IGP: Independent Thinking
An interview with Jack HesseJH: We picked out the garden centers, because if you really look at the figures in terms of live plants, that's the biggest conveyor of products. Maybe chain stores get more garden products in total moving through them, but if you look at ornamental plants, the biggest portion goes through garden centers.
Secondly, being upscale, the garden center deals with the upscale consumer, the more knowledgeable consumer. And that consumer is looking for a different shopping experience, which is a broad product line, larger products, different products, service in the store, and a more comfortable buying experience. Whereas for the person going to the chain store, price is very important. The other reason we're concentrated on garden centers is that we think that the way garden centers buy and the way chain stores buy are very, very different. And it's difficult - not impossible, but difficult - to service chain stores with a more limited product line from the same production facility that's dedicated to a broad product line with many, many products of larger size. You also have the issue of not being able to scale up as fast.
GT: Despite the fact that you're focusing on the garden center segment, when IGP talks about its mission or its marketing focus, "consumer product" seems to be the buzzzword.
JH: A steel business wouldn't say "Well, I run a furnace down in the south end of Pittsburgh and the smoke comes up every night." You don't describe it that way. The growing is critical to get the quality, but at the end of the day it's a high-value consumer product, and the value of creating it is in both the growing technique and how it's descrived to the consumer.
I don't think people describe their businesses for what they are. We're very proud to be growers but recognize that we're providers of high-value consumer products.
GT: You've assembled an impressive list of companies that are well known within our industry for their high-quality products. But in addition to getting a consistent high-end product, you also have incredible diversity - from mail-order companies to woody ornamentals to perennials to bulbs. Thompson & Morgan is in England, many of your nurseries are on the West Coast, and you just bought Ridge Manor in Ohio. What's the strategy here?
JH: We've organized our company into five operating groups. In ornamental plants, we're putting together a combination of what we call primary growers and what we call regional growers in partnership. That partnership is evolving very naturally, even if we had never appeared on the scene. It started with the fact that the primary grower is typically in the most optimal climatic zone to produce a particular kind of product, and because of that, also is typically an introducer of products. The regional grower - who has risen in the last 20 yers, growing plants in containers - basically finishes plants. They're high-intensity distrubutors to retail outlets. And interestingly, they tend to specialize in supplying garden centers.
We're acquiring primary growers because they're still in the most optimal region for growing, and we're acquiring regional growers to complement them. And to be able to do a better job - which is one more element in being a value-added supplier - we can supply a retail garden center with multiple product lines at hight frequency and do it all season long. I think that the nursery organization of the future is going to look like that. We just believe this.
GT: But in addition to regional and primary growers, you've also invested in two bulb companies: Langeveld International and Vandenberg Bulb. Why get into bulbs?
JH: Because the bulb business, while it goes to garden centers, is a racked product; it's sold by a different sales force. When we bought [Langeveld] we said, "We have an opportunity to buy a business with a product line, the big portion of which comes in August, September and October into the retail outlet or to the consumer." And we wanted a balance, which brings up a whole strategic aspect of our company. We wanted a balance where all of our products were not peaking in the spring. As much as we like to supply garden centers, one of the things that you recognize immediately in this industry is that you get a huge peak in the spring. We wanted to be able to have products in different pieces of geography in different seasons. We want a lot of stability and balance in it so that if the perennials and annuals don't work so well in May because we have a weather factor, that's one product line in one part of the country. And it's not likely that it'll happen to all product lines in all parts of the country at once.
GT: With Langeveld, you acquired Dutch Gardens, one of the premier flowering bulb catalogs. How does direct marketing fit into IGP's philosophy?
JH: We haven't done this yet, but one of the things we can potentially do that ties a direct-marketing business back to a garden center is to be able to supply products directly on the e-commerce site of a garden center.
GT: And what about supplying growers? Both Langeveld and Skagit Gardens do some business supplying growers. Will that continue?
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