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To Study Entrepreneurship, Stop and Smell the Roses

June 28, 2010 By Lee Egerstrom, Economic Development Fellow
Linder's Greenhouse and Garden Center is celebrating its 100th anniversary as a metro agriculture and horticulture company this year - a milestone made even more unusual by staying in Linder family hands for three generations.
We could call Bachman's and send the Linder family some flowers, but that hardly makes sense. What's more, the fourth- and fifth-generation members of the Bachman floral family are doing their own celebrating. That family-owned company has been in business 125 years.

A good way to salute both these businesses and their family proprietors is to call on everyone to stop and smell the roses. If you are involved with economic development, are financing or encouraging entrepreneurship in any way, or are involved with public policies that affect public research, you should look at the unique nursery and landscape industry here in Minnesota.

This integrated Minnesota industry now generates more than $3 billion annually in direct and indirect economic activity throughout the state. By doing so, it has proven that there are great economic as well as esthetic benefits for Minnesota to be a "green" state.

Horticulture is a part of the larger Minnesota agricultural industry. Like farming, nursery and landscape businesses remain mostly family-owned and operated. But unlike most of agriculture, it focuses on serving a domestic market while Minnesota farmers are leading exporters.

A 2002 economic study of the industry found only $96 million of Minnesota grown horticultural plants and related services were exported to other states, and only $4.7 million was exported to Canada and other countries. That was out of $2.1 billion in total gross sales.

Surrounding farmers who grow corn, spring wheat and soybeans look to export markets to either absorb their production or provide enough demand elsewhere to sustain profitable commodity prices.

We now live in, and will continue to live in, a bipolar economy that depends on both domestic and foreign markets. This is also where similarities of business models intertwine and part company.

Jon Horsman, communications director for the Roseville-based Minnesota Nursery and Landscape Association, said Minnesota has from 2,500 to 3,000 companies that sell related goods and services. Many are seasonal retailers while others offer various products for businesses, homes, or supply environmental services.

Between 1,400 and 1,500, however, are in the nursery and landscape businesses and are members of his association. Those members band together to work with University of Minnesota horticultural scientists and Extension Service professionals, with some Minnesota State Colleges and Universities (MnSCU) specialists, and with each other to advance plant breeding, improve business practices and raise environmental awareness of growing for the microclimates of Minnesota.

What makes these firms unique in an age of consolidations, outside investors, industry cannibalization and chain ownerships is that almost all of the association members are family-owned enterprises. Horsman said these multigenerational Minnesota families "stay in the business because they love it."

That describes the families behind St. Paul-based Linder's and Minneapolis-based Bachman's. It also applies to 105-year-old Bailey Nurseries, based in Newport, and into a fourth generation of family owners.

Bailey now has operations in Oregon, Washington, Iowa and Illinois and supplies flowers, shrubs and trees to more than 4,500 independent garden centers, landscapers, growers and wholesalers.         

Meanwhile, members of the three-generation Gerten's, based in Inver Grove Heights, are making plans to celebrate their centennial within the coming decade.
While not all nursery operators and landscape specialists show such staying power, the association is "filled" with member firms that are at least 50 years in business and continuing as independent, family-owned ventures, said Horsman. 
A St. Cloud State University economic impact analysis of the industry in 2002 found Minnesota's nursery and landscape industry generated sales of $2.1 billion, had a payroll of $697.9 million, and provided 10,000 full-time jobs, 1,700 part-time jobs and 16,500 seasonal jobs.

Horsman said plans are underway to update that study. Anecdotal evidence suggests strong growth forecasts predicted at the time of that 2002 report were correct, he added, despite slowing during recent recession years.

Growth likely took place in several areas:
  • "Hard goods" (fertilizers, tools, mulch, landscape lighting, retaining walls) - 54%
  • Landscape design and installation - 50%
  • Trees and shrubs - 47%
  • Lawn, garden and tree care services - 37%
  • Irrigation design and installation - 35%
  • Annuals and perennials - 30%
The industry reaches all areas of the state, according to SCSU research:
  • A nine-county measure of the Twin Cities found $1.7 billion in annual gross sales.
  • Southern Minnesota rang in $125 million.
  • The state's northwest quadrant grew by $53 million.
  • Central lakes and northeast counties accounted for $89 million.
That really is pretty good business.

Going forward

This industry should show other potential entrepreneurs and public officials that there are ways to make business bloom in Minnesota.

Entrepreneurship needs to be encouraged and supported. This starts with support for research at the various departments of the University of Minnesota that house appropriate sciences. It includes support for undergraduate and graduate students who will be needed to start and sustain locally owned businesses and industries for the next century. And it also includes support for training, certificate programs and information assistance that come through MnSCU campuses, programs and personnel.

This is the infrastructure -- the public investment -- that keeps Minnesota green and beautiful while encouraging entrepreneurs to plant roots in the state.

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