New Directions

In this slight twist on a state-of-the-industry report, we present the opinions and perspectives of green industry decision makers. They tell us where we are-and where we're headed.
An American Nurseryman Report

You've seen fact and figures; you've scanned charts and graphs. But what's the mood of the green industry today? Well, if you're tired of hearing the phrase, "The New Normal," you just might have to get used to it. There is indeed a "new" normal, and by all indications we're not going back to the way things used to be.

For this report, we contacted green industry association execs as well as owners and managers of individual companies. Each was asked the same questions, but each offers a unique point of view on where we stand and what's in store for the foreseeable future. Let's see what they have to say.

Association perspective

Representing the industry through their respective associations, these executive directors have tough jobs. One of the benefits, though, is the advantage of a broad perspective.

Our respondents include:

American Nurseryman:

What do you see as the top three critical issues the industry is facing? The single biggest challenge?

Ben Bolusky: The single biggest challenge is the economic recovery, namely the nation's general uneasiness and the business community's uncertainty about the future. The next three critical issues are: water; a legal workforce; and plant pests and diseases. With respect to water, the issue is not so much water shortage as it is water storage. The challenge is finding funds to build the needed infrastructure.

Bob Dolibois: Profitability - The Spring of 2012 has been as good of a season weather-wise nationally as anyone could reasonably expect. Despite that blessing, I continue to hear reports that sales, while strong, have not achieved the expected down payment needed to begin recovery from the recession. In other words, in even the best of times in this new normal, the results are not sufficient over the long haul. That suggests to me that profit margins are not sufficient for sustainability.

Ben Bolusky, chief executive officer of the Florida Nursery, Growers and Landscape Association (FNGLA; www.fngla.org)
Photo courtesy of FNGLA

Financing and credit - Access to financing and short-term credit is an essential element of most seasonal businesses. The upheaval in the nation's banking and credit industries has, at a minimum, added stress, uncertainty, and restrained our "animal spirits." At worst, the problem has led to business closures, only some of which would have been warranted in recent years.

Capital investment - This has been a long, multi-year slog. Most businesses have not only reduced staff and scope, but they have delayed replacing aging equipment, postponed building maintenance and other capital improvements. These necessary actions have undercut morale, reduced productivity and may even accelerate closure of businesses prematurely rather than their facing longer-term returns on new investment.

Bob Dolibois, executive vice president of the American Nursery & Landscape Association (ANLA; www.anla.org)
Photo courtesy of ANLA

[The single biggest challenge is] Profitability. Profitability. Profitability. Note: It's a very rare business that achieves prosperity only by cutting expenses.

Bob Fitch: Recovery in the sales of trees is the biggest challenge. Parts of the green industry have been able to somewhat adapt to the new economy, but it's a tough road for tree growers when we don't have a booming housing market.

Michael Geary: The economy continues to keep pressure on the industry. Even with signs of things getting better we are hearing that growers and retailers (and consumers) are still not completely confident about the future, and that's impacting decision-making about the future. Also, residential and commercial construction continues to limp along and that directly impacts the use of our products. We also have the reality of a shrinking consumer market due to the smaller number of people that make up Generation X.

Bob Fitch, executive director of the Minnesota Nursery & Landscape Association (MNLA; www.mnla.biz)
Photo courtesy of MNLA

Jeff Stone: Identifying a single challenge is a tough thing to do. If you look at issues that can bring a nursery to its knees in a hurry, the greatest challenge is managing a business in the new economic climate and adjusting to the changing demands of customers. This economic downdraft has touched every part of this nation, every size of operation, and continues to be a struggle as the nation and our industry grapple with a new economic normal. Coupled with increased costs of production and a more regulatory stringent atmosphere - how the nursery and greenhouse industry adapts to a changing marketplace will be the seminal moment of how we emerge for the next generation.

Two other issues remain big challenges for the industry: labor and water. The toxic atmosphere over immigration and resolving a guest worker program is near the top of our list. Oregon's business community came together to create a coalition to be a voice for reason and conducted a third party study of the economic ramifications to the state if labor-dependent industries lost their workforce. The results were sobering. And we're seeing the scenario played out in states like Alabama, Georgia and Arizona, who now have to deal with shortsighted decisions on immigration. Oregon's economy would shrink by $17 billion, tax revenues to the state would plummet, and most interesting in the report - the unemployment rate would not drop. In fact, due to the economic calamity, the unemployment rate would increase by 7 percent. Oregon has not gone down this path, which would wreak havoc. However, I fear others will and we will be faced with a 50-front war on immigration.

Michael Geary, chief executive officer of OFA - The Association of Horticulture Professionals (OFA; www.ofa.org)
Photo courtesy of OFAa

Water is another essential for the industry; without it the product mix to grow is severely hampered. The Oregon nursery industry is water-dependent. In fact, almost half of the state's 1.7 million acres of cropland is irrigated - this ground accounts for 77 percent of the value of all harvested crops. As the population grows and water supply becomes scarce, agriculture is often the loser in public discourse over availability and it will have big economic consequences.

American Nurseryman:

To many in the industry, economic recovery seems longer and slower than that of other industries. What's the current status of the ornamental horticulture industry? Where do you see us next year? In five years?

