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Miracle Gro Sales Continue to Plummet

Are consumers waking up to the general wastefulness and toxicity of the chemical lawn care industry? Based on the ongoing decline in the finances of the world’s largest purveyor of synthetic fertilizers and pesticides — coupled with the increase in the sales of organic products — all indications point to a major market shift.

Scotts Miracle-Gro announced earlier this week that it will likely lose $70 to $75 million in the fiscal quarter ending Dec. 31 — which is considered its first quarter of 2012. Scotts always loses money this time of year, but this year’s loss is approximately $10 million more than last year for the same period. That follows a year (2011) in which the company’s global consumer sales dipped by more than 9 percent, according to information published by Scotts in November.

The company publicly blames its demise on weather-related issues, as well as increasing commodity costs related to the rising costs of fossil fuel. Chief Financial Officer David Evans admitted the price of synthetic chemical fertilizer has increased approximately 50 percent in the past five years, but told market analysts that a bag of Miracle Gro won’t go up in price this year as the company tries to retain its shrinking market share.

As recently as November, Scotts CEO Jim Hagedorn defiantly predicted that sales would rebound in 2012. Based on the recent losses — along with a sharp drop in the company’s stock price to less than $44 from a high of $60 earlier this year — Hagedorn will now have to hedge his bets.

“We’ll provide (financial) guidance to our investors in February,” he said recently. “We need to evaluate the continued variability of commodity costs and work is still being done to finalize next year’s marketing plans.”

Meanwhile a survey of sales in the organic sector point to an approximately 20 percent increase in fertilizers and natural pesticides in the U.S. Numerous companies continue to jump into the natural market and even the dinosaurs like Scotts and TruGreen (ChemLawn) now offer natural alternatives.

All of this follows a worldwide trend back to the future.

Honesto Baniqued Jr., president of the National Agribusiness Corporation of the Philippines, said the efficacy of organic offerings has improved in recent years just as understanding of the products has skyrocketed globally.

“We’re seeing a 35 percent increase in yields with a switch to an organic fertilizer,” he said. “The use of (synthetic) fertilizer is scandalous and unnecessary.”

Well said.

About The Author

Paul Tukey

An international leader of the green movement, Mr. Tukey is a journalist, author, filmmaker, TV host, activist and award-winning public speaker, who is widely recognized as North America's leading advocate for landscape sustainability and toxic pesticide reduction strategies.

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