A Small Grower Talks Contract Growing

The contract growing session I attended this afternoon was well designed, with two big growers (Tom Smith, Four Star Greenhouses and George Lucas, Lucas Greenhouses) paired with two smaller growers (Joseph Boarini, Boarini Horticulture Services LLC and John Whalen, Whalen's Greenhouses) to discuss the matter of building relationships.

Whalen, a 31-year-old grower whose operation is located in Toughkenamon, Pa., had some of the most interesting insights. His sentiment about big box retailers, to me, was the most interesting of the session: "The realization is you're not supplying Home Depot. You're supplying the grower. Home Depot is not paying you. Another grower is."

Whalen had a hard time adjusting to the notion his plants were ultimately being shipped to a home improvement chain like Home Depot. He admits he had to get over the fact he was supporting big box stores, though, because contracting growing for growers who serve home improvement chains and other large retailers is a big opportunity. Plus, he says small grower opportunities are fading.

Like all grower-customer relationships, contract growing has its pros and cons.

"The big growers we supply pay well and pay quickly," he says. "Drivers get a check when they leave. The big growers also leave the growing to us.

But, on the down side ...

"Big growers want to get rid of their material first," Whalen says. "You might have great [material], but the grower you're working with may already have what you have. Then there's no need."

Whalen says three growers in his area not contract growing went out of business over the last couple years. One of those growers was in business for 40 years.

Four Star's Tom Smith On Contract Growing

Tom Smith, president of Four Star Greenhouses in Carleton, Mich., was one of four growers on a panel Saturday discussing how others can make contract growing relationships work for them.

Four Star, of course, is one of three Proven Winners propagators in the United States. As Proven Winners grew over the years, the greenhouse operation didn't have the labor to keep up with demand for Proven Winners. That's when Smith turned to other growers.

"We'd probably need more than 200 people if we didn't have off-sites," says Smith, who first hired contract growers 12 years ago. "Capital expenses and labor expenses are the two reasons we use contract growers."

Contract growing can be beneficial for many reasons, including when natural disasters strike. Smith explained how a tornado once struck one of Four Star's growing ranges, shattering glass into thousands of Proven Winners trays. The tornado could have doomed Four Star, but having contract growing relationships in place allowed the operation to acquire the necessary product and ship 98 percent of it on time in the days after the disaster.

In Four Star contract growing relationships, the growers it contracts buy trays, use the soil and crop protection products of their choice, as well as thier own labor force for sticking, pinching and other tasks.

Four Star, on the other hand, is in charge of the following:

• Testing at labs
• Unrooted cuttings: "We're paying for them for a service to root the product for us," Smith says. • Labels
• Action plans: "Even though the other grower is a specialist, we'll use them in our peak weeks. We use our sites the rest of the time so we are always familiar with the crops we're growing."

A Gentlemen's Agreement

A great session at Short Course focused on contract growing, and paired two large operations with two smaller operations that supply them. All four growers on the panel agreed that a good relationship and communication between all the players is key.

Bobby Barnitz describes the arrangement his operation has selling plugs to Gary Mangum’s Bell Nursery as a gentlemen’s agreement. With Mangum’s network of family growers, the relationship is a bit more formalized, and he says he has a commitment to take product from these growers no matter the situation. With growers like Barnitz, though, Mangum says he expects growers to work with Bell to get plants to market.

Once they are to market, Mangum makes sure they sell. Bell nursery invests $7 million per year in personnel in the 180 Home Depot stores the operation supplies, taking care of plants and answering questions.

Heartland Growers has started using a contract system because it’s seen more growth than in can handle in its current facilities. Its contract grower, Crossroads Greenhouse, helps the operation meet customer demands, and can focus on its niche of blooming potted crops. Nick Gapinski of Heartland says the relationship between the two operations is a casual back and forth.

“If you grow it, we’ll take it,” he said.