and unfertilized plant material will result in fewer plants that can be purchased for 2011 retail sales.  In one case the plants have been fertilized with chicken manure.  This may result in additional weed pressure and an unpleasant odor.  Speaking of weeds, they are abundant in many nurseries.  Some plants cannot be purchased due to the overwhelming weed pressure at the grower.  Again, lack of labor and money to hand weed and or put out herbicide.

Some growers whom are sensing the shortage are already quoting higher pricing.  This phenomenon is beginning to spread.  In recent weeks I have visited several nurseries that now have no hired labor and only the principles remain.

“I am not going to plant anything until I see the market turn.”
“We are not going to spend the money to fertilize until someone orders the plants.”
“I need several days notice to load a truck so that I can find some help, we do not have any labor left.”
“I am sorry for the weeds, we just do not have the labor or money to take care of them”
“We are too late planting anything this year and as a result will be basically out of salable plants during 2011”
“I went out to tour some of my plant sources and the first three I tried to tour were all closed and out of business.”

These quotes and more are quite common this day and age.  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.

OFA workshop to address shrinkage

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The OFA Short Course, Columbus Ohio
Saturday, July 10th8 AM – 12 PM

Crop Management Workshop: Keeping You & Your Customers Happy (4 hours)

Charles Hall, Texas A&M University
Michelle Jones, The Ohio State University, OARDC
Claudio Pasian, The Ohio State University
George Staby, Perishables Research Organization, Chain of Life Network
Terri Starman, Texas A & M University

Don’t keep throwing your money away.  Plant losses (or shrinkage) during production, shipping and retailing negatively impact your bottom line.  In this session, you will learn how to manage plant quality throughout the production and marketing chain so that you can realize maximum salability and profit from your crops.  This session will look at how fertility, temperature, light, container design, growing media, wetting agents, hydrogels, packaging, transportation, and ethylene can affect the shelf life of bedding and potted plants.   You will learn how the application of anti-ethylene compounds and abscisic acid based plant growth regulators can be used to enhance plant stress tolerance and increase plant survivability during shipping.  If you produce or sell plants, you will not want to miss this valuable workshop.

The pre-registration price for OFA and ANLA members is $95; the non-member price is $120.

Details can be found on page 64 of the educational programs brochure at http://www.ofa.org/sessions.aspx

Registrations begins May 11, 2010
To register online go towww.ofa.org/reg

Bus trip to "Pack Trials" planned

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The January 29 deadline to register for a Greenhouse Grower’s trip to this year’s California Spring Trials (this used to be called the Pack Trials) is fast approaching.

An intense, educational and entertaining trip is planned to several of the key Spring Trial locations from April 10 -12, 2010. The trip is designed specifically for greenhouse growers and other floriculture professionals.

The trip itinerary is jam-packed; the days begin early and continue at a fast pace late into the evening. Attendees should plan to arrive on Friday, April 9 and will stay at a designated hotel near the San Jose Airport. The journey begins at 7 a.m. on Saturday, April 10, when the bus departs from the hotel. That first day, the group will visit Pacific Plug & Liner and Agrexco in Watsonville, followed by Syngenta Flowers and Goldsmith Seeds in Gilroy, Speedling in San Juan Batista (along with exhibitors HEM Genetics, GreeNex USA, Schoneveld Twello, Thomson and Morgan, MasterTag, and Plant Source International and finally ending the day at American Takii in Salinas, with an optional stop at Matsui Nursery. Participants will stay in Salinas on Saturday night.

On Sunday, April 11, the day will begin with a bus drive to San Luis Obispo, where the first stop will be Dummen USA. After a short drive to Arroyo Grande, the group will visit Greenheart Farms to celebrate their 30th anniversary. The last stop of the day will be in Santa Barbara where the participants will visit Jiffy Products along with their exhibitors Northern Innovators Inc., Skagit Gardens, Florist de Kwakel, and GGG-international.

