Scott’s Miracle-Gro Eyes Gen Z Growth and E-Commerce Expansion

J.D.: All right, let's say hello to our third and final guest on the broadcast. This is Nate Baxter, president and COO of the one and only Scott's MiracleGro. Just got off the podium here at the big board, ringing the closing bell to bring it back to close to trading today. Welcome to the show. Nice to have you.

Nate: Thank you for having us.

J.D.: First of all, can I get your experience not just of doing the closing bell, but I was stunned to sit down here at 3:50 p.m. right before the bell. And I said, wait a minute, is that Martha Stewart who just walked here on the floor? What is the relationship with Martha Stewart and what was it like today?

Nate: Well, first of all, today was outstanding. You know, being able to celebrate 30 years on the exchange and look forward to the next 30 is just a blast. And when you put it in the context of where we're trying to take this business and modernize it, it's all that much more special. What I'll say about Martha is she's our chief gardening officer. She is outstanding. And I think it's important for people to know she's not just sort of our creative and educational talent. She's actually a meaningful partner on the business side in terms of product portfolios, strategy. So and she's just wonderful to work with.

J.D.: Absolutely. I got no doubt about any of those things, especially her business prowess, which she brings, to which she brings to the operation. You talk about your opportunities to grow, to continue to scale, grow, no pun intended, but let's throw it in. What does that look like for you, especially in a little bit of a challenging macroeconomic backdrop? The word of the year continues to be uncertainty, Hey, you got a business to run?

Nate: We do. And I'll start by saying that traditionally, our business has been pretty resilient to downturns and recessions. You know, it's a pretty low cost way for people to enjoy their time at home and their green spaces. So we're sort of lucky in that sense. When we look to the future. You know, we really see a massive amount of opportunity. You know, we didn't really have to hunt for inorganic growth. We've got household penetration even for our biggest categories. It's only around 10%. And the DIY market. So just that alone is tremendous opportunity. We've got a new generation of consumers starting to become homeowners between Gen Z and some of the younger millennials. That's a big opportunity. And you'll see us pivot with more organic and naturals, which is sort of what that consumer wants.

And then there's e-comm. You know, our market share in brick and mortar is north of 50%. Our market share in totality in E-comm is less than 15%. So when I look at those factors, I see a tremendous amount of opportunity for organic growth

J.D.: So I'm 38 years old, I'm a millennial. I got a lot of people my age. They are first time or would be home buyers for the first time entering the market. Do you have to stick with the old core values that have always worked for the brand? Or to your point, how do you evolve as younger would be home buyers are entering the market. Different concerns, different backgrounds, but ultimately maybe a lot of those same goals in terms of lawn care?

Nate: No doubt. Without a doubt. Listen, I think everybody has the same goal, whether it's the esthetics, more and more it's about being out in that green space for wellness, whether it's mental or physical. you're right. You know, you as a consumer is very different from our baby boomer sort of core consumer today. They care more about efficacy. They care more about results. There may be more willing to put down a synthetic fertilizer. I think the younger generation has two challenges. One, we're trying to make sure we have products that meet their needs, the natural and organic, too. We have to educate them. I don't know about you, but I learned this from my father.

But not everybody had a, you know, a family environment where they learned about lawn and garden care. And so one of the imperatives for us, and that's part of what Martha is here to help us do, is how to educate consumers. And of course, we'll do it not only through spokespeople like Martha, but we'll use AI tools and other other approaches to sort of get people engaged and help them learn how to use the products, because that that is a friction point, and we need to make that easier.

J.D.: I'll tell you, I live in a fifth floor walkup in Queens, New York. I wish I could have a nice lawn and garden to care for day to day. It's one of those things that connecting with nature, connecting with the outside, having ownership over your own space. I miss it, so I wish you the best of luck for all your consumers out there.

Nate: Yeah. Thank you. And by the way, you can still do that. You can just have indoor gardening.

J.D.: Yes. Indoor gardening. We'll have you back to talk about that. Nice to have you on the broadcast. Thanks for joining us.

Nate: Thank you so much.