Cover Story: Preserving the past, focusing on the future

Story by Michelle Simakis

Photography by Becca Dilley

Dale Bachman calls his great-grandfather’s ledger book a “prized possession.”

The relic dates back to 1885, when Bachman’s founder, Henry Bachman Sr., chronicled the financial life of the Minneapolis-St. Paul, Minnesota-based company’s first few years in business. The handwritten entries include profits from 36 dozen heads of lettuce ($12.75,) and how much a ton of coal would set you back ($3.50-$4.25), when the business grew and sold produce.

“He was not only a good farmer, but he had a good business background,” says Bachman, CEO and fourth-generation family member.

Bachman had the book professionally preserved, and treasures it and other pieces of the past, such as old photographs of the business. One story he likes to share is about how his great-grandfather encouraged his sons, who later became second-generation owners, to each grow their favorite crop in a designated space in the greenhouse. All of the boys planted vegetables except for Dale Bachman’s grandfather, Albert, who decided to cultivate flowers because he knew they were his mother’s favorite.

“He did the research and built the first carnation house and got us started in growing flowers and plants,” Bachman says. “And then eventually he convinced his brothers to convert from vegetables to flowers and plant production.”

Henry Bachman Sr., an adept businessman and grower, also knew the importance of cultivating his family’s passion for the business to spur creativity and development.

Bachman’s is now led by some family members from the fourth and fifth generations, and just like 130 years ago, each has his or her own interests and skills, and those are honored and molded into various roles.

“I really appreciate the fact that I always had the opportunity of working in this company in some aspect if I wanted to, but it was never presented that you needed to,” says Susan Bachman West, a fifth-generation family member and vice president of perishable merchandising and floral design, who originally pursued a career in biological sciences. She and the other fifth-generation leaders — Adam and Karen Bachman Thull — are cousins, and Dale is also their cousin. “I made that decision on my own, and that’s what’s so fabulous and beautiful about it. Maybe it took me longer, but I have so much passion for it now because it’s truly what I desire.”

When thinking about long-term planning, the Bachman family understands that while you have to be future-focused and strategic, preserving, honoring and learning from the past is an important and essential part of the process.

Purpose and priorities

Planning and organization is key when you have a company as large as Bachman’s. There are 35 retail locations, which includes six garden, floral and home centers, 28 outlets at the grocery store chain Lunds & Byerlys, and a floral, gift and card store in downtown Minneapolis. They also operate a nursery wholesale center, and overall, they conduct annual budget planning for 85 departments, Bachman says.

Long-term planning thus revolves around what will enhance the customer experience, and the company’s purpose statement helps guide all decisions.

“We say we’re enhancing your lifestyle by transforming moments to memories and everyday spaces to amazing places. And we work with our guests on the floral side of the business at some of life’s most special times, whether it be a birth or a birthday or an anniversary or death, we’re there,” Bachman says. “We’ve had a long history of really making visual merchandising a priority within the store. Hopefully when people walk in, they get ideas and they get inspiration.”

Keeping that in mind, they also look at how long it will take for their investment to pay off and impact the customer, says Bachman West.

“If something has a very short payback, a payback of a year or less, well then we should go ahead and do it,” she says. “Or maybe the payback takes a couple more years, but in the long run, it would get you to a better place or would provide a better customer experience or would let you grow the business in a different way. Those [ideas] might go a little higher on the priority list then something that’s a nice to have, but not necessary. We go through a strategic planning process [where] no idea is a bad idea. We lay them all out there.”

For example, Bachman’s was quickly running out of space to produce perennials in hoop houses, so this past fall, they decided to invest in more facilities to produce a higher quality crop.

“Putting up a few more hoop house structures was a small cost compared to what we could grow in them and the sales that we would get,” Bachman West says. “This spring, we’ll be excited that the perennials in our retail stores and wholesale division will be a very hefty percentage of Bachman-grown product, which is what customers desire.”

Making and modifying plans

Most advisers suggest looking at five-year windows when conducting strategic plans, but Bachman says he’s modified that.

“Change is coming so rapidly now,” he says. “We used to think in terms of five years, but now we tighten that up to three just because the market changes so quickly.”

Timelines also depend on the type of planning. Production planning happens throughout the year, generally right after the season when the performances of products and plants are fresh in their minds, Bachman West says.

“We just finished Christmas, and next week [early January] we’re planning the poinsettia crop for 2016,” Bachman West says. Bachman’s grows nearly all of the poinsettias it sells. “When we’re talking about actual planning for product, it’s always best to do it right after you’ve lived that season so it’s fresh in your mind.”

But there’s a time and a place for planning meetings, and that’s certainly not in the “heat of spring,” Bachman West says.

Other kinds of investments, like technology, have longer planning timelines.

“We had been on our POS system for a very long time. We had a great provider, but it was time to go to market and update that system,” Bachman says. “We did that in 2014, and it really took us probably a little longer than we had anticipated to get it to work the way we needed it to work. And we’re in a better position now at the end of 2015 then we were in 2014. Now it’s time to make the next big technology investment.”

The POS update was essential because of the variety of functions the system serves.

“We would consider a POS system to be part of inventory management,” Bachman says. “What our new POS system has allowed us to do is to really track our margins more effectively than we have in the past. Instead of necessarily focusing on growing sales, we really have tried to focus on growing our net margin. It doesn’t always mean that you’re raising prices, certainly we’re watching price and making those judgments, but inventory management in terms of controlling mark downs is a way to increase the bottom line.”

Next up is revamping their website and e-commerce system. As a floral and garden center, online sales and delivery are essential pieces of their business. (You can read more about their delivery system on page 78 of the November 2015 issue.)

