Recession Proves Fertile Ground for Scotts

Miracle-Gro Maker Reaps Bounty as More Turn to Vegetable Gardens

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Hope springs eternal at the Scotts Miracle-Gro Co. -- and not because the growing season came early in much of the country. A vegetable-gardening boom spawned largely by the recession is blossoming into enduring behavior paying dividends for the company.

Early spring throughout much of the U.S. has lawnmowers fired up and people headed to garden-supply stores for planting weeks ahead of schedule. A break in the drought in Texas has returned that huge state to the market for gardening products. That's had Scotts Miracle-Gro moving up production and shipment schedules as well as TV, radio and online-media plans by weeks.

The better news for Scotts isn't about the vagaries of weather, but something more permanent. For the first time in the recent National Gardening Association survey, growing fruits and vegetables emerged as the top reason that people garden -- supplanting growing flowers or beautifying the home, said Tom McLoughlin, VP-gardens and landscapes.

As people "participate in vegetable gardening for the first time, that becomes almost an annuity for our business," Mr. McLoughlin said. "We've seen people participate in subsequent years in deeper ways, planting more vegetables and broadening their horizons."

Of the 80% of Americans who do some kind of gardening, about half use Miracle-Gro, so anything that grows the category helps the dominant player.

It's welcome news for Scott's, which suffered through last year's wet spring, the Lone Star State drought, rising commodity costs and the lingering effects of a poor economy on consumer spending.

Or as Scotts' Chairman-CEO Jim Hagedorn told analysts and investors in February, from a profit-and-loss standpoint, 2011 "clearly was a shitty year."

Those valleys make for fertile ground, of course, and favorable year-over-year comparisons. Miracle-Gro hopes to capitalize on pent-up demand.

Last year "washed a lot of people out of the marketplace," Mr. McLoughlin said, with many consumers, unable to plant until May or June, not even trying. "We do see people planting earlier this year," he said. "And after last year I think people are more inclined to do it as soon as they can. There's a certain degree of cabin fever that gardeners or aspiring gardeners have. "

Miracle-Gro is looking to expand the market with a campaign from Dentsu America, "Gardener Stories," featuring couples' quirky, homespun tales.

"It makes gardening less ominous and more approachable," said Jack Bamberger, Dentsu's chief consumer engagement officer.

In late March, Miracle-Gro launched a program on Zynga's FarmVille that offered a branded area where people could earn virtual currencies and got Miracle-Gro tomato plants or spray bottles. Mr. Bamberger said that 80% of FarmVille players also garden and that 85% would like to grow their own vegetables.

"We've pulled media dollars up to participate in an early spring," Mr. McLoughlin said. The brand is spending "significantly more" this year, he added, with the extra devoted entirely to digital.

Last year Miracle-Gro spent $63 million on measured media, including $40 million on TV and $1.6 million on internet display, according to Kantar Media, whose web data don't include Facebook, search or the full cost of behavioral targeting.

"We've made a big shift this year in spending a lot more in digital" across Scotts, said Patti Ziegler, global VP-marketing and communications. Given the problem-solution nature of its business, the company is putting dollars into search particularly.

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