IGP: Independent Thinking
An interview with Jack HesseJH: We have five primary groups - horticultural specialties, which are bulbs and seeds; ornamental plants, which include both woody plants and annuals; ground covers; a head of direct marketing; an overseas business; and a business serving growers, which is part of horticultural specialties. The heads of those businesses are responsible for the profit or loss of those businesses. We depend on them to deliver against the business plan, a production plan, a sales unit plan, and projected revenues and profits, and to manage their assets. And we have a nice balance because we haven't moved the responsibility for those functions to our Boston headquarters.
GT: With only 12 people working in the Boston office and 9 companies in multiple locations, do you see a lot of growth happening here in Boston, or will the balance remain outside?
While IGP may still be busy acquiring companies, they're also hard at work fitting the pieces of their new puzzle together more >
JH: We're not trying to build a large central headquarters. We're trying to build a group of experts. Maybe we'll get up to 15, 16, 17 or 18, and I think we could run a company two to three times this size that way, because the general managers out there are responsible for the profits.
GT: What do you see as the optimal size for IGP?
JH: It will get to be a certain size just because of the strategy, not because of a dollar goal. I would say the focus of acquisitions in the company are in an area that I would call the expanded Northeast quadrant of the United States ... an area that extends from Minnesota down into the Plains and all the way across into North Carolina. ... That's the biggest concentration of garden centers in the country.
GT: What's your plan for expansion in that area?
With acquisitions of companies like Skagit Gardens. IGP has quickly earned a reputation for dealing with top-notch operations.JH: Our plan is to acquire different companies in that geography, which will include regional growers, who deliver within 300 or 400 miles, and a couple of primary growers who are strategically located more in the southern regions - because that's where they're the best located growers for certain product lines. These are really basically woody plant growers. We're going to be well north of $100 million in sales of complementary products and regional distribution in this area.
The second thing we'll look at is growers of annuals and perennials, which tends to be a separate production world. Other than Skagit Gardens we haven't bought additional growers of annuals and perennials - it's just the way things have evolved over time.
We're at approximately $170 million now - I think that we could easily grow 50 to 60 percent in that region, so we could easily get into the $250 to $300 million range if we complete what we'd like to do in the region. It depends on what we do in annuals and perennials.
The third part would be companies that take us into new geography. You never know in the business we're in, whether someone in a new geography steps up with something that's very interesting ... It causes you to go and address that as a potential acquisition.
Jennifer Duffield White is associate editor of GrowerTalks.
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