Bolusky: The current status of our industry is a soft recovery. A slow, steady, long term recovery will allow the industry to brace against recurring roller coaster rides of peak-boom and valley-bust cycles. Barring a national business-disrupting calamity, the industry next year will be continuing a slow, yet measurable, recovery. The market pie will likely be slightly larger, benefiting the fewer market players who endured the Great Recession. The pace of change is accelerating so fast that no one can any longer responsibly predict five years out.

Dolibois: I believe a good portion of the sustained downturn we (and most consumer-oriented industries) are experiencing is a result of macro demographics in our country; in fact, the world (see: Japan and Europe). The Baby Boomers have bought everything they need from us. The Gen-X successors are now in prime buying years for our stuff, but there are millions and millions fewer of them than Boomers. It's a function of demand and supply. Demand is down because there are fewer people demanding what we sell. We've got at least 5 to 8 more years of this demographic downshift, until the Millennials get old enough to buy houses and want our stuff in the quantities that we have the current capacity to supply.

Fitch: Too much tree inventory is still kicking nursery growers' teeth in. Hopefully, we're beginning to see the light at the end of that tunnel. With the massive changes to the economy and how fast things can now change, I think it's very tough to predict where we'll be in five years.

Geary: Candidly, I don't think anyone knows with any great confidence what the industry will look like in three or five years. While we like to think we're in a protective bubble here in North America, we are hugely impacted by the economic conditions in Europe. Until that settles down we will live with some anxiety, and that keeps people from buying. And most consumers may consider buying our products a luxury. Luxury products, including cars, are just beginning to see an uptick. However, despite anxiety there is greater confidence than a few years ago and we see some businesses willing to take risks. In fact, for the OFA Short Course we expanded the number of exhibitors because of increased demand.

Stone: There is no doubt that the economic recovery is taking longer than expected. The Oregon nursery and greenhouse industry was at its peak with wholesale sales of almost a billion in 2008: Flash forward to today - we are at $652 million. That is quite an economic hit.

It is my firm belief that the nursery and greenhouse industry is resilient. Facing economic forces of the housing collapse, low consumer confidence and fuel prices at a historic high, it would be too much for many to ride this economic downturn out. For many, looking at innovative ways to streamline production and reduce costs is no longer an add-on, it is a necessity. There are several ways that Oregon is attempting to do this. We are looking at using the cumulative knowledge of nursery owners - we use lean manufacturing as a model - to improve a segment of the production cycle. Our industry has been very aggressive to find partnerships to help offset costs to become more energy efficient. This is a true bottom line effort, and the association went as far as to adopt a goal of 25 percent energy reduction in 10 years. These are efforts that will help in the short and long term. We must also find ways to diversify how product gets to market. Seventy-five percent of Oregon's nursery product leaves the state, and it is imperative that we examine ways to become more multi-modal and work to make a pricing structure of the use of rail a reality.

The next year will continue to be a challenge, but there are signs of light at the end of tunnel. The next five years will be a slow climb as the nation finds its economic footing. We will emerge wiser and leaner to meet the next set of opportunities.

American Nurseryman:

With individual states taking drastic measures to control immigration, pockets of the industry have lost a significant portion of available workers. What's being done, and what needs to be done, on a national scale?

Bolusky: Common sense and compromise need to return to Congress for meaningful and balanced progress to prevail in the sticky wicket policy arena of immigration and labor. The policy pendulum is always swinging, yet, when it comes to immigration, the pendulum's returning arc has been far too slow and too long. Nationally, once the borders are perceived to be secured, there will be some light in which to drive needed immigration reforms. Such policy reforms must include guest worker programs needed by both agriculture (nursery) and service (landscape) businesses historically reliant on foreign workers. In the interim, a slow, steady, long-term economic recovery may ease any sudden labor needs, yet the specter of anti-immigrant initiatives are troublesome.

Dolibois: Based on the level of resources the industry is willing to put into this effort (not enough, incidentally), everything that can be done is being done ... and more. Most businesses (large and small) have little or no direct need to rely on immigrant labor. It is literally an out-of-sight, out-of-mind condition relative to their business success. It is not, however, such an invisible factor in their communities where these immigrants and their families live. Absent an understanding of their contribution in the workplace, many Americans see immigrants as detracting rather than adding value. Our history confirms that we're hard-wired to protect our own culture.

The real culprit, however, is a totally broken and dysfunctional set of immigration laws. As was true with laws of slavery, suffrage, prohibition and racial discrimination, these laws need to be fixed, not defended.

Fitch: The Democratic administration has to get real on the problems with the H-2A and H-2B visa programs. Republicans in Congress have to stand up to the xenophobes in their constituencies. If the economy is going to have a chance of long-term recovery, we have to have willing workers where we need them, when we need them. Is there enough political courage out there? I hope so, but I'm not holding my breath.

Geary: What is being done is that we are doing a better job of telling the story of how draconian laws impact our industry and ultimately consumers (increased prices, product scarcity). This discussion extends beyond just "labor." We need to grow our own food to feed our citizens. Therefore, this is also a national security and economic issue. This is serious and that's why the national associations are actively lobbying Congress and the Obama Administration on finding a solution on agriculture labor.

