New formulas plant seed for fertilizer growth spurt

Discount Store News, April 1, 1997 by Richard Halverson

A focus on new formulations and a push for greater brand marketing are the key characteristics of the lawn fertilizer and garden plant food market as sales get off to a good early start, thanks to a mild winter in the Northeast and South.

Vigoro, for example, is attempting a comeback as a national brand by throwing in its lot with The Home Depot's 500 stores. Effective Jan. 1, Vigoro signed a deal with The Home Depot to give it exclusive rights to sell its branded product. Vigoro, of course, remains a private label producer, making about 75% of Kmart's KGro private label fertilizer.

In a reformulation of time-release fertilizer, Vigoro, Winter Park, Fla., has replaced the standard sulfur coating that slowly dissolves to release nutrients with a patented coating it calls V Coat. The company says the new coating produces a straight-line release of nutrients over the life of the fertilizer, rather than a release that peaks and then declines.

In another brand push, Pursell Industries Sylacauga, Ala., is introducing its Sta-Green granular garden fertilizer into Wal-Mart this season. Pursell also makes Wal-Mart's private label Sam's Choice granular lawn food.

Pursell is banking on its exclusive Polyon formulation to aid in its fight against the domination of Scott's and its Miracle-Gro sister brand. The new formulation covers urea fertilizer with a thin coating of plastic. Through osmosis, moisture and heat draw the fertilizer out, and the thickness of the coating determines whether total release comes over three, six or nine months.

For its part, Scotts, Marysville, Ohio, is standing by its tried and true time-release formulation, which coats fertilizer with a layer of sulfur that slowly dissolves to release nitrogen and other plant nutrients.

All this leaves organic fertilizers hanging on with just a toe-hold in the market. Consumers did not live up to early expectations that they would flock to organics, made primarily of chicken and cow manure. The problem: the slower action and low nitrogen content of such products. Instead, government agencies, such as parks and forestry departments have become the main proponents of organic products, in large part because of concerns about the liability of having kids play on grass treated with chemicals.

Fertilizer is one category at the mercy of weather, said the buyer for one Midwestern discounter. Last year, the Midwest had a cold and wet early spring that hurt early sales. But June and July turned out to be excellent months because the rains kept up and temperatures were mild, so grass kept growing all summer, he said. In 1996, sales rose 5%.

"With a nice early spring, everybody is gung ho about buying lawn fertilizer."

What is clear is that manufacturers' prices have "risen a tad over the past couple of years," the buyer said. Since retailers have held the line on prices, margins eroded by a couple of points. Margins range from 12% to 35%, he said.

The discounter carries just Scott's and a private label line made by the company that owns the chain.

Scotts differentiates between home centers and big box discounters and garden centers, he said, offering some lines to mass merchants and others to garden centers.

The main guns for the chain are: crab grass control and fertilizer, weed & feed fertilizer, insect control fertilizer and fall winterizer fertilizer. The private label offerings duplicate those from Scotts.

The No. 1 seller is weed & feed, he said.

In soluble fertilizers, the chain carries Miracle-Gro and Mir-Acid, he said.

Both granular and soluble are viable, he added. "A lot more people are competing for market share."

As for organics, though, the chain dropped Ringer products, as well as its own private label organic products, two years ago because of lack of demand, the buyer said.

"I didn't sell either one, even when I cut the price. Consumers want instant gratification," he said.

Venture is going to start testing fertilizer at five stores that feature parking lot garden centers, which opened around Easter. The chain will carry just a regional brand, Loft's, made by the New Jersey grass seed company of the same name, which produces private label KGro for Kmart stores in the Midwest. Venture will carry three kinds: regular lawn food, weed & feed and lawn starter. For garden plants, it will carry soluble products from Miracle-Gro and Schultz.

In contrast to the rougher winter in the Midwest, the East was blessed with a mild winter and scant snow, so many East Coast discounters got out their spring fertilizer set early.

The Wal-Mart in North Brunswick, N.J., for example, was making an early statement with bags of Scott's (15,000-sq.-ft. coverage) on a racetrack stackout. They were the Big Four: Turf Builder Plus to halt crab grass, $34.96; Turf Builder Plus II weed & feed, $28.44; Turf Builder Plus for insect control, $34.97; and Turf Builder, $20.88.

Wal-Mart offers its Sam's Choice straight granular with 5,000-sq.-ft. of coverage for $5.97. Also shipping in mid-March was Pursell Sta-Green granular garden fertilizer, which is being promoted as an alternative to soluble Miracle-Gro. Pursell claims the Sta-Green formulation has to be applied only every two months because it contains Polyon, a slow-release coating.