Monday, April 12, will be a busy day beginning with the bus departing at 7 a.m. and driving to Carpinteria to visit PlantHaven, HIP Labels, and Westflowers. Following this stop, the group will arrive at Santa Paula to visit Ball Horticultural Co. along with Ball FloraPlant, Selecta First Class, PanAmerican Seed Co., and Kieft Seeds. Lunch will be hosted by Ball. In the afternoon, Green Fuse Botanicals will be visited along with GroLink in Oxnard. The last stop of the day will be in Somis, CA to visit Suntory. Participants will spend Monday night at a hotel in West Hollywood, CA. This hotel is conveniently located midway between the Los Angeles (LAX) airport and the Burbank Airport. There is a shuttle service and taxi service to both of these airports from the hotel.

This package trip includes the cost of first class hotel accommodations for four nights from April 9-12, bus transportation from the first day to on the last day, lunches for 3 days, and experienced guides. Participants need to arrange their own transportation into San Jose on April 9 and out of West Hollywood on April 12, and cover their own dinner costs. A travel agency is available to assist with plane reservations (go to the website listed below). The cost of the trip will be $450 per person in a double room or $720 per person for a single room. These rates are based on 47 participants and will be adjusted slightly if minimum capacity is not met. The trip is subject to change.

**Space is limited** Register by January 29, 2010 to reserve a seat on this trip. For on-line reservation, go to www.concepts.us.com and click on Event Registration at the bottom left of the site. Be sure to go to the site labeled: Greenhouse Growers Spring Trials 2010. If you have questions, contact Dr. Mark Bridgen at mpb27@cornell.edu or at 631-727-3595.

This group trip to the 2010 California Spring Pack Trials is a new, one-of-a-kind venture for growers! All greenhouse growers and floriculture professionals are invited to attend. It is an opportunity to meet fellow growers, breeders, and other plant company representatives to share ideas, update your understanding of what’s happening in our industry, and travel with trained professionals.

Spring Pack Trials Excursion for Greenhouse Growers

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A bus trip for greenhouse growers is being planned to next year’s California Spring Pack Trials from April 9 -13, 2010. Dr. Mark Bridgen of Cornell University, along with Dr. Brian Krug of the University of New Hampshire, Dr. Roberto Lopez of Purdue University, and Dr. Neil Mattson of Cornell University, have organized an intense, educational trip to several of the key Spring Trial locations. The trip is designed specifically for greenhouse growers and other horticulture professionals.

The trip itinerary is jam-packed; the days begin early and continue at a fast pace late into the evening. Attendees should plan to arrive on Friday, April 9 and will stay at a designated hotel near the San Jose Airport. The journey begins at 7 a.m. on Saturday, April 10, when the bus departs from the hotel. That first day, the group will visit Golden State Bulb Growers in Watsonville, Syngenta Flowers/Goldsmith Seeds in Gilroy, Speedling (along with exhibitors Thompson & Morgan, GreenNex USA, Hem Genetics, MasterTag, Plant Source International, and Schoneveld Twello) in San Juan Batista, and Sakata Seed in Salinas. Participants will stay in Salinas on Saturday night.

On Sunday, April 11, the day will begin with a 2 hour bus drive to San Luis Obispo, where the first stop will be Dummen USA. After a short drive to Arroyo Grande, the group will visit Greenheart Farms. The last stop of the day will be in Santa Barbara where the participants will visit Jiffy along with their exhibitors Northern Innovators, Skagit Gardens, and Florist de Kwakel.

Monday, April 12, will be a busy day beginning with the bus departing at 7 a.m. and driving for an hour to PlantHaven. Following this stop, the group will arrive at Ball Horticultural Co. in Santa Paula where displays of PanAmerican, Ball FloraPlant, Kieft Seeds, and Selecta varieties will be featured. Lunch will be hosted by Ball. In the afternoon, Green Fuse Botanicals in Oxnard will be visited along with GroLink. If time allows, the last stop of the day will be in Somis, CA to visit Suntory.

Participants will spend Monday night at a hotel in West Hollywood, CA. This hotel is conveniently located midway between the Los Angeles (LAX) airport and the Burbank Airport. There is a shuttle service and taxi service to both of these airports from the hotel.

