About The Scotts Miracle-Gro

The Scotts Miracle-Gro Company engages in the manufacture, marketing, and sale of products for lawn, garden care, and indoor and hydroponic gardening. The company's products are sold in North America, Europe and Asia. Through its U.S. Consumer and Other segments, the company is the leading manufacturer and marketer of branded consumer lawn and garden products in North America. The company's products are marketed under some of the most recognized brand names in the consumer lawn and garden industry. The company's key consumer lawn and garden brands include Scotts and Turf Builder lawn fertilizer and Scotts grass seed products; Miracle-Gro soil, plant food and gardening products; Ortho herbicide and pesticide products; and Tomcat rodent control and animal repellent products. The company is the exclusive agent of the Monsanto Company, a subsidiary of Bayer AG (Monsanto), for the marketing and distribution of certain of Monsanto's consumer Roundup 1 branded products within the United States (U.S.) and certain other specified countries. In addition, the company has an equity interest in Bonnie Plants, LLC, a joint venture with Alabama Farmers Cooperative, Inc. (AFC), focused on planting, growing, developing, distributing, marketing, and selling live plants. Through its Hawthorne segment, the company is a leading manufacturer, marketer and distributor of lighting, nutrients, growing media, growing environments and hardware products for indoor and hydroponic gardening in North America. The company's key brands include General Hydroponics, Gavita, Botanicare, Agrolux, Gro Pro, Mother Earth, Grower's Edge, HydroLogic Purification System and Cyco. The Scotts, Turf Builder, Miracle-Gro, Ortho and Roundup brands make the company the most widely recognized company in the consumer lawn and garden industry in the United States. Segments The company operates through U.S. Consumer, Hawthorne, and Other segments. U.S. Consumer: This segment consists of the company's consumer lawn and garden business in the United States. Hawthorne: This segment consists of the company's indoor and hydroponic gardening business. Other: : This segment consists of the company's consumer lawn and garden business in Canada. Products and Services In the company's reportable segments, it manufactures, markets and sells lawn and garden products in the following categories: Lawn Care: The lawn care category is designed to help users grow and enjoy the lawn they want. Products within this category include lawn fertilizer products under the Scotts and Turf Builder brand names; grass seed products under the Scotts, Turf Builder, EZ Seed, PatchMaster and Thick'R Lawn brand and sub-brand names; and lawn-related weed, pest and disease control products primarily under the Scotts brand name, including sub-brands, such as GrubEx. The lawn care category also includes spreaders and other durables under the Scotts brand name, including Turf Builder EdgeGuard spreaders and Handy Green II handheld spreaders. Gardening and Landscape: The gardening and landscape category is designed to help consumers grow and enjoy flower and vegetable gardens and beautify landscaped areas. Products within this category include a complete line of water-soluble plant foods under the Miracle-Gro brand and sub-brands, such as LiquaFeed, continuous-release plant foods under the Miracle-Gro brand and sub-brands, such as Shake 'N Feed; potting mixes, garden soils, ground cover and mulches under the Miracle-Gro, Scotts, Hyponex and Earthgro brand names; plant-related pest and disease control products under the Ortho brand; organic garden products under the Miracle-Gro Performance Organics, Miracle-Gro Organic Choice, Scotts, Whitney Farms and EcoScraps brand names; and live goods and seeding solutions under the Miracle-Gro brand. Hydroponic and indoor gardening focused growing media and nutrients products are marketed under the Mother Earth, Botanicare, General Hydroponics and Cyco brand names, as well as brands owned by third parties for which the company serves as distributor. Hydroponic Hardware and Growing Environments: This category is designed to provide durable goods to grow plants, flowers and vegetables using little or no soil. Products within this category include growing systems, trays, fans, filters, humidifiers, dehumidifiers, timers, instruments, water pumps, irrigation supplies and hand tools, and are marketed under the Botanicare, Gro Pro, AeroGarden and HydroLogic Purification System brand names, as well as brands owned by third parties for which the company serves as distributor. Lighting: The lighting category is designed to provide growers a complete selection of lighting systems and components for use in hydroponic and indoor gardening applications. Products in this category include lighting