Jeff Stone, executive director/CEO of the Oregon Association of Nurseries (OAN; www.oan.org)
Photo courtesy of OAN

Stone: Immigration is an issue that has permeated most kitchen tables around our country. It has joined the pantheon of top tier social issues. There are strong feelings and some harsh rhetoric on both sides: America needs to secure the border; America needs to be a welcoming society; the immigration system is broken; illegal is illegal; we are a nation of immigrants. Both sides are partially right and this is why our Congress needs to end its two-decade avoidance of the issue. The absence of a sensible, comprehensive immigration solution has forced states to take matters into their own hands. This is a very bad trend and will only exacerbate the friction between strong, opinionated citizens.

The Oregon nursery industry has been a long-standing advocate to create a system of immigration that not only accounts for workers entering the United States, humanely treating those who have already come here to work and create a better life for their families, but deals with a future flow of workers so our children and grandchildren are not faced with the same set of circumstances we face now. We did not get in this mess overnight; we won't get out of it that way either.

The nursery and greenhouse industry must put its political clout on the line - now more than ever - at the state and national level. The ANLA needs states to hold their elected congressional members accountable. In our view, a comprehensive solution must be crafted and passed. It must include border security and greater accountability of who is in the country. Include employer sanctions against bad actors and, moreover, do what the immigration act of 1986 did not do: have a process in place to help a future flow of workers when the economy rebounds.

We cannot afford to allow Congress or the states to enact "enforcement only" bills. We need a president, a congress and an industry to get behind something that solves the problem and not kick the can down the road.

American Nurseryman:

Other than labor, what are the top legislative challenges? What can individuals and their companies do?

Bolusky: "Simplify" is an elegant word. A legislative goal for all businesses should be to simplify government rules and red tape. Business owners in our industry are innovative entrepreneurs. They will figure out ways to adapt. Yet, efforts to decipher often Byzantine and conflicting federal, state and local rules zap businesses of precious resources (financial and staff) that can otherwise be reinvested to make stronger businesses. Aside from labor, rule and regulation simplification is the not-so-secret formula to future success. So, what can individuals and their companies do? For their elected officials, they can begin to highlight and identify rules and regs that are duplicative, counterproductive or overly costly. There is no time like now to start the dialogue.

Dolibois: The biggest challenge is determining how big of a government we need and how to pay for it. Darn near everybody (including me and you) has their snout in the government trough in one place or another. The tax code is too complicated and riddled with loopholes. Those loopholes are supported by well-resourced believers - left and right. It's time to hit the reset button, as has happened cyclically throughout our history. What we all need to do is be informed (not just entertained) and get involved politically; at a minimum, support the trade associations battling on your behalf.

Fitch: The threat to water use for nursery products and the managed landscape too often gets overlooked by many in our industry, especially some of us in the north. In one respect or another, our water use is threatened at the local, state and national levels of government - a triple threat we shouldn't ignore. Each and every company or individual is responsible to take a role: reduce your water use at your operation and then tell your customers you did it; show up at a local planning board meeting and push for developments to include the proper plants and landscape features to minimize water use; participate in your state association's Day on the Hill; or follow through on a request for action from your national association.

Geary: Collectively, several of the national associations are working on issues related to financing for small businesses, ensuring the continued funding for research and plant protection, and macro issues that impact nonprofit associations and our ability to effectively serve our members and the industry.

What individuals and companies can do is pay attention to the political environment and our calls asking them to get involved (for example, writing an email to your Senator or Representative). And, while this may sound self-serving, maintaining your memberships in OFA, ANLA and your state association is incredibly important in order to support our regulatory and legislative initiatives. The more members we have, the greater the impact on our efforts.

Stone: Each state has its unique legislative challenges. For Oregon, we have added our voice to many to help support funding for specialty crops through the Farm Bill. No one entity - let alone individual - can go at this issue alone. Through our shared work, funding for pest and disease, specialty crop grants and research is in play in Congress. How we pass our farms from one generation to the next, regulations on how the nursery industry does business and big unwieldy issues like the Clean Water Act and transportation infrastructure investment to allow product to get to market - all take a deft political touch.

These big issues can be found in any individual state. The association, through involved members, help shape legislative priorities and it is important that they find their voice. One suggestion to make a difference is to host a public policy maker at the nursery or greenhouse operation. Show them what you do and explain the challenges you face every day. Oregon uses this approach and it has a profound impact on our legislative success. Through the strength of our members - we can tackle tough and complex issues such as funding for water quality and storage, seek a friendlier regulatory environment, and make the economic case that for every nursery that succeeds - the state succeeds. Oregon has an aggressive federal and state policy positions - it is solution-oriented, not partisan - and we have members who can tell the story better than any lobbyist or association.

American Nurseryman:

Every few years the concept of a national, generic marketing campaign is suggested. Will this kind of program be implemented? How has social media changed the game?

