A Market in Bloom

Apr 01, 2001 9:30 PM  By

The overall gardening products market has grown nearly 50% between 1996 and 1999

Between 1996 and 1998, according to the NGA, the number of households participating in lawn and garden activities increased about 2%, from 101.4 million to 103.5 million

In 1996, mail order accounted for 9.2% of all gardening merchandise sales; by 1998, the mail order market share had dropped to 7.0%

The garden market is growing like a weed. The past few years have seen a steady rise in the sales of seeds, plants, gardening tools, and the like among catalogers and brick-and-mortar stores. Even catalogers that aren’t strictly within the gardening niche, such as Martha by Mail, now offer a plethora of potting benches and lawn ornaments. This month, Catalog Age puts on its wellies and digs into this increasingly fertile market sector.

According to the most recent National Gardening Survey of the National Gardening Association (NGA), 1999 gardening sales among all channels were $33.52 billion, an increase of 11% from $30.19 billion in 1998, and up nearly 50% from just $22.52 billion in 1996. As of press time, the figures for 2000 had yet to be released.

The NGA does not break out the total mail order sales from overall market sales. But the Columbia, MD-based Mailorder Gardening Association (MGA) determined from the NGA’s survey that mail order accounted for approximately $2.10 billion of gardening merchandise sales in 1998, an increase of just 1% from $2.08 billion in 1996. Such figures indicate that while mail order accounted for 9.2% of all gardening sales in 1996, by 1998 it accounted for just 7.0% of gardening sales.

The very nature of direct marketing could account for some of the channel’s drop in market share. “People want to be able to touch and see the product before buying it,” says Bruce Butterfield, research director of the Burlington, VT-based NGA.

Indeed, among the survey respondents who did not buy gardening merchandise by catalog in 1998, 19% cited the inability to examine the products before purchase as the major deterrent. But that doesn’t offer a full explanation when you consider that 26% of respondents gave the same answer in 1996, when mail order accounted for a larger share of total gardening sales.

Challenges a-plenty

The MGA does not break out online sales from mail order sales. But the growth of e-commerce poses a challenge to gardening catalogers. Butterfield says many consumers are using the Web to research — but not buy — merchandise.

“Before the Internet, gardeners would get their product and product information by mail order or at the local nursery or seed store,” Butterfield says. “Now one unintended consequence of the Internet is that some people are going to the Web, downloading information about certain plants or seeds, and marching over to their local stores for it.” While they could have just as easily done this with a print catalog, the Internet provides gardeners with a greater breadth of information.

The expansion into gardening by “big box” retailers, such as Lowe’s and Home Depot, poses another challenge to catalogers. “Big-box stores have aggressively gone after the garden business,” Butterfield says. “This has challenged nurseries and catalogs to differentiate themselves.”

To compete with the big boxes, catalogers are now going after younger, less experienced gardeners whereas before, “many gardening catalogs catered to serious gardeners,” Butterfield says. To do so, catalogers are providing detailed how-to copy and glossaries of terms, among other editorial features, both in their print books and online. And because younger gardeners prefer plants to seeds, many are modifying their merchandise mix to reflect that preference.

But such changes in editorial and merchandise present yet another challenge to marketers: how to avoid alienating their customer base of experienced gardeners while still reaching out to neophytes.

PLAYER PROFILES
W. Atlee Burpee & Co.

Founded: 1876

Located: Warminster, PA

Catalogs: Burpee, Heronswood, Benchsmith

Circulation: About 4 million

This past year has been a busy one for W. Atlee Burpee. The Warminster, PA-based cataloger acquired the assets of defunct garden e-tailer Garden.com in January. And in June 2000, the company acquired Heronswood Nursery, a Kingston, WA-based cataloger of rare trees, plants, and shrubbery. (Terms were not disclosed for either deal.)

Like many other players in the gardening segment, Burpee is a hybrid mailer, marketing to both businesses and consumers. “We were founded in 1876 and launched into wholesale 25 years later,” says president George Ball. “Our wholesale business sells to retail stores including Home Depot, Kmart, and mom-and-pop garden centers.” The company’s consumer catalogs, Website, and four stores round out the business.

Burpee’s buyers have changed during the past 10-15 years. “We’re now seeing more women buyers, younger buyers, and more affluent buyers than in the past,” Ball says. “We’re also seeing a broader, more diverse range [of income and age] among our older buyers.” Ball says that many new customers were the result of a booming economy, which enabled people to buy houses with yards that needed landscaping and maintenance. But he points out that an economic slowdown would still be good for business, because rather than buying bigger and better homes, many people would instead look to upgrade their existing property.

What’s more, “the Hispanic market has really exploded,” Ball says. To meet the demand, Burpee has produced its first bilingual seed packet. “We even changed the seed packaging to include tropical colors that might appeal to our Hispanic buyers.” The bilingual seed program is successful among Burpee’s Hispanic buyers (though Ball won’t cite response rates), but “we haven’t made the catalog bilingual yet, and we may never, because we aren’t sure how this will work,” he says. “We have to test our way into it.”

