Fertilizer hits fan: vendors compete over new product

Discount Store News, Sept 5, 1994

NATIONWIDE DSN REPORT -- Nitrogen war has broken out between the two fertilizer superpowers, Scotts and Miracle-Gro.

And Wal-Mart has joined the fray with Sam's Choice, its private label fertilizer and its best-selling brand.

Miracle-Gro fired the first salvo by invading Scotts turf, granular lawn fertilizer, with the introduction of a granular lawn fertilizer, Extra Long Lasting Lawn Food. It comes with a 32% nitrogen content, compared to industry norms of a maximum of 29%, and with claimed superiority in slow-release capability. The move marks a radical departure from the water soluble lawn and garden fertilizers that have been the cornerstone of Miracle-Gro marketing.

Scotts counterattacked by introducing its own high-nitrogen lawn food, Ultra Turf Builder, also with a 32% nitrogen content, up from 29% on standard Turf Builder. It also improved its slow release capability. Both will market their products by claiming to provide the best slow-release capability.

Wal-Mart launched a third front by increasing the nitrogen content of its Sam's Choice from 26% to match the level of the 32% level of the other two combatants and improved slow release capability.

Kmart, which markets private label K-Gro lawn fertilizer, remains neutral by keeping nitrogen at 29%. Vigoro, which produces K-Gro, also is sticking with 29%.

For lawns, nitrogen provides the nutrient essential for lush, green growth. Slow-release processes extend the greening season, instead of dumping all the nutrients at once.

To launch its new granular lawn fertilizer, Miracle-Gro is spreading $10 million into a TV ad campaign that it hopes will expand the category faster than the anemic 2% to 3% growth rate for the past several years. Bearing a premium price tag of about $2 more than top-of-the-line granular, the Miracle-Gro granular lawn fertilizer, introduced last month at the Hardware Show in Chicago, could lead to improved penny profits for retailers if Miracle-Gro can persuade homeowners to trade up.

Scotts' Ultra Turf Builder, introduced at the Hardware Show, also will cost about $2 a bag more than standard Turf Builder. The new premium line gives Scotts consumers the choice of four product lines, starting with entry-level product that gives immediate greening but no slow-release capability.

Wal-Mart is holding the line on price for Sam's Choice by reducing the amount of phosphorus and potassium to offset the increase in nitrogen. For an opening price point, Wal-Mart also markets Green Charm. Pursell Industries, a major producer of private label fertilizers, makes both PL brands for Wal-Mart.

Meanwhile, organic fertilizers, such as Scotts' new Iron Bull, steer manure fortified with iron for better greening, and its new organic fertilizer made from compost leaves and grass, have settled into a small market niche of perhaps 5%. Slow consumer acceptance of organics is prompting Ortho, for example, to reassess its marketing to reassess its marketing approach to the category with its Orthoganics line.

Consumers are reluctant to pay the higher prices for organic fertilizers and miss the quick greening affect that comes from high nitrogen content, a Ringer spokesman said. In a compromise approach, Ringer introduced last year a lawn fertilizer based on feather meal but spiked with chemical nitrogen for quicker greening. It will keep the nitrogen content at 16% for 1995.

In addition to increasing the nitrogen content of Ultra, Scotts boosted the potassium content to 6%. Its phosphorus content remains at 3%.

Scotts is extending the slow-release capabilities of Ultra by increasing the amount of water insoluble nitrogen, which breaks down over time, and making each granular more uniform.

The new Miracle-Gro granular uses a polymer coating, patented by Pursell Industries, to slow chemical release and extend the greening season. Through a slow process of osmosis, moisture penetrates the polymer barrier to release nutrients over time.

Wal-Mart is boosting the nitrogen analysis of its Sam's Choice line of granular and is increasing the thickness of the polymer coating that slows release of the plant food.

Miracle-Gro hopes to create a new premium market for lawn fertilizer, and the retail for a bag to cover 5,000 sq. ft. will range from $11 to $12. That compares with a retail of $8 to $9 for Scotts regular Turf Builder, and a retail of about $2 more for its Ultra line, or $10 to $11. On everyday prices, Sam's Choice sells for $6.94 and K-Gro, $7.97.

Scotts claims that its new Ultra line will deliver 1.5 lbs. of nitrogen per 1,000 sq. ft., compared to 0.9 lbs. for standard Turf Builder, in part because of increased nitrogen content and also because a bag intended to cover 5,000 sq. ft. weighs about 3 lbs. more (18.5 lbs. total) than a standard bag at about 15.5 lbs.

Miracle-Gro makes the same claim that its granular lawn food will deliver 1.5 lbs. of nitrogen per 1,000 sq. ft. and says a bag weighs about 23 lbs. In a packaging innovation, Scotts' Ultra comes in a squat bag that resembles a supermarket brown bag so that it will stand upright on shelf or pallet for better facing presentation, rather than the traditional long, slim bag that can only lie down.