Bolusky: Our industry remains too dispersed, diverse and independent-minded to launch a truly national marketing campaign. Yet, there are many industry companies that are doing just that on their own (for example, Home Depot, Lowes and Miracle-Gro). And, if you watch network and cable TV, many national corporations use plants and landscapes as beautiful backdrop settings to market their products unrelated to our industry. When economic times are good, no one admits to needing a national marketing campaign. When economic times are not so good, no one admits to having available funds for a national campaign. The advent of social media has not changed the game; rather it has opened up a whole new front in one's marketing game. To be successful, one must learn to master and sustain social media excitement and, just as importantly, learn how to use and build on the valuable feedback it can generate. In five years, there will likely be entirely new platforms of social media not yet envisioned.

Dolibois: Industry history demonstrates that the clamoring for a marketing campaign occurs every 10 to 12 years. We're a little overdue, compared to the timing cycle for our last nine campaigns. Most successful marketing campaigns are based on competing against a single, clear and measurable competitor (milk vs. soft drink; pork vs. "red" meat; cotton vs. synthetics). That's a tough challenge for us. At this point, I believe that social media has changed the way we play the game, but I'm uncertain that it has actually changed the game.

Fitch: Dreams and wishes won't create a real program - show me the money. Why should the retailers or landscape companies who have put years and real dollars into their own marketing programs want to divert some of their resources into a new "generic" campaign? We might be able to work around the money issue to a point if we could at least all rally around a single message like "Plant Something."

Geary: I don't know yet if a full-on national marketing campaign will be implemented in the near future. What I do know is that our members are asking OFA to explore the effectiveness of a campaign, etc. We are doing that right now through our Board of Directors, committees and special task forces. In the meantime, we should remember there are already a variety of regional campaigns, and many businesses themselves are actively promoting the value of plants. Also, for 10 years the industry has had the benefit of America in Bloom, which is managed by OFA. It is successful and can do more with increased support from growers and retailers. That program is directly increasing the consumption of our products.

Stone: When I talk to the dairy industry, I am envious of the "Got Milk" campaign that transcended the public consciousness and became a signature call for use of their product. Those national campaigns are hard to come by, and even more so with the wide mix of products the nursery and greenhouse industry grows and sells. This does not mean we should not try.

The difficultly and challenge we face is that much of how the industry markets itself has a strong regional tie. The closest thing I have seen has come out of the State of Arizona and their "Plant Something" campaign. This idea should be seriously considered due to its outright appeal to communicate the benefits of planting trees, plants, flowers and vegetables. It hits homeowners to improve their home, communities to enhance their quality of life and most important to the nursery industry - promote the buying of our product. The Arizona Nursery Association is a pioneer in hitting a phrase that has a national feel but may customized for a state effort.

The challenge for any state or for a national campaign is funding. The dairy industry was able to amass dollars from its producers for a national public relations drive. During challenging times, are there the dollars to dedicate for such a campaign? It is my view that this type of campaign is well-suited for a ground-up (or grassroots) approach and connects the local retailer or grower to the community. Plant Something is simple and smart and shows our green side - that is a huge step in the right direction.

As for social media, Oregon has put emphasis on this area for our retail and wholesale trade shows. It has great possibility to amplify the word of mouth part of marketing. Is it a difference maker for nursery and greenhouse operators? That remains to be seen.

American Nurseryman:

The green industry is alternately seen as an environmental steward (improving soil and air quality, beautifying properties, restoring compromised sites) and a party to destruction (introducing/selling invasive plants, employing chemicals). Where do we stand on both fronts in 2012? Where are we headed?

Bolusky: As self-proclaimed, yet genuine stewards of land and water, our industry has not aggressively promoted its environmental credentials among our most natural allies: our clients and customers. Given that gardening is our nation's No. 1 pastime, we should figure out ways to corral gardening consumers to help us battle environmental zealotry. Of course, if this was easy, we would already be doing so. Yet, imagine the potential grassroots help from gardeners who could stand to lose their treasured roses because they are not native to their area. Or how about the untapped grassroots help from gardeners who are told they can no longer spray garden pests or must stop using fertilizers on their home landscapes during the rainy months of the year?

Dolibois: For the first 150 years of our industry, we have thrived on the notion of beautification. A synonym for "ornamental" is "non-essential." For a product that demands increasingly scarce resources, like water, or fraternizes with scary things like pesticides, the last thing we want to be is "non-essential."

On the upside, we have a great story yet untold about the true value - beyond pretty - that our products and services render to the community and the environment. The telling of that story (and it is a story, not a label) requires a better understanding of our readers' (customers) interests and our own biases. Like: Yes, you can prune a native plant so it isn't just the weedy old thing that the crazy eco-lady down the street has in her messy yard ... .

Fitch: Many growers, garden centers, and landscape and irrigation professionals have a long ways to go in cleaning up some aspect of their day-to-day operations. But, overall, we have a great story to tell about the environmental benefits of trees and other plants; how landscape practices can mitigate stormwater runoff; how new irrigation technologies and practices can reduce water usage, and much more. All sectors need to repeat these messages again and again and again.

Geary: Candidly, as an industry we have not been tackling this issue in a broad and collective way. However, there is great work being done on stewardship, product development and certification by several consortiums, universities and companies. We have been involved in a few proposals and [are] monitoring others. Horticulture is a big industry and it's going to be tough to address everything in a simple way and get buy-in from all stakeholders, just as it is in other industries. Thankfully the independent actions I mentioned earlier will eventually filter out through their own initiative, and I expect our trade associations will, at a minimum, provide guidance on the design of programs and help companies identify the right platform for them. Furthermore, like any market-driven industry, we will respond appropriately when consumers demand more sustainable products. Many companies are already doing so.

