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Nursery Sales and Closures


I've been asked about nursery sales and the failure of two largish perennial nurseries in Ontario (Epic and JEA) - with a combined production total of (I'm guessing here) around 6 million pots per year (give or take a million or two).

And the gardener wanted to know why it happened who was going to take up the slack.

I can guess the folks at Heritage Perennials (the surviving large Ontario perennial grower) are rubbing their hands with glee and are filling the fields and cold frames with as many pots as the place will hold.  (I'm a little biased here as I spent three years as the Territory Manager for the Eastern U.S. for Heritage a few years ago.)

Epic also sold into the northern U.S. (mostly NY I understand) but the US market will have no trouble filling in as there are many very aggressive perennial nurseries there.

You have to understand there are two distinct marketing channels for plants. We have the independent garden centers and the box stores/mass merchants.

Epic supplied a lot of the mass merchants (e.g. Loblaws) with plants. Many of the rest (Canadian Tire/Rona) are supplied from Quebec.  My guess is that the Quebec growers will pick up the slack for the mass merchants.  Heritage doesn't sell to the mass merchants/box stores at all, only selling to the independent garden centers.

Or....  given the almost-equality of the US dollar/Canadian dollar - there are some well placed US nurseries that could easily expand into Canada.  I'm not sure if they'd be interested, but it could be done.  Bet on Quebec.

The independents are in a bit of a crunch. They're going to have to deal with Quebec or Heritage for the bulk of their plants.  There are a few very small regional nurseries that produce a few plants but these will not be able to come close to filling the market need.  Some of the bigger woody nurseries (Connon, Sheridan) also produce some of their own perennials (and sell some to their wholesale customers) but again depend on the specialist finishing nurseries like Heritage for their specialist needs.

So bet on Heritage having a bumper year next year.  I hope the shipping crew is ready for this one.

So why did it happen?

Well folks.  The nursery business is like any other. It's a competitive industry and there is only so much room here in Ontario. A limited market and several horrendous retail seasons in a row play havoc on those who are operating on low profit/margins.  When you have freezing cold weather on the weekends, plant sales suffer.  With some big box stores only paying growers when the product is sold (the grower gets to take the unsold or dead product home) margins are slim.  Combine the two and you have a problem.  Throw in a competitive environment and a few other management decisions and the story is "wrote".

Is there room for two larger nurseries in the province?  For sure.  But it will take sound business decision-making and great plantsmanship to grow one to competitive levels.  (And that combination seldom -if ever- really comes in the same person) ;-)

I note that this situation happens in the U.S. as well.  At a perennial meeting a few years ago, I recall talking to the owner of one of the oldest and largest perennial nurseries in the U.S.  He said that 30 years ago, he could count the number of competitors on one hand - maybe two hands if pushed.  He figured he had over 300 at thr time we chatted.  Nurseries go up - and nurseries go down.  Big garden centers - features of their communities - disappear.

Experienced gardeners want the unusual -the new. But there is precious little money in that side of things because that market is so small.  The money is in the production of the common plants that can be mass produced in tissue culture labs - by the hundreds of thousands - and only spend a short time in the finishing nurseries before being shipped to market. I'd guess and say that 300 varieties probably account for 80-85% of total sales in the nursery industry - and that would include perennials, annuals, trees etc. in that 300.

I know that some gardeners (and particularly garden writers) can't believe that folks don't want the unusual plants or don't want to take the time to really garden but the fact of the matter is that "real" gardeners are a very small part of the sales mix. The vast majority of homeowners aren't and don't want to be serious gardeners.  They're quite happy with a perennial or two tucked into the foundation planting and don't really care if it's the latest and greatest. 

I mean think about it for a minute.  How many varieties do even serious gardeners have in their gardens - over 300? Go out and count your own.  Most don't.  So the vast majority of gardeners can be served quite nicely from the large merchants.

So...

You know that the mass merchants aren't going to carry the latest and greatest - that's not what they do.  Mass merchants give you the absolute best price on 300 varieties. That's their function.

Independents do the 300 as well but they often also carry the latest and greatest and unusual. That's what independents do and that's how they survive against the predatory pricing of the big guys.


Every time you as a serious gardener shop at a Home Depot or Loblaws, you help kill off a specialist nursery like JEA.  Every time you shop at Walmart or Rona because of the price, you put another nail in the business plan of a locally owned garden center - the person who's likely to find that unusual plant just for you.

Gardeners like you made this decision in the bigger scheme of things and that's why it happened.  It's your call.


 

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