How do we improve the ornamentals supply chain?

BPOA logo_263_275Chairman of the British Protected Ornamentals Association and NFU board for horticulture and potatoes member Ian Riggs gives an overview of the season and thoughts on what can be done to solve ornamental supply chain issues.

The good weather since mid-May has encouraged the great gardening public to tend to their gardens. Ornamental growers have generally reported that the season will end with turnover increasing by 5% or so more than 2012.

However 2012 was not a good year. Who can forget the weather either side of the Olympics - cold and very wet. So the increase, while very welcome, brings to mind the old saying 'twice very little is still very little'.

The ongoing good weather did however enable a release of pent up demand. But as always there is a down side. There is a commonly held belief that once the forecast is both reliable and the weather is consistent, combined with outdoor temperatures exceeding 30 degrees C or so, the garden becomes an asset to enjoy rather than a place to work in.

The garden retail sector enjoyed high visitor numbers looking for garden furniture and BBQs. This increased footfall greatly assisted in driving plant sales well beyond the accepted normal sales period. However, as growers carry out the analysis and start planning for next year, with the backdrop of three years that have not been good for business, early indications are that they looking very closely their programmes for the coming 12 months and it may not be uncommon for production quantities to be less in 2014 than 2013.

Growers will soon be asked to committ to programmes to supply retailers in 2014. With the backdrop of rising production costs, will they be able to negotiate reasonable price increases for these programmes?

The word 'programme' is used loosely and of course does not imply a contract, an order or any commitment to take the stock grown based on the provided figures.

While some individual growers have informed their customers that next year the ‘programme’ will have to include a stronger commitment, the general situation currently looks like it has been in the past – namely that the programme is only an indication of what the retailers may require.

A major garden centre chain buyer was recently quoted as saying they are tired of grower’s whinging on about this and that growers should be more innovative. Other buyers have said that growers do not understand their retail operation and the difficulties and situations they face. If that was the case, the lack of understanding goes both ways when you consider most growers face having to rack up their overdrafts and incur costs sometimes months in advance, to produce a crop the retailer may or may not take.

So how is this perennial situation to be resolved? I suggest dialogue - a frank exchange of views by those interested parties, to create understanding of each other’s position, examination of the options, leading to mutually beneficial agreed guidelines, a roadmap for the future, a Code of Practice if you will, that all parties agree to and sign to abide by.

This could include agreed in advance measures to resolve differences should they arise, possibly even an agreed arbitrator to listen and give rulings. Of course this would not include all trading terms that may continue to be agreed between growers and their customers confidentially. This code could help drive out poor practices, such as the imposition of changes after agreements have been made.

Who better than the NFU to drive this forward, in conjunction with its specialist grower branches and after consultation with all interested parties.

 

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Last edited on: 16:08:2013

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