Stone: It is my belief that the nursery and greenhouse industries have spent generations as stewards of the state's natural resources. It is a core value that economic vitality can go hand-in-hand with sustainability and long-term environmental health. The industry over the past 20 years uses fewer pesticides, has become more water and energy efficient, and fosters a resource ethic that should be embraced by the environmental community.

How the industry positions itself in emerging environmental markets and making the case for the use of our plants and trees for restoration and environmental offsets may be the difference. Tapping into municipal and transportation infrastructure will need to go beyond symbolic or infrequent successes at the governmental level - but a full-on marketing effort that extends from coast to coast. We need to monetize sustainable activity and, considering what this industry represents and grows, we risk leaving money on the table if we do not change or embrace it. While the handshake agreement is slowly giving way to real time smartphone images and online purchasing, we cannot lose sight - no matter if it is at the governmental, environmental or customer level - that relationships matter. Through collaboration and relationships, I have unflinching faith that this industry can redefine and promote its environmental stewardship and commitment.

Owner/manager perspective

Owners and managers of private companies have enough to do just to keep the business thriving. But do they focus exclusively on the day-to-day? That's a silly question, isn't it?

Our respondents include:

Rick Crowder, general manager, Hawksridge Farms, Hickory, N.C. (www.hawksridgefarms.com)
Photo courtesy of Hawksridge Farms

American Nurseryman:

What do you see as the top three critical issues the industry is facing? The single biggest challenge?

Rick Crowder: Labor, fuel costs, lack of new construction, both residential and commercial. [The single biggest challenge?] Labor.

Tom Demaline: Immigration reform - Currently lack of domestic labor is a concern for any green industry business. If you are using a government program like H-2A, it is a bureaucratic nightmare. Excess regulation and government roadblocks make the program very expensive and difficult to use. You never know if and when you are going to see your workers in the spring and what government agency is going to visit you during the growing season. On the flip side, if you are not in H-2A you have questions to answer: Does my work force have proper documentation? What are my risks in the event of an I-9 audit? In any case I also feel we are starting to see a labor shortage. Many growers I talked to this year were not able to completely fill their needs for general labor.

Tom Demaline, president of Willoway Nurseries Inc., Avon, Ohio (www.willownurseries.com)
Photo courtesy of Willoway Nurseries

Government regulations and overhead - We are continuing to see more regulations that increase our cost of doing business. No one regulation is overwhelming, but collectively it has increased overhead costs, either directly or indirectly from increased reporting. Other overhead costs such as health insurance, workers compensation, unemployment, fuel and utilities are continually increasing, and you do not have many options or alternatives to reduce them.

Margin erosion - I feel this is the biggest problem facing our industry. Everybody has cut cost and reduced capital expenditures to stay in business. As we were reducing prices to move inventory, our cost of doing business has continued to increase. I do not believe that this is a sustainable business model. We have to be able raise retail prices to consumers to a level that allows for all levels of the distribution chain to be profitable. If business owners are not able to receive a reasonable return on our investments, why will future generations want to take such a large risk?

Jeff Edgar, co-owner of Silver Creek Nurseries, Manitowoc, Wis. (www.silvercreeknurseries.com)
Photo courtesy of Silver Creek Nurseries

Jeff Edgar: Those outside our business, with a high level of power having influence on how our business takes place, yet we have little or no influence on the decisions they make.

A lack of industry cohesion.

What will tomorrow's customer want and how will the industry be able to influence and cater to that?

Gary Knosher: I think the three most critical issues facing our industry are as follows, starting with the biggest challenge:

1. The slowness of the economy is still the biggest factor having a negative effect on our industry.

2. The second would be a concern for a labor shortage, with some areas already feeling the pinch. As the economy improves, this problem will quickly rise to be the No. 1 problem.

Gary Knosher, president of Midwest Groundcovers, St. Charles, Ill. (www.midwestgroundcovers.com)
Photo courtesy of Midwest Groundcoversa

3. In general, I think the third major issue facing our industry is the introduction of foreign pests and diseases, and the devastating effects they have had, and will have, on our crops.

Jeff O'Donal: Issue 1: Lack of acceptable market. This is two-fold: Housing industry and construction industries are stale, so there is no increasing need for our products. Then, what there is for product is being saturated both in independent garden centers as well as discount box stores. Brand plants are much too available in discount stores, making price comparing much too easy, and Independents come out looking like over-priced gougers. As it is, we can't really ask as much as we need to get the margins we really need to survive. Flooding discount stores just to dump inventory hurts everyone in the industry

Issue 2: Lack of Industry Identity: See problem 2 above, and add to that the fact that plants no longer have scientific names that are pronounceable, spellable or memorable. When cultivars make no sense to anyone but the breeder, it helps no one in the retail industry. Our customers don't know what to ask for. There is a perception that customers have been marketed to well enough to ask for "the blue pot," etc. Wrong. In fact, this has confused them into thinking that any hydrangea in a blue pot is the one they want. How many times must we in retail fix this perception by replacing a lacecap with a mophead? Apparently not enough times yet. Every time we do this (and we must) it costs us money, and the program-owner makes double the money.

