Independent consultant, Neville Stein explores the potential for Irish plant exports in the context of rising UK demand and grower interest.
Bord Bia has been working closely with UK based horticultural business consultant Neville Stein to develop export opportunities for Irish growers in the UK. Here Neville discusses the progress and reviews the current opportunities.
There has always been a long history of Irish nursery stock producers exporting to the UK. However, the importance of exports to the sector was fully embraced in 2000 when Bord Glas created the Export Development programme. Early initiatives included sales training workshops and escorted study tours to the UK which helped raise the profile of Irish nursery stock amongst potential customers in the UK. This profile was further enhanced with Bord Bia organising generic stands at the major trade shows in the UK, most notably at GLEE.
Since the global financial crisis in 2008 which had a serious negative impact on the sector, the programme has sought to offer a more tailored approach to individual nursery owners who wish to export. The new format developed in 2010 (which has also been promoted to those operating in the narcissi market), involves Gary Graham and me hosting short but focused hour-long meetings with individual producers, the purpose of which is to offer practical advice and guidance and to explore what assistance can be provided through the programme to facilitate the development of new business in the UK and beyond.
Since developing this new approach, over 40 nurseries have attended the annual round of meetings in the Killeshin Hotel, Portlaoise and typically each year the available hour-long slots with us are a sell-out. Not restricted just to the hardy nursery stock sector, these short consultancy sessions are available to anyone from the wider horticultural sector who wishes to export. In addition to collecting important data on the value of exports from Ireland, these meetings provide an opportunity for participants to benefit from a bespoke action plan, developed for their specific needs.
But my role in the export programme is not just confined to these annual meetings. Throughout the year I am available to offer practical guidance and support, and typically this involves providing up to date market information, targeted customer lists, personal introductions and advice on sales and marketing techniques. In some instances I have even accompanied nursery operators on a sales trip – this ‘door opening’ service has proved invaluable in developing relationships with UK buyers.
Well, what has the export programme achieved? Since developing the new format we have provided mentoring to 43 nurseries, 14 of which are recognised as the first time exporters. Over 50 new customers in the UK and beyond have been secured by those who have actively participated in the programme – and several participants would now acknowledge that the export market forms a significant part of their marketing mix – without it, growth in turnover would not have been achieved.
So what have we learned from the export programme? Anyone who has spent time trying to open up a new market for their products will know that market development can be a slow process requiring a lot of legwork developing and building relationships. There are no quick fixes, and if you are interested in exporting, you need to take a long view, be serious about the process and commit to making it work. But after five years we have at least 75% of those who attended the annual export meetings now selling stock to the UK and beyond on a regular basis.
“Since developing the new format we have provided mentoring to 43 nurseries, 14 of which are recognised as first-time exporters”
We have also seen that despite a recent improvement in the domestic market many ambitious growers will reach a natural ceiling to their sales if they do not export – as we all know the domestic market is relatively small, very few new garden centres are being built and whilst the landscape market is making a slow recovery the supply of plants to this market remains intensely competitive. So to grow turnover perhaps exports do need to be considered? But if exporting was a quick easy fix, everyone would be doing it.
Some significant challenges remain, notably developing a cost-effective and efficient supply route to the UK market. Dispatch costs can, of course, be mitigated slightly by selling unique and differentiated products which typically achieve a higher price in the market. Likewise, dispatch costs can also be reduced by aggregating loads with other exports, enabling growers to share the cost.
We know that the UK market provides some significant opportunities. Whilst the UK garden market is not completely immune to the negative effects of the wider macroeconomy, on balance the market has survived the financial crisis very well. Garden retailers are in a very strong position with many reporting healthy growth. True, this growth might be driven by strong sales in non-gardening categories such as catering and giftware but plants still remain a significant category for most garden centres. The most significant development in the garden retail sector is the continuing desire for the largest multiple retailer, Wyevale, to increase their portfolio of garden centres. Other smaller garden retail chains are also on the acquisition trail – the good news of course if you are an independent garden retail operator because at least you have one exit route from the business.
Despite these significant changes in the garden retail market, there are still tremendous opportunities to provide unusual and interesting garden plants to the mid-sized multiple groups (those with five or more stores), and the very large single site independent garden centres.
The landscape market in the UK is currently in a healthy condition. Whilst the supply of plants to large commercial landscape contracts remains very price competitive, the domestic landscape market is performing well with many landscapers reporting record sales years. This increases the demand for quality plants suitable for the domestic market and typically domestic landscapers are purchasing these plants from secondary wholesalers or plant brokers – a market that should certainly be of appeal to many Irish producers as operators in this market often buy large volumes of stock, thereby making transport from Ireland much more cost effective.
A growth in online sales in the UK is also providing further market opportunities. Traditional mail order companies and the newer internet companies such as Crocus and Primrose have developed an effective plant fulfillment service and frequently require new and innovative young plants to help augment their range.
Hopefully, you are convinced of the opportunities in the UK so exporting to the UK may well be the future for your business, but do your research and prepare – find out what the market needs, how the products should be presented, what is the pricing structure, how can you serve the market. In other words, develop products that have a unique selling proposition that the market values. But going it alone can be a costly business. Perhaps now is the time to consider how and who you will cooperate with to exploit the potential in the UK market?
In 2016 we will continue to provide tailored advice to those wishing to export. In addition, we will be offering a UK study tour in October 2016, with the aim of identifying and learning from best practice.
We also be providing regular export market update (EMU) bulletins for emailing to anyone interested in growing their business through exports. Other Bord Bia initiatives such as the Marketing Assistance Programme will also be available to support those looking for assistance to exhibit at UK trade shows or with the development of marketing material for the UK market. ✽