The company’s Website is a key component of its customer service efforts. Not only does it provide customers with an alternate means of contacting Burpee, but it also sells additional product and offers a wealth of information resources, including the Garden Wizard (to help new gardeners determine which plants would work best for them), the Burpee Garden School (online lessons about plants and plant care), and an archive of service articles. Nonetheless, says Ball, “our core business is still our print-and-paper component.”

To make gardening appealing, Ball says it’s important to apply core direct marketing principles: “You can’t treat a mass audience as such. You have to do one-to-one marketing,” which includes keeping the lines of communication open with buyers via a Website and call centers, and providing good customer service. “Gardening customers can be demanding,” he says. “We have buyers who spend as little as $35 or $40 in a year, and they’ll send us letters charting the seeds’ germination rates.”

Americans consider their number-one hobby to be gardening, “but that’s if you include mowing the lawn,” Ball says. Getting U.S. consumers interested in the deeper art of gardening is a challenge. “Our goal is to make gardening appealing, to demystify it and be honest with people about what it takes to garden,” he says. “You have to be forthright and truthful that gardening is a working hobby — that it starts with digging a hole.”

Foster & Gallagher

Founded: By Spring Hill Nurseries, mainstay of F&G’s Horticulture Group, in 1859

Located: Peoria, IL

House file: 5.3 million

Gross sales (1999): $340 million (includes nongardening merchandise from the gifts and children’s products catalogs)

Foster & Gallagher (F&G) is no seedling cataloger. The Peoria, IL-based mailer of horticulture and gifts products has a circulation of more than 300 million, including catalogs and other direct mail pieces, and has a house file of more than 5.3 million buyers. In 1999 (the most recent year for which sales were available at press time), the company raked in gross sales of $340 million.

The company consists of four marketing groups: the Children’s Group, which sells toys through the catalogs HearthSong, Learn & Play, and Magic Cabin Dolls; the Gift Group, which sells home and gift products in the catalogs Walter Drake and The Home Marketplace; E-commerce, which maintains the company’s seven Websites; and the Horticulture Group, which includes gardening products catalogs from the Spring Hill, Michigan Bulb and Gurney’s groups. The company has more than 4,000 employees and more than 600 acres of field production plus 18 acres of greenhouse production in the U.S. and Canada.

The Spring Hill Group is the company’s cornerstone horticulture group and includes the perennial catalog Spring Hill Nurseries (established in 1859), Spring Hill Select Antique Roses, bulb catalog Breck’s, fruit trees mailer Stark Bros. Nurseries, New Holland Bulb Co., and The Vermont Wildflower Farm. In addition, the group sells horticulture products in Canada through its Breck’s of Canada catalog. The Horticulture Group’s Website, www.MySeasons.com, launched in April 1998. And in 1999, F&G established MySeasons.com as a separate company with its own management team, to leverage the F&G brands.

Amount of Money Spent for Mail Order Gardening Merchandise
1996 1998
Avg. spent per household $142.20 $140.00
# of households ordering 14.6 million 15 million
Total spent by mail order $2.076 billion $2.100 billion
Increase from 1996-1998 $24 million (or 1.1%)
Source: Mallorder Gardening Association

The company strengthened its foothold in the gardening catalog business in 1999, when it acquired Gurney’s Seed and Nursery Co. and Henry Field’s Seed and Nursery Co. “These horticulture titles include product lines that we didn’t sell, such as seeds, hard goods, trees, shrubs, and hedges,” says David Grim, president of F&G’s Spring Hill Group.

The Internet is an important source of sales for F&G. “About 20% of our seed buyers purchase on the Web, because they can quickly scroll through thousands of SKUs,” Grim says. “And our Internet customers buy about 15 items per order, whereas our regular catalog business generates about seven or eight items per order.” The average order from MySeasons.com is as much as 20% higher than the typical catalog order.

While the Web has contributed to F&G’s top line, rising postage and labor costs threaten to eat into the bottom line. “We decreased our circulation this year by about 5% due to the postage increase,” Grim says. Worse yet, “the U.S. Postal Service put a surcharge on longer packages, which affects items such as our trees that are about 35″ or so.”

As for labor, many catalogers share F&G’s troubles finding and keeping employees. Good help is hard to find, and F&G needs a considerable amount of help. “We need up to 800 employees — primarily pickers, packers, and shippers — during the busy spring season around March,” Grim says, adding that it has been more difficult to find seasonal help. But the company is hoping that the recent economic downturn will ease its seasonal labor woes.

Grim concedes that big-box stores have aggressively gone after the garden market. But he isn’t convinced that they’ll usurp gardening catalogers’ business. “They are the largest retailers of horticulture products in general, but we are the most active competition for them in the bulbs category,” he explains. “They treat bulbs more like a commodity or an impulse item and sell them at the checkout registers.” And unlike the big-box stores, he adds, “we drive service and lifetime guarantee on all horticulture products, such as roses and other perishable items.”

Grim also takes a sanguine view of gifts and home goods catalogers’ forays into selling gardening accessories and tools: “I think it both reflects and creates the demand for garden products.”

