By Erika Jensen
A van full of flowers; a market in Milwaukee ready for fresh, local flowers; 10 flower growers willing to work with each other and committed to sustainable growing techniques - that’s what makes Fair Field Flower LLC what it is. During 2002 our group organized, eventually incorporating as a limited liability company. Now we are one-season veterans, ready to assess how we are doing and use our experience as a springboard into the future. Our goal is to provide the best in fresh, locally grown specialty cut flowers to florists in the Milwaukee area while serving as a model for others who would like to market sustainably produced flowers cooperatively.
The group started with one person, Carol Larsen, a part time flower grower who has sold flowers at the Dane County Farmer’s Market in Madison, Wisconsin, for 28 years. While growing flowers, Carol worked as an assistant program director for the Wisconsin Telecommunications Relay Service. The organization provides telephone relay service to people who are deaf, hard of hearing or speech disabled. Although she liked the job, she had always dreamed of becoming a full-time flower grower. Early in 2002, she applied for and received a Dane County Ag Enterprise Grant for $6,000 to start a cooperative of sustainable flower growers. The program’s goal is to encourage the development of markets for specialty and value added products.
Carol recruited the group members gradually, by talking to many different growers. She visited several local farmers' markets, the Value Added Conference in Eau Claire, Wisconsin, the Association of Specialty Cut Flower Growers annual meeting. The group members ebbed and flowed for a while, but by January several growers were attending the monthly meetings regularly. These included Carol, Judy Hageman, Joe Schmitt, Kay Jensen, Kim and Roberta Barham, Kate Cooper, Bob Klebba, and myself—Erika Jensen. Although people joined for different reasons, some common motivations were to share ideas and expertise, take advantages of marketing collectively, and connecting with other like-minded individuals. Even Joe Schmitt, the most experienced grower with a well-established business, saw the advantages of being part of a group. “Because of my age, I don’t know how much longer I want to do things by myself. Also, the business end of flower growing doesn’t come easily,” Joe said.
In April of 2003, our group finalized their arrangements by signing an LLC (Limited Liability Company) agreement. Greg Lawless, of the Center for Cooperatives at the University of Wisconsin, talked to the group about how to select a business type. The group chose to form an LLC over a cooperative for a couple of reasons. First, some group members had concerns that a cooperative structure would result in one or two people doing all the work and the rest of the members doing not much at all. Secondly, the group liked what the LLC structure had to offer. An LLC could be described as a combination of a corporation and a partnership. LLCs offer some liability protection for company members (as you’d have with a corporation) while allowing flexibility in managing the business. At the same time, the LLC gave the group almost all the attractive elements of a cooperative. We started with a basic LLC agreement and made additions and changes to suit our particular needs. Since the legal language of the document was somewhat confusing, we hired a lawyer to answer questions about various points, and to finalize the agreement. During a marathon meeting, we read each sentence of the agreement out loud and made sure that everyone understood exactly what it meant. After finalizing the agreement, each member signed it, and purchased one share in the LLC, for $200. Each share will entitle the member to one vote in decision making.
During the spring Carol applied for another grant to help with operating expenses. This one was from the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP). We applied for a grant of $19,000, and eventually received $12,500. According to the terms of the grant, FFF will serve as model for economic development and sustainable production techniques. The grant paid for operational expenses for our first year, such as phone and website, driver and manager salaries, office supplies and expenses, and so forth. There is also a small salary ($2,000) for John Hendrickson, of the University of Wisconsin, to coordinate a growers school for the group members. John is an outreach specialist with the Center for Integrated Agricultural Systems at the University of Wisconsin-Madison. For the past six years, he has coordinated the Wisconsin School for Beginning Market Growers. During six winter workshops, Fair Field Flower growers will learn about various topics such as soils, marketing, and variety selection. This will facilitate education of new members and will be an educational resource for growers throughout the state. All material developed through the Growers School will be used to develop a ‘School for Beginning Cut Flower Growers’ hosted by the UWCIAS, similar to the current popular UWCIAS-hosted ‘Wisconsin School for Beginning Market Growers’. Other educational efforts will also be a part of the grant, all aiming towards letting other cut flower growers know about sustainable production methods. “The growers school is forcing us to get organized about our techniques,” said Judy Hageman, who sees the workshops as a positive step.
While we formulated the LLC agreement, we also discussed a set of production and post harvest handling standards for the group. Although not strictly organic, many organic principles are followed, and OMRI standards were used as a starting point for discussion. 2003 was defined as a transitional period, during which time a standard potting soil without synthetic fertilizers was acceptable, and a non-OMRI approved herbicide was allowed before planting, but not during the planting season. For 2004 and succeeding years, allowable practices include organic seeds and plants when available, OMRI-approved plug mix when available, only non-petrochemical fertilizers, only OMRI approved pesticides and fungicides, and crop rotation. The topic of post harvest handling provoked the most discussion. We decided to disallow the use of silver thiosulfate (STS) but allowed Floralife (and other like products). For bucket cleaning, DCD and bleach are both acceptable.
Our first season
Before the first delivery run, Carol Larsen, Joe Schmitt and Judy Hageman did scouting trips to various florists in Milwaukee to determine interest and conduct market research. During the first delivery season Carol Larsen served as both the manager and driver for Fair Field Flowers. A refrigerated van was rented from Joe Schmitt. The first delivery run was in the third week of June; through late September, Carol picked up the van very early on Wednesday morning and delivered flowers all day. At the start we had 22 florists on the route, but throughout the season we added and deleted several. A few florists let us know that our product did not fit in with their style of floral work, or they had other suppliers, or did not have the volume to make our stop worthwhile. At the same time we were referred to florists who became some of our best customers. Our route eventually narrowed down to 19 florists.