Issue 3: Okay; I'll join in here with everyone else: Government regulations, from unfair taxation to unfair employment regulations have created an industry that must have cheap labor to keep prices low, but left us no availability of an effective workforce. We do not use migrant workers here, but fill our needs with local help. Yes, it is more expensive, but we have been able to succeed while still providing benefits directly to local families and communities. How do we correct this? We support ANLA in every effort. Will this succeed? No. Neither the federal government nor state governments care about fair or sensible statutes. Those in government now represent and support government, not those who elected them in the first place.

The single biggest issue, pure and simple, is lack of market. With plants in discount stores with the same labels and pots as we are selling, there is no way we can make the margins we need to. When independent garden centers are able to offer completely different items than discount stores, then we compete well. Except that, there is a glass ceiling over which customers will not spend in good enough numbers to support our entire industry. As long as growers sell program plants to discount stores, our industry will suffer. If we could get acceptable margins for all that we sell, all other issues will become non-existent.

Bart Worthington Regulation & legislation at state and federal levels. Political turmoil at state and federal levels; no cohesiveness to give a sense of stability. Immigration/labor reform.

American Nurseryman:

What do you see as the top three critical issues your business is facing? The single biggest challenge?

Crowder: Labor, balancing product mix, marketing ourselves better.

[The single biggest challenge?] Marketing our company and products.

Demaline: Top issue is inventory management. Finding the match between what we are growing and what consumers are demanding. This is increasingly difficult with long-term crops. The risk of investing in a crop and growing it for four or five years to find out for whatever reason there is no market is not sustainable. Somehow we need to come up with a way to reduce this risk.

Edgar: Economic uncertainty.

Aging management, without a next generation of family to continue the business as "our family business."

Rising costs of doing business vs. the current shrinking returns on our investment in this business.

Knosher: The first is still the economy. Even though things are improving, we still have a long way to go to get back to where we were. The second would be not having enough available seasonal labor to get the work done. This was the first year we were not able to fill all of our seasonal positions. As the economy improves, we expect this problem to quickly become our No. 1 concern. The third is related to the first two, but different in a way, and that is finding a way to be profitable. Increased sales and available labor won't necessary solve all problems, especially if we cannot get the prices we need, and the labor costs more than we can afford. We need to find ways to be more efficient and drive our costs down.

O'Donal: Issue 1: Lack of acceptable market (see #1 above in its entirety).

Issue 2: Lack of product identity (see #2 above in its entirety) and add the selfishness of breeders/growers associated with brands that require colored pots and tags is appalling. When was it that the type of pot a plant is sold in became more important than the plant's appearance and performance in the landscape? I apparently was out to lunch when this happened. Silly me, but I thought it was our job to help people with choices of plants based on their needs, site and soil. I also thought (and was taught in college) that it mattered what a plant's name was. I was taught that there is a binomial system in naming living things, and variety names were important to be part of the scientific name.

Selfishness has now led to breeders using their initials, numbers or whatever other codes they can think up, whether or not they can be remembered, spelled or pronounced; these codes are the "cultivar name." Nonsense. We must force this issue and return to cultivar names having the importance they once had. There is absolutely no reason for nonsense being a cultivar just so we are forced to use trademarked titles rather than the cultivar. In fact, there is no reason (other than greed) why the cultivar and trademark name can't be connected enough to use the same word or version for both. We are otherwise sliding down an extremely slippery slope that will kill our industry.

Issue 3: Water and Pesticide Use: We use well water for irrigation. That said; if we water during dry spells, we are very visible doing so. Any appearance that we are wasting water for our own benefit or using pesticides unwisely, and our business and our industry are perceived as wasteful or hurtful. We are the experts in explaining how to succeed in gardening, and we have to be expert in appearing to do it ourselves in the correct way.

The Biggest Issue/Challenge: Trying to get enough margin for products that are being offered at a discount everywhere you look.

Worthington: Inconsistency in markets; future planning is very difficult. Delivery - fuel cost and regulation. [Single biggest challenge?] For us, our markets are still unstable: One month sales are good, the next month not so good. Without the confidence that our markets have stabilized it is really hard to predict what our inventory should look like for future sales.

American Nurseryman:

For better or for worse, how has the economy affected your business? How have you changed your operations?

Crowder: Better: It has caused us to step back and re-evaluate our operations and procedures. We have learned to do more with less. Less people and less money. Worse: Downsizing employees that have been with the company for a long time; shrinking profits. We cut back on the labor force first by cutting out as much overtime work as possible. We have reorganized and combined positions to absorb the loss of employees. We have always focused on customer service, but we have tried meeting our customers' needs more, such as, we have changed delivery minimums to accommodate our customers having smaller orders than a few years ago.

Demaline: The positive effects of the downturn in the economy: Overall we have been able to look at cost and been able to increase our efficiencies. At the end of the day we are better off for it.

The negative effects of the downturn? It has made it increasingly difficult to set a direction and move forward with a business plan. You have to continually review what you do, why you are doing it, down to the smallest detail.