He does wonder, though, how viable the gardening accessories category will be for some catalogers confronted with an economic downturn. “Some catalogs sell upscale products, such as a $200 bench or an $80 pot, and I don’t know how many can survive in that market,” because they’re nonessential items. On the other hand, Grim says he’s not surprised that more catalogers haven’t jumped into the business of selling plants, seeds, and flowers. “The nature of horticulture product sets a high barrier to entry,” he says. “It requires expertise and facilities such as farms and nurseries.” Many catalogers aren’t willing to take the risk of such an investment — which isn’t a bad thing for longtime gardening catalogers such as F&G.

Jackson & Perkins

Founded: 1872

Located: Medford, OR (part of Bear Creek Corp.)

Catalogs: Jackson & Perkins, Jackson & Perkins New Roses

Circulation: 6.3 million

The catalog business of Jackson & Perkins (J&P) began by accident. After launching its wholesale business in 1872, the company hosted a garden display at the 1939 World’s Fair in New York. The display generated sales from a number of people who, rather than carry the plants home with them, asked to have their orders mailed to them. The following season, the same customers simply submitted more orders for plants by mail, and hence the company’s catalog business was born.

Today J&P’s catalog and full-service nursery are part of the Bear Creek Corp., also home to food gifts catalog Harry and David and gifts catalog Northwest Express. Each year the company ships more than 3 million roses and other plants and mails more than 6 million catalogs.

J&P launched its Website in August 1997. “Our Website sales are slightly softer than our catalog orders,” says Cathy Fultineer, senior vice president/general manager of catalogs for Harry and David and Jackson & Perkins. She won’t cite specifics other than to say that Website orders average around $100.

“At this point, our customers still prefer to shop from the catalog than from the Web, possibly because people can more leisurely browse through a catalog,” Fultineer says. “And we often see more items per order from catalog customers vs. online orders, which could be because people are not quite as used to browsing online, where they typically see only one product per screen at a time.”

J&P publishes 14 editions a year, Fultineer says, with the biggest drops in winter as customers prepare for spring planting. And although J&P is best known for its roses, “we also have a strong perennial and bulb business,” she says. “And we’re in a strong position when it comes to gift plants and garden tools, accessories, and furniture, which we sell in our Home Book.”

In fact, Fultineer says that the majority of J&P’s growth will come from home product and gift plants sales. “In general, the rose and perennial business has shifted somewhat from the catalog industry to the retail home centers. But we catalogers who propagate our own exclusive plant varieties not available anywhere else still have a strong niche,” she says. And J&P plans to continue to market its exclusive lines: “The wholesale division has some varieties that sell specifically to wholesale, but the catalog has extensive, exclusive lines.”

J&P’s rose business in particular is seeing new buyers. “Because we are launching new roses, we’re seeing customers who are younger, who might have recently purchased a home, and who want to plant a rose garden,” Fultineer says. “In the past, roses were favored by an older age group.” This might have been because people thought they needed a lot of time — which retirees have — to care for a rose garden, “but that’s not true,” she adds. And the new buyers tend to purchase online, while older buyers do not. “Younger customers might be a little more comfortable with the Internet,” she says.

Since J&P’s wholesale business sells to the big-box retail stores, one challenge the company faces is avoiding channel conflict. To support the company’s consumer business, “we must maintain superior quality and exclusive merchandise assortments in our catalog business,” Fultineer says.

The immediate gratification that brick-and-mortar stores offer to customers can also present challenges to gardening catalogs. “Gardening is not always a planned event for people,” especially not for the amateur gardener, she says. “People tend to think, ‘I’ve got time to garden today, so I’ll run out to the store.’” To appeal to some of the neophyte gardeners’ desire for instant gratification, J&P plans to introduce a cut-flower gift program in its spring catalog. It will also debut several gift plants.

Above all, Fultineer says, customer service is critical to J&P’s success. The catalogs provide diagrams for suggested garden layouts, as well as bulb and plant variety suggestions based on what region of the country buyers live in. And the company’s 60-day guarantee on horticulture products and unlimited guarantee on nonhorticulture products have no doubt encouraged many an aspiring green thumb to place an order. “Customers need to know that we stand behind our product,” she says.

Gardening Conferences and Shows, 2001

APRIL 5-8
SPRING HOME & GARDEN SHOW
Novi Expo Center, Novi, MI
Contact: Rosalie Lamb, 248-737-4477

APRIL 7-8
NEW ORLEANS SPRING GARDEN SHOW
Botanical Garden in New Orleans City Park, New Orleans
Contact: Johnny Morgan, 225-578-8484

APRIL 9-10
GREAT GARDEN SYMPOSIUM
University of Nebraska-Lincoln City Campus Union, Lincoln, NE
Contact: Kate Schumacher, 402-472-2212

OCTOBER 12-13
13TH ANNUAL HERB HARVEST FALL FESTIVAL
Ozark Folk Center, Mountain View, AR
Contact: Tina Marie Wilcox, 870-269-3851

OCTOBER 19-21
ORCHID SHOW
Tower Hill Botanic Garden, Boylston, MA
Contact: Karen Probst, 508-869-6111 ext. 20

Source: National Gardening Association