This package trip includes the cost of first class hotel accommodations for four nights from April 9-12, bus transportation from San Jose on the first day to West Hollywood on the last day, lunches for 3 days, and experienced guides. Participants need to arrange their own transportation into San Jose on April 9 and out of West Hollywood on April 12, and cover their own dinner costs. A travel agency is available to assist with these reservations (go to the website listed below). The cost of the trip will be $450 per person in a double room or $720 per person for a single room. These rates are based on 47 participants and will be adjusted slightly if minimum capacity is not met. The trip is subject to change and may be canceled if minimum capacity is not met.

**Space is limited** Register by January 29, 2010 to reserve a seat on this trip. For on-line reservation, go to www.concepts.us.com and click on Event Registration at the bottom left of the site. Be sure to go to the site labeled: Greenhouse Growers Spring Trials 2010. If you have questions, contact Dr. Mark Bridgen at mpb27@cornell.edu or at 631-727-3595.

This group trip to the 2010 California Spring Pack Trials is a new, one-of-a-kind venture for growers! All greenhouse growers and floriculture professionals are invited to attend. It is an opportunity to meet fellow growers, breeders, and other plant company representatives to share ideas, update your understanding of what’s happening in our industry, and travel with trained professionals.

In like a lion, out like a lamb

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My friend, Dean Chaloupka, offers the following commentary on the spring season:

Talking with growers around the country, most did very well through the peak of the Spring 2009 season and have seen sales drop off during June. Depending on what part of the country you are in, this could be viewed as significant (North) or not (South).

I won’t go into the economic factors which contibuted to the industry fairing well through most of the Spring but will touch on a couple which growers and retailers should think about as softer June sales have reminded us.

1. While consumers stayed home in Spring and focused on decorating their homes and yards, the economy is still on peoples minds and many consumers are on budgets. Consumers will not spend as freely as in better economic times.

2. People will make their purchases last longer. Plants will be maintained and not pulled out and replanted as often.

3. Disposable income still plays a role in how much people will purchase for plant material. Gasoline has started to move upward again and can impact sales going forward if the trend continues.

4. Consumers need a reason continue to purchase plant material. Later in the season, new and fresh planters, baskets, etc will generate new sales but it should not be expected that left over flats, 4″, 6″ pots and items which are the same thing consumers saw earlier will meet a need. At this time, consumers will no longer “grow” the plant.

It is my expectation that consumers will view plants and horticultural products for the rest of 2009 just as they have done in June. They will need to be enticed to decorate and the same old products, plants, packaging, and messages will not do it.

Fertilizer Price Volatility

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U.S. prices of fertilizer nutrients began to rise steadily in 2002 and increased sharply to historic highs in 2008 due to the combined effects of a number of domestic and global long- and short-run supply and demand factors. From 2007 to 2008, spring nitrogen prices increased by a third, phosphate prices nearly doubled, and potash prices doubled.

The price spike in 2008 reflects low inventories at the beginning of 2008 combined with the inability of the U.S. fertilizer industry to quickly adjust to surging demand or sharp declines in international supply. Declining fertilizer demand, disruption in fall applications, increased fertilizer imports (July to August), and tightening credit markets for fertilizer purchases contributed to the decline of fertilizer prices in late 2008.

The prospect for strong fertilizer demand in early 2009, high raw material costs for the manufacture of fertilizers, production cutbacks, and decreasing supplies from fertilizer imports, however, could put upward pressure on U.S. fertilizer prices in spring 2009.

Click here for a more complete report from USDA-ERS.

ANLA Management Clinic Blog

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In order to stimulate interest in the 2009 ANLA Management Clinic, ANLA developed a one-day blog entitled Managing Through Tough Times. For one jam-packed day, industry leaders, including business owners, consultants, and editors, provided ideas for managing costs, driving sales, targeting new customers and motivating staff in the midst of strong economic concerns. Check out these thought-provoking (and action inducing) blog entries by clicking here.