Edgar: For a while, we operated under a "business as usual" business plan, hoping the economic downturn would be short-lived. When it became apparent the economy wasn't going to recover as quickly as everyone hoped, we began to look inward and try to make better use of our assets and talents. We have cut back on our nursery stock production in favor of some traditional farm crops, while employing different growing methods to help continue growing a good amount of nursery stock. In many terms I think we've become a stronger company, it just isn't much fun gaining that strength and we aren't out of the woods yet.

Knosher: From the sales peak in 2008, our sales fell off about 30 percent, and hit the bottom in 2010. Since then, things have been slowly getting better, but there is a long way to go to get back to where we were. In order to help grow sales, we have attacked the issue in several ways. The first was to expand our product lines so we could offer more to our existing customer base. The most significant change was the addition of our greenhouse Bud & Bloom program. We have also tried to expand our markets by venturing into areas that we have not sold in before. The most significant here would the native and restoration markets.

O'Donal: The economy has killed the fun that we used to have. It's work now just to try and succeed. Five consecutive years of diminishing sales totals is not fun at all. On the flip side, we have become better business people to a point. We have reduced costs as much as we can without becoming a very different business. That said, our employees are restless. We have saved the company on their backs and the backs of the rest of their family. Something drastic must happen to allow us to reward them all for their sacrifices.

We obviously noticed sales increasing in the departments laden with cheaper costs, and a reduction in those departments (caliper trees anyone?!) that costs were high in. Reductions in those higher costs were necessary. For a company known for having larger plants, this was a drastic but necessary choice. Still trying to offer value for the dollar, we purchased the rights to the Barth Hybrid Daylily line and continue to expand our offerings in that line. For pricing less than most flowering shrubs, we now offer our customers an improved perennial that cannot be found at any discount outlet.

Worthington: Better - We have become more efficient. Our sales fell over 50 percent, so all segments of our business were revaluated. We are a much better run company now, than before.

Worse - We laid off a lot of good employees and lost a lot of good customers. We have reduced staffing. Cross-trained everyone to do various jobs. More time spent on inventory planning and supply purchases. Shut down part of our production facility. Outsourced work to contractors and professionals, rather them doing them internally. Reduced inventory SKUs.

American Nurseryman:

Where do you see your business next year? In five years? Will your business grow? Will you change what you grow?

Crowder: In the next five years, we see a gradual increase in sales. Our goal is about a 10 percent increase each year, and that should bring us back to our sales in 2007.

Yes, I think our business will grow over the next few years. We have always felt that one of our strengths is new introductions and unique additions to our inventory, and we will continue to strive to help bring new plants to the market.

Demaline: Many factors need to be taken into consideration moving forward. It has become obvious that we are very dependent on new housing. I do not see much change in housing starts for the next few years. There is also uncertainly in what Gen Y is going to want in a house. Will it be smaller? Will they even want to own a house, or will they rent so they can be mobile? Currently I think it is too early to speculate on growth until we are sure we are on the bottom. We are continually evaluating our product mix to meet market opportunities, however these corrections are small. We feel there are only so many holes going to be dug each year by consumers, so if you increase in one area you need to evaluate what may be reduced in another.

Edgar: Our business has gone through a handful of changes since we opened our doors 53 years ago (from a landscape, to a retail garden center/landscape, to a wholesale supplier to chain stores to a grower of larger plants for the wholesale market). The physical size of our business has not changed in the last 10 years and we don't foresee any changes along that line. Along with some new or improved products and expanding the use of an innovative growing method, I can see the economic portion of our business growing.

As far as our plant offerings go, it's difficult to make fast changes. We can't change over night, but in five years we might look a little different.

Knosher We are certainly planning on making our business grow, and will do whatever it takes to make that happen. We will continually refine our product line so it meets the needs of our customers and target markets. It is hard to predict how quickly we regain all that was lost, but we will just be happy with steady growth.

O'Donal: Our company will survive based on its ability to make those changes necessary to compete in our market. We currently see a slight improvement in request and demand for those larger and more expensive product lines we used to believe we specialized in: B&B shrubs, caliper trees, etc. We will also continue to expand the Barth line to continue offering plants not available anywhere else. We hope to be able to set aside some money this year to make infrastructure improvements that have been waiting for an improved bottom line.

In five years? We will continue to tweak our product lines to reflect exclusivity as much as possible. We currently grow quality B&B stock on approximately 60 acres. We constantly tweak what is planted in these fields, and this year has certainly shown that we need to be able to improve numbers quickly here. We have been dallying with larger pot-in-pot growing, and see an increase in this area as well. As more retailers and many rewholesalers offer less sizes and quantities to control inventory costs, we hope to be in a position to take advantage of this and be the place to get those missing items. We are currently looking into the possibility of acquiring more lines in the same manner that we acquired the Barth Daylilies. This will improve our exclusivity.

Worthington: No major changes, maybe a slight increase in sales. Yes, [business will grow] because we will be expanding into new regions. [Will you change what you grow?) No, we have pared down the number of varieties and sizes we grow, but don't see a change in our type of product.

American Nurseryman:

Please briefly describe your company. Specialty, size, general location ... whatever you'd like readers to know.

