Rosier Outlook for the Gardening Market

It would seem that these are not the best of times for gardening catalogers. For starters, increasing competition from big-box retailers such as Wal-Mart, Lowe’s, and Home Depot has been putting the squeeze on small specialty mailers in recent years.

Then there’s waning interest in gardening from seed in favor of planting existing shrubs — which are handily available at the aforementioned stores. Add to that the highly publicized demise of multititle horticultural marketer Foster & Gallagher (F&G), which filed for Chapter 11 this past July, followed by Warminster, PA-based venerable seed cataloger W. Atlee Burpee & Co.’s filing for Chapter 11 bankruptcy protection in September, and it would seem that the gardening catalog market is in danger of drying up.

Guess again. For one, instead of going under, Burpee quietly emerged from Chapter 11 just four months after it filed. Also, spring 2002 issues of several F&G titles, including Gurney’s, Henry Field’s, Spring Hill Nurseries, Michigan Bulb, and Breck’s, mailed under their new owner, Lawrenceburg, IN-based Gardens Alive! (Stark Bros. was also included in the F&G assets that Gardens Alive! purchased, but the catalog was subsequently sold to an investor group based in Louisiana, MO, which mailed a Stark Bros. catalog in late December.)

Perhaps most significant, the horticultural products catalogers contacted say that so far, they’re having a good year — something few would have expected going into 2002.

At the January meeting of the Alkridge, MD-based Mailorder Gardening Association, “members were real nervous about spring,” says Jim Zuckermandel, president of Edmond, OK-based mail order consultancy Zed Marketing Group, which works with several gardening catalog clients. “But I’ve been hearing that numbers are up across the board, with increases of 10%-20%.”

Jung Seed Co. reports an 11% increase in spring sales, says president Richard Zondag, even though the Randolph, WI-based mailer cut circulation 7%. “We’ve had two so-so years, so it’s about time we’ve had a good year,” he says. Greenwood, SC-based Park Seed’s spring sales are up about 10% on a “slight” circulation increase, says president/CEO Karen Park Jennings.

At Litchfield, CT-based White Flower Farm, “we’ve had a slow start, but things are adequate, with a chance to be wonderfully delirious,” says owner Eliot Wadsworth. Gardening hard-goods cataloger Gardener’s Supply Co., based in Burlington, VT, is slightly ahead of plan, “and that wasn’t the case this time last year,” says president Jim Feinson.

As of early April, the catalogers contacted still had another month or two left in their spring selling cycle, so the strong start was a good sign. Last year, when many mailers’ sales were down as of April 1, “they knew they wouldn’t get enough business for the season to make up for the shortfall,” says Zuckermandel.

Why the turnaround?

As to why gardening catalogers are doing well now, some say it’s for many of the same reasons that other catalogers blamed for soft sales during the past few quarters: the recession and the Sept. 11 aftermath.

Historically, says Zuckermandel, “when the economy is struggling, gardening products sales tend to pick up,” as consumers typically travel less and focus on fixing up the homes and yards. The Sept. 11 terrorist attacks made the grim economy worse for many and further fueled the interest in home and family.

Some even cite F&G’s downfall with indirectly boosting business by creating pent-up demand. “When F&G went bankrupt, we learned that the catalog brands it owned had a tremendous value in the marketplace,” says Bruce Butterfield, president of National Gardening Association (NGA). “Gardeners didn’t want the Gurney’s, Henry Field’s, or Spring Hill Nurseries catalogs to disappear. It was like a death in the family. So when the spring 2002 editions of these catalogs started arriving in mailboxes, gardeners were overjoyed.”

That’s not to say that other mailers didn’t suffer from F&G’s bankruptcy. Any time a major player like that goes under, it’s bad for the entire industry, says Park Seed’s Jennings. “It’s a snowball effect when a company is faltering,” particularly if the result to the customer is poor service and unfilled orders, she says.

Jung Seed Co. had trouble securing financing last fall because the F&G situation made its bank nervous, says Zondag. “The banks were a little a skittish with our line of credit, especially after they saw what happened to Gurney’s and Henry Field’s.” In fact, Zondag blames Jung’s reduced spring catalog circulation on F&G, partly because he didn’t have the financing to rent more names, and partly because with the F&G books out of commission, there weren’t enough names to rent.

“We didn’t have any of their names in our lists this spring,” Zondag says. “And Gurney’s was a good list for us, because we had similar demographics.” To compensate for the lack of available names, Zondag says Jung, which mails nine titles, will have to rely in part on compiled lists.

For certain, “F&G housed an incredible database of names that were exchanged throughout the industry,” says Zuckermandel, names that mailers have had to get along without for nearly a year.

“F&G performed a valuable function for other catalogers by bringing new names to the market,” agrees NGA’s Butterfield. “Others are going to have to make a serious effort to convert baby boomers to mail order [gardening products] buyers.”

Further afield

Given the declining number of new names, the onslaught of retail competition, and the rise in distribution costs such as postage, gardening catalogers have a tough row to hoe. Even though many catalogers are doing better than expected this year, Zuckermandel points out that most mailers went into the year with low expectations and revised projections. He also notes that gardening catalogs are often run by horticulturists, not marketers. “Most people in the gardening catalog business are in it for the passion — not to be millionaires.”

But it’s the owner’s or founder’s passion that keeps gardening books full of new products and offering expert advice and service — a considerable edge over mass market retailers. Many catalogers already have the gardening expertise; savvy marketers are investing in technology to further improve service levels.

Park Seed, for instance, two years ago invested in a new computer system (CommercialWare’s Mozart on an IBM platform) to provide better service, get the orders out quicker, and ship products more efficiently, says Jennings. “We’ve also redone our inventory control and hired new people and it’s paying off. We’re better able to fill orders fill seed orders in 24 hours, whereas it used be 48 hours and more.”

As for merchandising, many of the catalog companies doing well now “are filling niche markets that large retailers can’t profitably serve,” says Randy Schultz, spokesperson for the Mailorder Gardening Association. One of these is High Country Gardens, says Shultz.

The Sante Fe, NM-based mailer, a subsidiary of Sante Fe Greenhouses, had strong spring sales as of early April, though marketing director Ava Salman would not provide specific numbers. The cataloger increased circulation about 15%, which much of that circulation going to requesters, and increased capacity so it could handle more orders.

The cause for High Country Gardens’ surge in business? The cataloger specializes in drought-resistant plants, and much of the Northeast is now facing a drought. “There’s a lot more interest in our style of gardening,” Salman says, adding that consumers can grow plants with less moisture and fewer chemicals.

Others agree that gardening mailers should play up merchandising strengths. “Instead of the same three varieties of tomato plants that you find in the big-box retailers, the best catalogs offer a dozen or more choices that include seeds and plants of new hybrid varieties and heirloom varieties,” says Butterfield. As for customer service, he adds, “I defy you to go into a Home Depot store and get a clerk to advise you on which varieties of plants will do best in the microclimates of your backyard.”

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