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TruGreen’s Loss is the Planet’s Gain

 

Company Suffering Massive Drop in Sales

The sad dalmatian is getting even sadder, just as the planet may see an inkling of good news.

While admitting earlier this month that it overvalued its bleeding behemoth lawn care division by nearly a billion dollars, ServiceMaster has told its investors to brace for what may be TruGreen’s worst financial performance on record.

In a press release last week, ServiceMaster, the owner of the world’s largest lawn service company, announced it was writing off $845 million of goodwill related to TruGreen, formerly known as ChemLawn. The maneuver is essentially an accounting procedure reflected only on the internal balance sheet and investor dividends, but that has also been compounded by a massive drop in customer counts and overall sales in 2012.

“The company expects that TruGreen’s full-year 2012 operating revenue will be approximately 10 percent to 12 percent lower as compared to its full-year 2011 operating revenue,” according tot the press release, which went on to state that “TruGreen’s full-year 2012 operating performance will be approximately 27 percent to 31 percent lower as compared to its full-year 2011 operating performance.”

Some industry analysts predict that overall TruGreen sales could fall below $1 billion for the first time since 2004. Adjusting for inflation and increases in the cost of fertilizers, pesticides and fuel during that time paints an obvious picture of a company in a slow, but sure decline.

A COMPANY IN TURMOIL, AN INDUSTRY IN DECLINE? OR BOTH?

“We will get TruGreen on track,” said a defiant Hank Mullany, the CEO of ServiceMaster who has personally taken on the role of getting his company’s largest subdivision off life support. ServiceMaster’s portfolio, held by a private equity firm, also includes financially healthy operations at Terminix, American Home Shield, Merry Maids, ServiceMaster Clean, AmeriSpec and Furniture Medic. Yet fixing TruGreen has been particularly elusive for the former Wal-Mart executive with no prior experience in lawn care.

“We’re number one in the professional lawn care service category and four times larger than our nearest competitor based on revenue,” said Mullany in the Nov. 14 press release. “We have the size and scale to invest in new technology and provide new, improved services. We’re already making changes to help drive sustainable, profitable growth at TruGreen.”

With customers rejecting synthetic chemical fertilizers and pesticides on an industry-wide basis, however, TruGreen faces the same challenge as Scotts Miracle Gro and others who are losing customers by peddling a toxic, fossil-fuel intensive program in an era of heightened environmental and personal health awareness. They simply can’t celebrate a natural organic approach without inherently damning their core business model based on toxic synthetic chemicals.

In other words, why do we even need an organic lawn program if there’s nothing inherently wrong with the synthetic chemical program?

TruGreen recently launched a “TruNatural” program in an attempt to meet the obvious consumer demand, but in its sales pieces and on the street the company admits the program costs more and “doesn’t work as well” as its “conventional” chemical program. By simply attempting a product-for-product swap and failing to admit to itself and its customers that organics is a completely different approach to growing grass, TruGreen is doomed to continued failure.

The other issue, inherent in TruGreen’s massive goodwill write-off, is lack of consumer trust. When you’ve been running the nation’s largest lawn chemical company for more than four decades, you’re also the biggest target when the stories proliferate about myriad pesticide poisonings and other health-related risks. Reports like Monday’s pesticide warning from the American Academy of Pediatrics fire the biggest daggers at a company like TruGreen with its massive fleet of rolling pro-pesticide billboards.

In the past year TruGreen hired an army of TKO Graphics technicians to paint the sad dalmatian off most of its trucks nationwide in favor of a “Go Greener” tagline. Consumers, however, clearly aren’t buying into the obvious greenwash. They’re smart enough to know that when the shiny new door opens where the dog used to scowl, it’s the same old poison inside the truck.

The silver lining in the story of a company that is neither true, nor green, is that far less toxic pesticide is getting purveyed and sprayed across the planet as a result. That ought to make the parents of children — and the owners of dogs — smile broadly.

 

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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  • Dsgustedjhgy

    Most people have full service lawn companies that apply the fertilizers and pesticides.
    Those that do it themselves are destroying the planet and wasting money using the Scotts 4 step plans that puts an inordinate amount of nitrogen on their lawns.

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