Network Grower Concept - Fall 2007 Update

Bell Nursery currently operates production facilities in Burtonsville and Sudlersville Maryland.  Our facilities can be viewed in person or via the Internet at www.bellnursery.com.

Bell has operated from the Burtonsville location since 1976. Sales are 100% wholesale.

For individuals that become network growers, Bell provides specifications, the production recipe, initial input materials, and weekly assistance from a range grower. There is an initial network participation fee of $38,000.00 moving to $45,000.00 for 2007 selections, this fee can be incorporated into the greenhouse loan application.  This fee will cover operational training, and infrastructure expansion related to network development. Beginning with the second contract year, there is a minimal marketing fee based on an individual’s gross revenue. Existing growers will be available to speak with interested parties regarding finance and return on investment.

Greenhouse Grower Magazine named Bell Nursery Grower of the Year in January 2002. Grower Talks Magazine featured the Bell Associate Grower Network as its cover story in September 2001. The nursery has consistently been featured in trade and business publications as an innovative leader for both production and marketing techniques.  A follow up story was done recently by Grower Talks providing a network update.

Material is planted at a Bell facility, and then finished by a network grower. All young plants are delivered to a network greenhouse on Bell trucks, grown to finish, and delivered to Bell as the material matures and reaches prime selling specifications. There is a cart pickup fee where grower delivery is not possible.

We have established relationships with over twenty-five farm families.  These network greenhouse operations are part of our strategic growth plan, and play an integral part of our future expansion.  Newly established growers will receive three-year agreements at the inception of our business relationship.  From the conclusion of the base agreement, future sales to Bell will continue based on mutual agreement, or growers are free to choose to establish an alternative customer base.  It is in our best interest to retain a long-term working relationship with network growers.

Quality of finished material is imperative. Bell will provide access to expertise in a number of ways. Basic and continuing education will be offered at our Burtonsville location annually. A Bell range grower will provide weekly “hands-on” crop advice during the growing season. A Scout from the Cooperative Extension Service will also be involved with your crops weekly. The network participation fee covers the cost of the Bell range grower. The fees related to the scouting services are paid directly to the scout.  Only a Bell approved scout can participate with network growers.

Overall responsibility for quality rests with each individual business owner. Finished plant material that does not fall within an acceptable range of specifications will not be marketed through Bell.  While we have not seen major crop failures in the past, there is always risk associated with producing plant material.  Crop insurance should be included in your business plan in the event of any type of a natural disaster or otherwise insurable incident.  We suggest that you speak with Andy Bennett at The Piedmont Group Insurance Solutions 1-866.620.7260 for a rate quote.  You can also  contact Andy via email at: andy_bennett@thepiedmontgroup.net or visit their website at: http://www.thepiedmontgroup.net/  You should identify yourself as a Bell Network Grower.  Existing growers may offer other insurance related suggestions.

As debt service is removed from the scenario the net profit becomes extremely attractive.

Other crops may ultimately be offered pending analysis of grower qualifications, success with spring crops, and market need.  Financial returns may be enhanced with the production of additional crops such as hanging baskets.  When considering this business, all decisions should be based on receiving two turns for floor crops from Bell.  Growers are encouraged to consider hanging baskets long term to improve the return on investment.  One turn of hanging baskets per season could be expected. We encourage interested parties to speak with existing network growers regarding all aspects of the grower network before indicating an interest in moving forward.

We are suggesting that applicants speak with our lender as the initial financial contact. The Farm Credit organization understands the concept, and is interested in making loans where appropriate. You may contact Bill Borsa @ 800-315-3330 to obtain information related to financing.  If you have an existing relationship with Farm Credit, we still ask that you initially speak with Bill Borsa, as he is serving as the network coordinator.  You are free to work with any lender, but Farm Credit does understand and fully support the business concept.

We offer three suggestions for greenhouse construction.  Rough Brothers is based in Ohio, and has provided construction services for many network greenhouses. Pricing is available from Rough Brothers by contacting Rob Hendrik at 905-562-6600 or via email: rhendrik@vaxxine.com.  Connelly Greenhouses available through Griffin Supply - For pricing contact Dan Morrissey at 978-851-4346 ext. 80132, or via email: dmorrissey@griffinmail.com.  A new supplier, DeCloet Greenhouses have been added for 2006.  Contact Dan DeCloet at: Decloetghsesysca@aol.com. There are no other builders approved for network construction at this time.  We do encourage you to speak with each supplier as part of your decision making process.

The construction quoted by each company should be “turn-key”.  The base greenhouse should include all work necessary to fully function. Watering booms, environmental controls, injection equipment, and interior plumbing and electrical work is included in the base price. Each greenhouse must have a backup generator with automatic transfer capability.  A loading dock is required, and options should be discussed with your greenhouse builder. The greenhouses are easily expanded if you choose to ultimately grow the business beyond the initial investment.

Based on an analysis provided by Farm Credit, a network grower will realize a positive cash flow, based on two spring crops - (approximately seven weeks per crop, with no hanging baskets included).  The concept budget assumes a full greenhouse payoff in five years.  Returns may be impacted negatively if acceptable quality levels are not maintained. Stronger returns may develop based on utilization of the space beyond the initial Bell commitment. Additional turns, as well as hanging baskets, may be offered depending on market need and the associate grower's performance.  Space planning, timing, proven success, and overall cooperation will impact decisions regarding extra material if it is available.

If you are interested in learning more about network production opportunities for 2008, feel free to contact Gary Mangum at gary@bellnursery.com for additional details.

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