Improving profit for the flower grower – A study using benchmarking

RIRDC - Gerry Parlevliet

Type: Research Paper
Knowledge level: Advanced

Farm Table says:

Benchmarking is a very important business management tool - but takes a lot of work and time to achieve the outcomes you are after - worth the effort!

What is the problem?

The flower industry in Australia is considered very profitable by some and loss making by others.

There is no clear understanding of the cost structure and profitability, nor are the tools available to growers to help them identify not only their own viability but also the comparative profitability between plant types and varieties grown.

This project aimed to identify improved practices in both production and financial management and to help enterprises become more profitable.

Benchmarking as a tool has been used in many industries to identify production and financial parameters.

What did the research involve?

This project worked with growers in Western Australia and some other states to identify their costs and production structures. It reviewed knowledge on benchmarking in other industries and developed a self help manual template for future use. It carried out an extensive program of feeding back to industry the concepts, benefits and results.

The project worked with waxflower, protea and exotic growers in Western Australia and Queensland and achieved a useful indication of the factors that impact on profitability

What were the key findings?

Each of the flower commodity areas had very profitable and loss making examples. There were indications for significant improvements that most growers can adopt to increase profitability. No one product or area stood out. However, good managers showed the highest probability of being profitable.

There are many outside factors that impact on prices growers receive. The ability to be well informed on the cost structure of the enterprise allowed timely management decisions

The project has created the opportunity to present the benefits of benchmarking and associated tools to many growers and has followed up by reporting findings to conferences and workshops

Final comment

There have been no benchmarking projects identified carrying out benchmarking on flowers.  Extensive literature searches have failed to identify any.

There are some good examples of horticultural industry benchmarking on an industry basis. These are useful for inter industry comparison and provide an incentive for the flower industry to follow suit.

 

2004 - Australia - RIRDC - Gerry Parlevliet
Read ArticleSave For Later

Related Resources