IGC Congress 2003
25 – 30 August 2003
|Trade Press||Public Press|
Floramedia Congress News
La Presse Riviera Chablais
Neues Bülacher Tagblatt
Neue Zürcher Zeitung
St. Galler Tagblatt
Tribune de Genève
IGC Congress 2002
Amsterdam – Maastricht, NETHERLANDS
25 August – 1 September 2002
After the 2nd World War, it was important for Europe to become self-sufficient. As a consequence of this, mechanisation was greatly increased and this, in turn, led to large production volumes. However, this voluminous production gradually resulted in overproduction, which gave rise, for instance, to phenomena such as ‘butter mountains’ and ‘milk lakes’. At the same time, a clear tendency arose in which the consumer started making demands and no longer automatically purchased whatever the production put on the market. This means that demand played an increasing role in determining supply.
Horizontal cooperation: garden centres
We can speak of a horizontal cooperation when companies at the same level in the chain of production begin to work in cooperation with one another. The rise of this horizontal cooperation in garden centres has been particularly prevalent over the last 20 years. A cautious start was made with the establishment of the Dutch Garden Centre Association in 1965, but the main forward rush came about in 1979 with the birth of Covatuin BV, a commercial joint venture set up by (what were then) 48 garden centres that realised that setting up a purchasing syndicate could result in major advantages.
Due to a number of social changes, many of these garden centres had already undergone considerable growth in the past. Originally, these companies had started as horticulturalists or growers. Due to the increase in free time (the free Saturday was introduced in the 1960s), these companies had to face the challenge of changing expectations on the part of the consumer. The garden increasingly came to be seen as an extension of inhabited living space in which people must invest. One result of this was that the product mix in garden centres had to be expanded. And in places where an expansion of the product mix and thus of volume arises, a purchasing syndicate offers advantages.
From the time Covatuin was started, a sales formula was also established for several garden centres: the name ‘Intratuin’ was born. By 2002, Intratuin has become a ‘franchise system’ that provides services to individual enterprises that, in addition to this, have permission to use this name. Several other enterprises that were still outside the Covatuin venture also saw the advantages of a purchasing syndicate: BV Vesatuin was established in 1986. In 1989, a second sales formula was created within the Covatuin organisation: ‘EuropaTuin’. This followed the same pattern as’Intratuin’. Vesatuin also put up a good show three years later: the sales formula ‘GroenRijk’ became operational in 1992.
Two other alternatives were available for enterprises who preferred to keep doing business under their own name and who thus preferred not to join any sales formula: either to remain completely independent, or to use the services of an purchasing consortium. Within the Covatuin organisation this became Tuinspectrum, and within the Vesatuin organisation the Vesatuin Sales Group (VVG) or the Vesatuin Purchasing Group (VIG). In these, entrepreneurs can, in some cases, also take advantage of marketing activities.
In the course of the 1990s, more joint ventures among enterprises were created, included in these are Garden Masters and Groengilde. By the end of the 1990s, it became evident that the various formulas for cooperation, under pressure from the ever increasing competition, needed to position themselves further. Sometimes this positioning can only be achieved through complete independence: this led to Intratuin becoming completely independent of the Covatuin umbrella.
Horizontal cooperation: affiliation
Over the past 10 years, affiliation has also increasingly taken off. This has mainly to do with the need some entrepreneurs have to increase growth so that they can keep a step ahead of the competition or to raise greater volumes and the need of other entrepreneurs to bring their own business activities to a close.
Ranzijn Tuin & Dier (7 outlets), Overvecht (11 outlets) and Bos Dier & Tuin (4 outlets) are examples of the first category. The increase in growth took place mainly through the acquisition of existing companies and, in a few cases, through new construction.
Due to the increasing affiliation, the sales formulas, such as Intratuin, EuropaTuin and GroenRijk in particular, consider it necessary to retain their independent entrepreneurs (or branch locations) for the future. This has led to the establishment of tighter contacts with entrepreneurs to prevent their being ‘acquired’ by outside businesses. When there is a risk that a garden centre participating in a formula will be taken over, the colleagues in the formula have the first ‘right of purchase’. This, in its turn, results in a further affiliation within the sales formula. This means that within the Intratuin formula there are entrepreneurs who now own three garden centres. Meanwhile, the garden centre formula has also shown its mettle: in some cases, it operates the garden centre itself.
Horizontal cooperation: DIY stores and garden centre combined
In The Netherlands, this combination, consisting of DIY store and garden centre was a new phenomenon in 1993. In the meantime, we have moved on 10 years and this model, after some close calls, has taken firm root. In the place occupied until the 1990s by Marktkauf and Wirichs, Praxis and Hornbach are now the market players. In 2001, Hornbach caused a revolution by acquiring two Intratuins. This strengthened the horizontal cooperation among the garden centres.
Vertical cooperation: the processing chain
Vertical cooperation is also under pressure: where the floricultural chain had previously been mainly production-oriented, a system has gradually arisen in which consumer demand has the upper hand. Because of consumer demand, growers, wholesalers and retail traders are being increasingly compelled to work together if they are to respond swiftly. Mainly because it is becoming ever more evident that retailer’s returns are placed under pressure if he/she fails to satisfy this demand. Twenthe Plant and Bunnik Plant are two outstanding examples of vertical cooperation in the floricultural chain that can respond swiftly to demand. Hillhout is a classic example of cooperation between a retail trader and a supplier in the area of dead materials.
The fact that one uniform bar code for flowers and plants has been developed is proof of the success seen by vertical cooperation in the floricultural chain. All links in the production chain have worked together to develop a system in which the retail traders can set key criteria. In the near future, this will mean that all orders and communication regarding flowers and plants will be able to be processed electronically. This will help maximise both returns and cooperation between the links in the chain.