How Wilson's Garden Center Profits From Edibles
Learn how Ned Wilson of Wilson's Garden Center can make a whopping 80 percent margin on edibles.
December 9, 2011
Wilson’s Garden Center has been well positioned in vegetables and herbs for some time – we used to be produce growers. So when the trend in edibles came along, we just increased our display area a little bit. Like others, we’ve seen edibles sales leap over the past two years. Last year really saw strong growth, and we had a smaller increase this year.
Profit Is A Good Thing In This Economy
Edibles is one category that has grown steadily here. In 2008, herbs, fruits and vegetable plants were 6.8 percent of total sales. In 2011, the same group made up 8.3 percent of estimated total sales. Sales in the category have grown 22.5 percent in those three years while total sales overall are about even.
Edibles have a great profit margin for us. For vegetable plants, we aim for 80 to 85 percent margin. We can get that because we’re growers. So for that margin, we’re measuring the inputs, but we’re not talking about labor or overhead.
For pricing, we generally multiply our costs by five, then go to a good price point from there.
Edibles are definitely a good opportunity for profit while still putting you in line with the box stores, although we aren’t trying to match their prices. People are willing to pay somewhat more in exchange for having the success we can help them with.
Edibles Bring In Younger Customers
A lot of the increase in sales in this category is from the younger generation, the 30-somethings. They seem to really have taken a liking to growing their own food. They can control the chemicals that go into their food, and it’ll be extra fresh. Then there’s the cost saving issue, too. The primary motivation, however, is the freshness and the healthfulness.
Edibles are a good entry point for Gen X and Y to come into the garden center. They can get a feel for what it takes, and they get to eat food they’ve grown.
Teaching Customers Is Vital
There is a greater need for information in edibles than for other areas of the garden center. So you need to have a staff that is familiar with growing a vegetable garden and can pass that experience along.
Customers know you can’t just put the plants in the ground and hope for the best. The younger gardeners especially have a lot of questions. What are you going to grow from seed and how do you do that? How do you prepare the soil? How do you handle insects and disease?
We want them back year after year, so it’s important that they find answers with us. If you take care of them, they’ll trust you. That’s our advantage over the box store. They get personal help and the valuable information they need to be successful.
We haven’t had much success with holding seminars here. People have not been very patient about sitting through classes. Instead, we find they want to be helped when they come in and then be on their way.
They are able to get basic information off the Internet. Then they come in and try to confirm what they learned with us. It’s both a test of the information we give them, as well as a refinement of what they read and didn’t quite understand.
Communicate In Several Ways
We have to convey information on multiple levels, from our staff to our signs. For our tomatoes, we’ll have basic information on the variety sign, plus a handout with all our varieties listed along with their good attributes.
You can’t just go with one thing. If we just relied on oral communication, we’d miss a lot of people. There are some customers who do not want to talk to you; they want to get the information themselves.
Organic Is Growing In Importance
We’re in a more rural area, farm country, so organic gardening is not a big issue for us. But it’s still an issue.
Our current customers do not have a complete commitment to organics, but they want to know that our plants, especially the edibles, are safe to buy. We get some questions about how we grow our vegetables and herbs. While we’re not organic at this point, we don’t use soluble fertilizers. We use Daniels Plant Food instead, and we use as few chemicals as possible.
I think there is a hardcore group that is confrontational about that issue. Then there is the great mass that wants to be sure their food is safe to eat and that they’re not putting chemicals in their kids’ bodies – or in their own.
But the issue will stay around. It’s more of a young person issue. As time goes along, the younger generation will dominate more of the market.
New Varieties Can Be A Challenge To Sell
Some varieties are better known for having a higher yield and disease resistance. But taste is the most important factor from a customer’s viewpoint. Heirloom varieties are hot again, mainly because of the flavor, although they don’t produce as much and are not as pest resistant as newer varieties.
We find it usually takes a while for a new vegetable variety to catch on. People will listen to fellow gardeners about the success they’ve had with a new type of tomato, for example, but it can be difficult to get them to try something new. Customers tend to stick with things they have experience with.
We try different things to get them to experiment a little. We encourage them to try something new along with their favorites this year. Sometimes we’ll offer a variety they can try out for free, especially if they are buying several other things.
What Works For Us
We carry a lot of different crops and varieties, but it’s been important to find the balance and put the most effort into what will sell the most. Being in the business a long time, we’ve established niches for varieties that aren’t extremely popular overall. We just need to be realistic and hit those varieties in a lighter manner.
One of the things we think has helped us is having a wide selection. It’s a draw if we have 60-plus varieties of tomatoes, 60-plus peppers and four or five broccolis. And when people see that and don’t know where to start, that’s where our staff comes in handy.
Square-foot gardening has been increasingly popular for us at Wilson’s. You don’t get as much yield, but it’s a lot easier for the customer because it takes minimal space and the customer gets a decent harvest off of it. The quarter-acre garden is a thing of the past. Containers are popular too, but you need to keep them moist enough to not damage the fruit.
Plans For 2012
We are going to maintain the same level we did this year with edibles. The market is still there, but we don’t think there is as much room for growth.
We’re getting into the Burpee brand a little more. Those have been doing well for us. They are associated with quality and the types of edibles we sell match up well with their categories
We also have a branded pot we use for many of our other edible varieties – “Homegrown and Healthy” – that helps differentiate us from other plant sources. It helps position us as the local person with great plants.