I have been hearing rumors that Color Spot has bought El Modeno Gardens Nursery. If it is true, Color Spot is emerging as the number one supplier of plant goods for the chain stores in the west and southwest. By purchasing El Modeno, Color Spot moves into the shrub and tree category along with their bedding plant business. This all makes sense to Home Depot and the other chains. By having one supplier for all their plant needs, they can work together to make sure the right plants are grown and shipped to the right stores. When you get as big as the box stores you want to make sure your supplier network is on the same page as you are.
What's to happen to other smaller companies that have decided to service the box stores will remain to be seen. I would be a bit concerned with this development if I we're one of these companies. What happens when Color Spot can sell that juniper to The Depot at a price lower than what you can? Another rumor is companies wanting to service the box stores with plants will have to sell their product through Color Spot first?
The trend seems to be clear. Box stores will have fewer, but larger suppliers of plants and fertilizers. I would have to guess that Scotts and Color Spot have the bulk of the garden business from these chains. This does not bode well for the myriad of smaller wholesale nurseries who are sitting on a mountain of unsold plants this year.
My guess as to how this will shake out is you have two different horticultural industries. One larger, with the likes of Home Depot, Lowes, Wal Mart, Costco, and others buying from just a few of the largest growers and suppliers like Color Spot, and Scotts. The second horticultural industry is everyone that is left. Smaller and medium sized outfits trying to find their way in the plant world. I believe we will see a lot of these businesses going out of business this year.
While the advantage to the big boys is clear, there is a disadvantage to having only one supplier for a particular category. Remember the late blight this last year? It cost Bonnie Plants millions in sales when infected plants we're found at the box stores, whether the blight originated at their greenhouses or not. So with the power size brings, the downside is equally powerful.
Does anyone have more information on Color Spot buying El Modeno Gardens?