Mel Garber, Extension Horticulturist
Before a grower decides what plants to produce, it is important to know the target customers and alternative products for their market segment. In marketing terms, this requires that we have an understanding of the Market Channel Map. The Market Channel Map describes the products, distribution networks, and ultimate customers. With an understanding of the customers and their product requirements, the producer is in a better position to create a "market pull." This implies that as the product is ready there will be a customer ready to purchase. The other side of the coin "production push" refers to the situation where we first decide what we want to produce and then look for a customer. Unfortunately, the production push situation usually leads to scrappage of plants, lower prices, and lower profit. Therefore, an important first step to product line expansion or business start-up is to develop a Market Channel Map for the product in question.
The Market Channel Map for in-ground shade trees is depicted below. The heavy line at the center of the channel map indicates the movement of the largest volume of trees. The liners are produced in-ground as bareroot trees or as containers and sold to the whip producer. The whips are sold as bareroot plants to in-ground finishers. The in-ground finishers grow the trees for several years and sell primarily as ball and burlap.
The finished trees are typically sold to landscape contractors, landscape developers, or municipalities. The finishers have sold direct to these customers; however, in recent years, the rewholesaler has emerged as a significant force. Rewholesalers are specialist that buy from the finishers and hold in a display yard. The trees are picked up by landscape contractors, developers, and municipalities; or the rewholesalers delivers. Rewholesalers may also carry a full line of hardgoods to complete the landscape project. Some of the finishers have integrated forward and will set up a rewholesale yard near their growing operation during peak spring planting.
Whips are sold to a variety of customers. Bareroot whips are sold to municipalities for street tree plantings. Municipalities have become increasingly important customers for whips. In the past, cities have purchased primarily the large ball and burlap trees; however, as budgets are reduced, they have been forced to buy smaller, less expensive trees. The good news is that if handled correctly after harvest, whips can give similar performance for the municipalities.This should be a growing market for bareroot whips in the future. Whips are also sold to container growers. The bareroot whips are potted in the winter or early spring and sold in the same growing season. The container nurseries sell primarily to garden centers, mass merchants, and landscape contractors. Although garden centers generally buy container trees, many will buy bareroot whips and produce their own container trees. The decision to buy container trees or bareroot whips is based primarily on facilities available at the garden centers and the proximity of container tree growers to the garden centers.
The liners, in addition to being sold to the whip growers, are also a good product for highway departments. They represent a small tree that is handled efficiently in large volumes, readily established, and low cost per unit. They are well suited for situations where there is plenty of time for development of the finished product and money is limited.
The distribution and shipping requirements are another important element of product line evaluation. Finished trees are typically grown close to the customer because shipping cost per unit can be very high. However, items such as liners and whips, that are shipped as bareroot plant material, can be distributed on a national basis. For instance, a large percentage of whip production occurs in Oregon; yet, whips are distributed throughout the United States. This is possible because whips are a relatively small tree, generally unbranched or lightly branched, and shipped bareroot which allows a high density in the truck. Although national distribution potential is appealing from a sales perspective. It does require knowledge of the national market.
Market Channel Map for In-Ground Shade Trees
Most growers in Georgia produce finished trees and sell to landscape contractors, landscape developers or municipalities. based on the Market Channel Map, there are several opportunities for Georgia growers to expand their product line. Whips are a product with numerous avenues of distribution and one of increasing demand. However, most of the whips consumed in Georgia are purchased from Tennessee or Oregon. There is an opportunity for local growers to improve upon the quality of whips supplied from the southeast and to sell on a local, regional or national basis. It is important to emphasize that the market opportunity is for top quality whips.
The opportunity also exists within the state to produce high quality liners. The quality of a finished tree is significantly influenced by the quality of the liner. Most liners in the state are either produced by the finisher or brought in from Florida and Tennessee. Application of state-of-the-art forestry and ornamental nursery practices can result in better quality liners than are currently available.
From the Market Channel Map, we see there are several opportunities for Georgia growers to produce in-ground trees. Once the target product and customer group are selected, the next step is to interview potential customers and determine specific varieties, specifications and service requirements.
The University of Georgia and Ft. Valley State College, the U.S. Department of Agriculture and counties of the state cooperating. The Cooperative Extension Service offers educational programs, assistance and materials to all people without regard to race, color, national origin, age, sex or disability.
An Equal Opportunity Employer/Affirmative Action Organization Committed to a Diverse Work Force
Issued in furtherance of Cooperative Extension work, Acts of May 8 and June 30, 1914, The University of Georgia College of Agricultural and Environmental Sciences and the U.S. Department of Agriculture cooperating.
Gale A. Buchanan, Dean and Director