Crowder: We are located in Hickory, N.C. We are in the foothills of the western part of the state. We have about 60 acres in production. We are a container nursery and have both pot-in-pot and aboveground operations. We just began our 30th year in business and feel like our success has come from staying on the cutting edge with new varieties and cultivars of plants.

Demaline: Willoway Nurseries is a 1,000-acre nursery in Northern Ohio, growing 2,000-plus varieties, made up of woody ornamentals, perennials and annual color. Our customer base is made up of landscape contractors and independent garden centers in 26 states.

Edgar: Although we specialize in field growing larger shade and ornamental trees, we also have a small container tree, shrub and evergreen operation. The last few years have seen the addition of a line of fruit and specialty trees, which we graft ourselves. We also invented, manufacture, distribute and service the Calipro Tree Inventory System. Our main customers are: landscape contractors, rewholesale nurseries, municipalities and garden centers. We own about 400 acres of farmland. Currently more land is being planted in traditional farm crops than trees. We are located in Wisconsin, near the shore of Lake Michigan.

Knosher: Midwest Groundcovers is a regional nursery serving independent garden centers, rewholesalers, landscape contractors, municipalities and restoration companies in the greater Midwest. Our product line includes groundcovers, flowering shrubs, conifers, roses, perennials, vines and native plants.

O'Donal: We are a retail garden center; rewholesaler and field grower located in Southern Maine in the Greater Portland area. The business was initially started by Mr. Thomas Jackson in 1850, and the O'Donal family has owned it for over 60 years. The garden center sits on a 10-acre parcel used primarily for "ready-to-sell inventory" as well as propagating and growing the Barth Daylilies. Approximately 60 acres of production fields are located in three other locations, one directly across the road from the garden center. We currently produce extremely high-quality trees and shrubs in these fields; and are our largest supplier of B&B plants. We employ 36 locally rooted employees through the selling season; with eight full-time, year-round.

The originator of the business, Thomas Jackson, was an internationally known plant propagator and had a sales broker office in New York City to be near the freighters and rail-lines that shipped his plants throughout the U.S. and Europe.

Worthington: Wholesale grower of drought-tolerant plants for the Southwest. Growing facilities in Glendale and Cochise, Ariz. Approximately 400 acres of containerized and field stock. Customer base is landscape contractors, independent nurseries and rewholesalers.

American Nurseryman:

Anything you'd like to add?

Crowder: When the downturn began in 2008, we stepped back and took a serious look at how we were doing business. We decided if we did not drastically change the way we were doing things, we may not survive. We are now doing far more branded products than we ever imagined, and we have become more aggressive in our sales and marketing efforts. The days of sitting back and waiting for the phone to ring are long gone for us. Our niche for many years has been new plants, even before the downturn so that certainly has helped us too.

Edgar: This is the fun part...

First I want to qualify my statement about outside influences. Government (federal, state and local) leads the list, with legislation or lack of legislation in so many key areas. I wholly understand we are not big business in the eyes of many and we often don't receive the attention I believe we're due. We do have things to say and we do have realistic answers to issues, yet it seems too often we're ignored.

The trend to ban plants based on the fact they are not native to an area, when those areas are delineated by artificial boundaries. Many of our plants are planted in artificial landscapes and asked to thrive under these artificial conditions. The so-called exotics while offering sizes, textures and colors that natives also can't offer are able to survive in our artificial world.

A few years ago, I became aware of the clever and descriptive term "Nativar." I think nativars, as a category, will receive more attention as time goes on and maybe quench our thirst for different plants in our artificial world, yet whose origins might be closer to home.

There are plant monsters out there and more will come to our shores. Great care has to be taken to sort the good from the bad before common sense leaves the room and valuable plants are banned.

Trade shows are losing ground, no matter what industry they cater to. Trade organizations are also feeling the pinch of the downturn, like we have never seen it before. The extra money we once had available to support our favorite show and organization is needed to keep our individual businesses going. These are the times when we actually need these things the most, yet it's difficult to be able to afford them as we were able to yesterday. Of course they are downsizing, they're also doing much what we're doing and examining their organizations and becoming more innovative. What the future brings for the shows and organizations, only time will tell, but what emerges will be stronger and better.

The green industry has so many intertwined components to it. In the past, it seemed difficult to stay in touch with as many of the groups as possible (nursery and greenhouse growers; contractors; urban foresters; professional lawn care; landscape architects and designers; retail outlets; students; instructors and more). If we could only put the forces of all these groups together in detail, our business would become stronger and possibly less susceptible to some of the outside influences. Technology is growing so fast and offers so many great ways to communicate and to do business. As we (as individuals) become more comfortable with being able to communicate instantly, our world will become smaller (more easily accessible and understood) and hopefully our understanding of others who have chosen this business will grow.

I have noticed (maybe you have, too) that many of my customers have shrunk back to a core of experienced workers (those that have the greatest value to the business). Equipment operation, customer service, quality of work seems to have increased because these higher quality workers are doing more of the work rather than supervising. It seems knowledge and experience has a hard time keeping up with the pace of the growth of a business. This economic slow down offers some of us the time to catch up.

O'Donal As an industry, if we don't stop using codes for official plant names, and don't stop flooding the market with discounted branded plants, we can kiss our industry goodbye.