A number of issues came up during the first delivery season, although for the most part it was relatively smooth sailing. We had very few quality issues, and for the most part florists did not seem to think the issues were a big deal. Carol felt that quality issues were something that they were used to dealing with. Carol always asked one question as she arrived each week: “How did everything go?” This provided an opportunity for florist to not only talk about quality problems, but to pass on valuable information and feedback. We always offered reimbursements in the event of (rare) quality problems.
One issue that was sorted out during the first delivery season was determining how often group members would get paid. Originally, we had envisioned that payment would happen after each weekly run. We soon found, however, that monthly payments were less labor intensive and helped with cash flow. Also, some runs toward the end of the season ended up losing money; we had to then decide how members got paid. Group member Kay Jensen, who has considerable business experience, helped with that decision. She recommended that salaried employees (in this case Carol) would get paid first, followed by other expenses such as van rental. Members will always get paid last; this prevents problems of debt from arising.
As we discussed early in the spring, each grower decided how much to charge per bunch. In general, most members accepted the recommendations of the grower with the most experience in this market. FFF added on a percentage to cover the cost of delivering and selling the product. At the beginning of the season we started with a 17% markup; in September we increased it to 19%, as we found it did not cover all the costs. In many cases, this meant that our flowers were priced higher than wholesale prices. "I am not
worried about being above the wholesale price generally because our selling
point is locally grown, fresh, sustainable product so we are worth more<" Carol Larson said.
Unfortunately, we found that although we care very much about growing our product sustainably, not many of the florists did. Joe Schmitt, who has the most experience with florists, warned us about this issue. In his opinion, florists don’t want to think too much about how their flowers are grown, because if they did they’d have to think about how most of their flowers are produced in Latin America—often with horrendous worker conditions and toxic pesticides and herbicides. Because of this, we didn’t use the sustainable growing practices as a major marketing angle. Ideally, we’d like to be selling to florists who care about our growing practices, but we are not quite there yet.
The Fair Field Flowers website formed a key component of communicating with our florist customers. Growers submitted their weekly offerings by Sunday night, and Carol posted them on the website. Florists could then look at the information right away on Monday morning, and make decisions about what to purchase from their wholesaler and what to purchase from Fair Field Flowers. The website also contains other information about our business. To view the website, go to www.fairfieldflowers.biz.
All in all, it was a pretty good year. Even though we got a fairly late start we did well financially; total earnings for the year were $22,000. We did have a number of expenses that were paid for by the grant money, and will have to earn more money in 2004 to cover these expenses. Judy Hageman, who was involved with the grower’s cooperative Home Grown Wisconsin during its beginning stages, says she is amazed at what we accomplished the first year. Home Grown was a hard sell at first, but persistence paid off after two or three years. Judy sees the same potential for Fair Field Flowers. Joe foresees that Fair Field Flowers “will not have any problems surviving.”
Group members got along well and had few, if any, interpersonal problems. Both Carol Larsen and Judy Hageman are impressed by the strengths that each LLC member brings to the group. “Everyone really respects each other,” said Carol. “They each bring different skills and interests.” For Carol, who always dreamed of being a full time flower grower, the experience was extremely positive. “I know this is what I want to do, and there’s nothing more powerful than knowing what you want to do,” she said.
Plans for 2004
Even though we did fairly well for a first year, we still did not make money. Since many businesses do not make money for a number of years, this is not necessarily a big problem. However, it is necessary for us to plan carefully so that we can better meet our expenses for 2004. We’d like to boost sales from $22,000 to $63,000, deliver for 24 weeks and lower our shrink (unsold product) from 30% to 20%.
We plan to start our season a month earlier and sell a month longer in the fall. We would like to keep costs lower by using a smaller van for the run during early spring and late fall when our product volume doesn’t justify the expense of the larger vehicle. We are not sure exactly where this van will come from - perhaps one of the other LLC members. Using hoophouses to extend the season has been discussed as a way to increase early and late production. One of the group members, Judy Hageman, does most of her flower production in the early season in hoophouses. Starting in February, she plants delphinium, ranunculus, larkspur, sweet peas, and snapdragons, which she grows without supplemental heat. These plantings are followed by lilies and lisianthus in April. Sending flowers earlier would mean that we could ship more of Judy’s flowers. In addition, Kay Jensen plans to grow tulips and sweet william under hoops.
In addition to extending the season, we will have to increase our overall production, filling the van each week with high-value product. We plan to streamline the product offerings so we grow more of what the florists like and purchase a lot of, and less of the lower-value crops. We also hope to recruit more growers for the year from the Madison, Wisconsin area. If you are interested, please contact Carol Larsen at 608-437-3966 or 608-220-5795.
Late in 2003, we had a meeting where we determined who was going to grow which crops for 2004. We rated each flower product as one of the following four categories: “high value/ high demand”, “high value/ low demand”, “low value/high demand” and “low value/low demand.” We based our decisions on what to grow from which category the plants fell into, most notably eliminating the flowers in the “low value/low demand” category. We allowed two or three growers to sign up for each flower crop. Later we plan to break into small groups to discuss which group members will grow which varieties of each flower, and how much each person will grow. This takes lots of time and gets fairly complicated, but is truly worth it so that each of us can plan our gardens appropriately.
Of course, we all continue to sell our flowers elsewhere, at farmers' markets, to grocery stores and other florists. Our only limitation is that we can't separately sell to florists in Milwaukee.
For all the Fair Field Flower growers, there are hopes that 2004 will be a good year, when we are able to hit our stride and achieve financial stability. So far, we are off to an excellent start and have high hopes for the future. A follow up article in Growing for Market in 2004 or 2005 will let readers know how we are doing.
Erika Jensen is a flower and vegetable farmer living in Waupun, Wisconsin.