BASIC BUSINESSES; Gone to Seed And Back, Again (Released 2002) (2023)

GARDEN metaphors are popular in business: start-ups looking for start-up capital. Mature companies fertilize to expand.

But for W. Atlee Burpee & Company, the seed producer who brought garden favorites like the Big Boy tomato and Yellow Nugget marigold to America, the more apt metaphor might be that it is pruning into a future threatened by a possible drought of keen gardeners. .

After a period of runaway and uncontrolled growth in outdoor furniture and retail, which landed the company in bankruptcy court in the fall of 2001, the year of its 125th anniversary, Burpee dramatically reduced its size and scope. It refocused on seeds and filed for bankruptcy in January.

Now Burpee is trying to carve out a more successful place for himself in the $38 billion garden industry, where seed sales are far less important than they were 25 years ago. More consumers are forgoing garden seeds as a waste of time and buying growable flowers and vegetables from big box retailers like Wal-Mart Stores and Home Depot.

"We're not going to try to achieve big growth again, not while I'm alive," said George C. Ball Jr., chief executive of Burpee's parent, Burpee Holding Company, which is trying to turn the business around by second time. since he took office in 1991.

Mister. Ball, 50, grew up working for George J. Ball Inc. in Chicago, a family seed business founded by his grandfather. After a liberal arts detour through Bard College, in 1975 he began working in product research and development at a Ball subsidiary, Panamerican Seed Company. By then, Ball had become a major Burpee supplier.

When Burpee ran into financial trouble in 1991, he sought help from Ball, who bought Burpee for an undisclosed sum and put Mr. Ball as CEO. At the time, Mr. Ball said, Burpee had tried to transform itself into a fancy plant business, "which, given its clientele, was like trying to push Mozart to people who like country music."

"So I took my research management experience and applied it to client research to try to figure out how to deliver great country music," he said. ''And it worked.''

Within a few years, Burpee was the exclusive supplier of the Martha Stewart line of seeds at Kmart and sold to other major home improvement and discount retailers. Developed an inventory system to track sales at major chains. He continued to develop his mail order business and added a large selection of live plants to the catalog. In 1995, he launched a website that still offers more than most competitors' websites. "We were going to be gang members," said Mr. Pelota.

He declined to disclose sales or earnings from the company, which is privately held. (Hoover's Inc., a corporate information research service in Austin, Texas, estimates Burpee's annual sales at $30 million.) But in an interview at his company's headquarters in this Philadelphia suburb, Mr. Ball, after a few years of success, arrogance got the best of him.

Mister. Ball said he wanted to expand the Burpee brand during the long offseason. Then, between 1998 and 2000, he bought a garden furniture company called Benchsmith, a travel publisher, the client list of the failed Garden.com website, and Heronswood, a highly regarded mail-order company. He opened four retail garden centers that competed with the stores that sold Burpee seeds.

Most of the companies failed. Mister. Ball closed the stores after just under a year and, in addition to Garden.com and Heronswood, sold the new outlets. Creditor discontent over the use of the loans landed Burpee in US Bankruptcy Court in Philadelphia last September. The bankruptcy case was dismissed in January when Burpee and its main lender, PNC Bank, settled their differences and Burpee refinanced its debt.

The failed expansion did not surprise Bruce Butterfield, director of research for the National Garden Association, a trade group in Burlington, Vt., who said 75 percent of garden sales occur in the spring and early summer. “Companies are always trying to expand their product mix to extend that sales year, but there aren't many ways to do it,” he said.

Burpee still hurts for his many mistakes.

"This year, the catalog had significantly less distribution than usual," said Jim Zuckermandel, president of Zed Marketing Group in Edmond, Oklahoma, which tracks mail order sales for the gardening industry.

Mister. Ball acknowledged that, but did not give specific numbers. Burpee has also delayed plans to expand Heronswood's business, removed live plants from its catalog (it sells a small number online) and cut staff at its Fordhook Farm trial garden in Doylestown, north of Warminster.

Although Burpee is expanding again, finding a growth strategy can be difficult due to long-term trends in the gardening industry.

The size of the average backyard has shrunk in the past 25 years, from nearly 800 square feet to 100, Mr. Butterfield said. He attributed the decline in part to the larger selection of fruits and vegetables in supermarkets and the increasing availability of organic produce. Many consumers no longer feel the need to grow backyard vegetables.

The industry also laments the rise of the time-consuming yuppie homeowner who buys tomato plants and impatience instead of growing them from seed.

"You've got the husband and wife who work, drive to soccer practice, and do 10 other things, and they're like, 'Okay, we'll do yard work on Saturday at 4,' because that's the only time they can do it. ". said Dave Devine, Burpee's director of product development. He admitted that such gardeners were unlikely to order from a catalog and did not have the patience to grow plants from seed.

In fact, the total number of mail order gardening transactions fell 17 percent in 2001 from the previous year, according to the Mailorder Gardening Association, a trade group in Elkridge, Maryland. And about 35 percent more households planted flower seedlings than seeds last year, according to market data from the National Garden Association.

''The seed business is a shrinking pie,'' said Jack Simpson, president of Ferry-Morse, one of Burpee's two biggest competitors, which sells seeds in retail stores.

Still, it may be premature to dismiss seed companies and catalogs as quaint relics. This industry, along with many others, is betting on the growth of aging baby boomers.

''The people who really have the garden live in the house they want to live in and have teenagers who require less time and attention than children,'' Mr. Pelota said. "They stay at home more, they start watching shows like 'This Old House' and 'Martha Stewart,' and they start wanting to do things around the house."

The challenge for industry leaders like Burpee, Ferry-Morse or Park Seed, a mail-order competitor, is persuading boomers to make the leap from casual gardeners to enthusiasts. Companies are focusing on marketing more than ever, said Mr. Zuckermandel at the Zed marketing group, to elevate gardening from a hobby to a lifestyle business.

Ferry-Morse has its new Sutton's line, featuring the perennials grown in English cottage gardens, while Burpee has launched a series of hand-selected, custom-designed "Fordhook Collection" packs just for Target stores.

DESPITE Burpee's recent troubles, it is the only seed company that has both retail and direct sales, which could give it a leg up in the race for older boomers. While Ferry-Morse relies on store displays and the packages themselves as marketing tools, Burpee has a catalog that carries its name to millions of homes each year.

"We know that people bring the catalog to the stores because the store owners tell us about it," Mr. Divino said. "So even if they don't order from the catalog, it generates sales."

Every seed company's packets have a web address these days, but Burpee's site offers visitors gardening tutorials and an interactive garden wizard that can tell an urban gardener, for example, which shade plants will grow. well in pots. The site also offers seed packets for specific garden designs, such as a complete pastel garden, along with a detailed layout of where everything should be planted to create a certain effect.

Mister. Ball's decisions to maintain the Heronswood catalog and use the Internet to control plant sales suggest that he still wants to expand the plant business, which would extend the Burpee season a bit. He could also give Burpee another way to do business with occasional gardeners.

''There are people for whom travel is business,'' said Mr Ball, referring to serious gardeners who plant seeds and troll plant catalogues, and then there are plant buyers, ''for whom the thing is the thing. .''