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Business Cheer
ENTREPRENEURS by Jean Gruss | Editor/Lee-Collier
Russ Whited has just three weeks to sell thousands of Christmas trees. He's got it down to a science.
Russ Whited is surprisingly calm for someone who has just three weeks to sell tens of thousands of Christmas trees.
Sitting back in a chair one day inside a warehouse on U.S. 41 in Fort Myers, Whited explains how the three weeks between Thanksgiving and Christmas can make or break his ultra-short season. Every once in a while he barks out an order to an employee who scurries into the small forest of fir trees gathered from Oregon, Michigan and North Carolina.
Meanwhile, much to Whited's dismay, competitors he derisively calls "gypsies" have put up brightly lit tents and aim to steal some of his business. It's not charitable organizations Whited gets upset about, it's the guys who try to make a fast buck without a proper license and easily outrun overburdened law enforcement officers.
In fact, Whited got his start in the business by volunteering as a young man to sell Christmas trees for the local Optimist Club. Now, he supplies many of these organizations with truckloads of trees.
We're not talking about a little tree-farm operation here.
Whited won't say exactly how many trees he sells during Christmas for fear of alerting competitors, but he says it's well in excess of 25,000. He won't reveal any financial information for the company he's owned for 37 years. But he supplies over 300 retail outlets in the Southeast and more overseas in places such as Bermuda, Grand Cayman and Honduras.
Whited says he learned the key to running a successful business from his father, a German immigrant who owned a butcher shop. "To be successful you have to have a good product, present it properly, offer a fair price and the customer is always right," he says.
The trickiest part is getting the "good product" part right. Whited has turned to science to help him make sure the trees get to places like Florida alive. For example, Whited paid $15,000 to University of Oregon scientists to determine the best temperature for the trees when they're being transported by refrigerated truck across the country. Don't bother asking him for that magic number; he won't tell you.
Christmas trees are almost recession-proof. Despite the economic downturn, Christmas trees are one of the last things people will do without. Whited remembers the Christmas of 1974, during the height of the oil crisis. People bought trees despite the lousy economy and long gasoline lines.
Plus, everyone has a fond memory of childhood Christmas trees. Whited remembers lying on his parents' linoleum floor and counting the pine needles as they fell off the tree.
Still, the business has changed over the years. Prices for land, fertilizer and fuel have all risen substantially and there are fewer service organizations selling Christmas trees. Fake trees have made some inroads, though Whited sells some of those too. It's still a profitable business, but "we don't make the money we used to make," Whited says.
Whited has diversified his tree operation into other areas. These include commercial decorating during the holidays and firework sales during the summer months. That way he's not so dependent on the three weeks that lead to Christmas.
From phone poles to Christmas trees
Whited, now 78, was a hatchet man, in more ways that one. He came to Fort Myers about four decades ago to help turn around the local telephone company that was struggling to collect on unpaid bills. His job was to enforce collections from business customers who hadn't paid a phone bill in years.
Back then, utilities, banks and other businesses often required their employees to be part of charitable organizations. It was a good way to network with other executives while performing good deeds.
It was while he was selling trees for the Optimist Club that Whited realized there was money to be made. Although he was a phone company man, he had long harbored a passion for farming.
Besides, the wealthy people in town back then were all farmers. Whited had farmer friends who were members of the Rod and Gun Club on State Road 80 who gathered weekly for steak dinners and gambling. It seemed the farmers were the ones who put the big money on the craps table. "I wanted to get into that business," says Whited, noting he's never been much of a gambler.
It's hard to imagine now, but in those days you could get a bank loan with just a handshake. Whited started growing watermelons with a bank loan on 55 acres he leased in Bonita Springs.
While growing watermelons, he learned a valuable lesson from the county agriculture extension office: If you left the dry seeds in water for a few days, they'd germinate better once they were planted. More important, he learned that science could boost profits.
In the 1970s, Whited purchased 55 acres in North Carolina where he planted Christmas trees. He got a good deal as land prices there had fallen and he was able to pay 43 cents on the dollar for the land.
Whited immediately went to work applying science to the growing of his trees. Instead of planting 1,800 trees per acre, he reduced the density to as little as 1,250 trees per acre. That allowed the trees to grow better and let workers move easily between the trees to fertilize them and prune the shoots so that the foliage was evenly spread.
"I figured out how we could grow a better product," Whited says.
With the help of scientists at the University of Oregon, Whited figured out the best temperature to set when the trees are transported in refrigerated trucks. To keep them fresh, workers make sure the trees are upright and standing in water when they're traveling. "You learn that by working with the universities," says Whited.
Rising costs, new opportunities
Despite the short selling season, Whited's work starts at the beginning of the New Year. He begins by negotiating with truck companies he's worked with for years.
"We used to dictate what we'd pay per mile, but those days are gone," Whited says. That's because the price of fuel has been so volatile that truckers won't commit to a fixed rate. It costs from $6,700 to $7,300 to ship a load of trees from Oregon, where Whited pays a contract grower for the prized Noble Fir.
This volatility in transportation costs makes it difficult to price trees to customers and to make an accurate budget. That's especially tough because Whited can't tell service-club customers exactly what a load of trees will cost them.
Whited says he's lost some service-club customers because of that. Instead, these groups will organize a different fundraiser, such as a golf tournament. He's made up some of that lost revenue with parochial schools that need to raise money to keep tuition reasonable or take an expensive educational trip.
The cost of fertilizer and weed killer has risen dramatically also, rising from $35 a gallon a few years ago to $150 a gallon today. Much of that cost is due to environmental regulations, Whited says. "Mexico has no rules on chemicals," he notes.
Competition is always a problem. Whited has 300 retail customers spread all over the Southeast, but it's tough keeping them supplied. He lost seven customers recently in the St. Petersburg area when they decided they could buy trees from someone else or grow their own.
Some of that revenue has been offset by growth in international business. He ships trees in 40-foot containers to Honduras, Bermuda and the Cayman Islands, among other places. The great thing about international customers is that they pay in advance.
Whited has diversified into other areas related to holidays. One is commercial decorating. For example, Whited decorates buildings and streets in Southwest Florida with festive lights and ornaments. They started in August and it keeps his employees working through late summer into the holiday season.
Another area of expansion is fireworks. Whited fills his warehouse on U.S. 41 with fireworks for the July 4 holiday in the summer time. That part of his business has grown to 30% of the company's annual revenues. "My son, Chris, is a fireworks connoisseur," Whited says.
It's just important to keep the fireworks separate from the Christmas trees.
REVIEW SUMMARY
Entrepreneur: Russ Whited
Industry: Agriculture
Key: Sell a good product, present it well, offer a fair price and remember the customer is always right.
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