It’s also a key to staying relevant to Millennials and the up-and-coming Generation Z, who increasingly make purchases not only online, but on their smart phones.

“We do [provide garden center delivery] to the extent that we do the traditional cut flower arrangements, and that is something that we are looking to grow and provide a bigger presence for that on our website,” Bachman West says. “But right now, the products that are online are the tried-and-true and most common.”

Another important aspect is learning from the past. Their POS system is an essential tool to understanding what performed well and what didn’t.

“We look at our sales, at our spoils, and we also look at what’s actually shipped out of our growing facility as well,” Bachman West says. “Those numbers are concrete, and then you would change the numbers [to account for] a new variety coming out next year, or if weather was favorable or unfavorable. We start 100 percent with POS numbers in the beginning. It takes all of the emotion out of it.”

After they look at the numbers, they consider other factors from the past to determine how to best move forward.

“We do our business planning by major revenue division, so it’s a matter of looking back over history and what the trends are, and then recognizing those areas where we have to do better and identifying those strategies,” Bachman says, adding that they have a yearly look at the business, separate from long-term planning. “We’re not going to accomplish all of these things in one year. We have to ask ourselves, as a business that we intend to stay in, how is it trending? We started with our major revenue divisions [for 2016,] and in this round we’re updating those plans as we speak. We’ve added in several of our support areas as well. We are vertically integrated, so we’ve got revenue divisions but also delivery and warehousing. We also have our production operations that we do business plans for, those areas where we’re including our marketing and advertising department in the planning process.”

Bachman’s reviews strategic plans annually and makes necessary changes based on what they’re seeing in the market. Jeff Burch, managing director and team lead of Bank of the West’s Nursery-Greenhouse Group, says being willing to modify plans is essential to having successful long-term goals.

“The biggest mistake we see ownership making is they are assuming that things are going to continue as things have in the past,” Burch says. “The better a company is focused on doing some sort of review process once a year, assessing what is changing, what could change, what impact it could have on the business —that’s really the key.”

The right people

Bachman’s is proud of its long, family-owned history, as evidenced by how lovingly the family has preserved the past and detailed its story on the website.

But Bachman says family members make up a minority of the company, which has about 1,100 employees at peak.

“It’s important to have the family active in the business, but it takes non-family leadership and team members to make it happen,” he said. “I think looking ahead, it would be great to always see family engaged in this business, but this business has made it as long as it has primarily through the great people who have worked at Bachman’s who aren’t direct members of the family.”

When Paul Bachman, president, announced he would retire this spring, a search for his successor began in early 2015. The company recruited Sherri Eriksrud, who previously managed the downtown Minneapolis Macy’s for more than a decade and serves as vice president of retail operations and services.

“Succession planning is going on really all of the time within the organization,” Dale Bachman says. “It takes that mix of family and non-family leadership, which is why we went to the market.”

Finding qualified crew leaders to replace retiring veterans for the landscape services division has been a challenge, however, he says. They’ve always worked locally with two- and four-year colleges, but for the past three years, they’ve also traveled outside of the state to Iowa, Wisconsin and North and South Dakota.

“There has been almost a bit of a forced downsizing [in the exterior landscaping department] just because of the difficulty of replacing retiring crew leaders. So there’s an example of a business that’s smaller today because of the challenge of finding qualified, talented people,” he says.

They’ve partnered with the Minnesota Nursery and Landscape Association to find solutions and create career development opportunities, however.

“Within our Minnesota Nursery and Landscape Association, we actually have a curriculum that we can offer high schools to encourage students to learn about horticulture, and hopefully become engaged,” he says. “The whole industry has to do a better job of talking about the satisfaction that comes from working in the industry. We still don’t pay as well as some other industries. And I think we have to go out and talk about the benefits of a career in horticulture.”

Adapting and evolving

The Bachmans say they hope there will always be some family members working in the business, but the sixth generation is far too young to try to predict their futures.

“My children are 7 and 10. Their dreams and ambitions change every hour, as they should,” Bachman West says. “But they know what Bachman’s is. There’s a lot of pride in the family for what the previous generations have done in this community and the company that they have built, and that, first and foremost, you want to get across to that next generation.”

They also take pride in sharing their family history with customers. A historic home on the company’s Lyndale site built by Arthur Bachman Sr. and his wife, Ernestine, in the 1920s was transformed in 2010 into an “ideas house,” fully furnished with displays of antique and vintage items as well as new products, most priced and available to buy in store. The décor (and paint) changes three times a year with the major seasons. One dollar of the proceeds from the $5 tickets goes to a local charity each season, and at the end of 2015, Bachman’s had raised $117,000 since its first year. The house gives customers inspiration and doable ideas for how to use Bachman’s products in their own homes — and in 2015 alone, they sold 21,000 tickets.

But Bachman’s is also very much focused on the garden, and, as Bachman puts it, “The party has moved outside.”

“We got into the hardscapes business a few years ago, selling hardscape products to landscape contractors and so forth,” Bachman says. “That whole aspect of garden rooms has become so much a part of a person’s initial investment. That deck or that patio comes first, and the plant material follows, so it’s been an area of growth. That idea of gardentainment, entertaining outside has grown, even in our seasonal climate.”

Just like for many garden centers, beekeeping and container and vegetable gardening are on the rise, giving customers more reasons to shop at Bachman’s. The company also offers workshops and events to attract people seasonally — such as hosting a winter farmers market. Customers seem to be motivated to shop locally, too, which Bachman hopes will continue to grow.

“We are, in addition to being a labor-intensive business, we are a capital-intensive business,” he says. “We have to prioritize because we really have unlimited needs and limited resources. Somehow we have to bring those two together.”