sensors, controls, fixtures, reflectors, lamps, cords and hangars, and are marketed under the Gavita, Agrolux and Titan brand names, as well as brands owned by third parties for which the company serves as distributor. Controls: The controls category is designed to help consumers protect their homes from pests and maintain external home areas. Insect control products are marketed under the Ortho brand name, including Ortho Max, Home Defense and Bug B Gon sub-brands; rodent control products are marketed under the Tomcat and Ortho brands; selective weed control products are marketed under the Ortho Weed B Gon sub-brand; and non-selective weed killer products are marketed under the Groundclear brand name. Hydroponic gardening focused controls products are marketed under the Alchemist and General Hydroponics brand names, as well as brands owned by third parties for which the company serves as distributor. Marketing Agreement: The company is Monsanto's exclusive agent for the marketing and distribution of certain of Monsanto's consumer Roundup branded products in the United States and certain other specified countries. Effective August 1, 2019, the company entered into the Third Amended and Restated Exclusive Agency and Marketing Agreement (the Third Restated Agreement) pursuant to which the company provides certain consumer and trade marketing program services, sales, merchandising, warehousing and other selling and marketing support for certain of Monsanto's consumer Roundup branded products. The company also performs other services on behalf of Monsanto, including manufacturing conversion services, pursuant to ancillary agreements. Principal Markets and Methods of Distribution The company sells its products through its direct sales force, e-commerce website and its network of brokers and distributors primarily to home centers, mass merchandisers, warehouse clubs, large hardware chains, independent hardware stores, nurseries, garden centers, e-commerce platforms, food and drug stores, indoor gardening and hydroponic product distributors, retailers and growers. The majority of the company's shipments to customers are made via common carriers or through distributors in the United States. The company primarily utilizes third parties to manage the key distribution centers for its consumer lawn and garden business, which are strategically located across the United States and Canada. For its Hawthorne business, the company primarily self-manages distribution centers across the United States and Canada. Trademarks, Patents, Trade Secrets and Licenses The Scotts, Miracle-Gro, Ortho, Tomcat, Hyponex, Earthgro, General Hydroponics, Gavita, Botanicare, Agrolux and Mother Earth brand names and logos, as well as a number of product trademarks, including Turf Builder, EZ Seed, Organic Choice, Home Defense Max, Nature Scapes, and Weed B Gon Max are registered in the United States and/or internationally and are considered material to the company's business. Seasonality The company's North America consumer lawn and garden business is highly seasonal, with approximately 75% of its annual net sales occurring in its second and third fiscal quarters combined. The company's annual sales for this business are further concentrated in its second and third fiscal quarters by retailers who rely on its ability to deliver products closer to when consumers buy its products. The company anticipates significant orders for its North America consumer lawn and garden business for the upcoming spring season will start to be received late in the winter and continue through the spring season. Historically, substantially all orders have been received and shipped within the same fiscal year with minimal carryover of open orders at the end of the fiscal year (year ended September 30, 2023). The company's Hawthorne segment is also impacted by seasonal sales patterns for certain product categories due to the timing of outdoor growing in North America during its second and third fiscal quarters, and the timing of certain controlled agricultural lighting project sales during the company's third and fourth fiscal quarters. Customers The company's top two retail customers, Home Depot and Lowe's, together accounted for 47% of its fiscal 2023 (year ended September 30, 2023) net sales and 41% of its outstanding accounts receivable as of September 30, 2023. Competition In the lawn and garden, pest control and indoor gardening and hydroponic markets, the company's products compete against private-label, as well as branded products. Primary competitors include Spectrum Brands Holdings, Inc.; Central Garden & Pet Company; Kellogg Garden Products; Oldcastle Retail, Inc.; Lebanon Seaboard Corporation; Reckitt Benckiser Group plc; FoxFarm Soil & Fertilizer Company; Nanolux Technology, Inc.; Sun Gro Horticulture, Inc.; Advanced Nutrients, Ltd.; SBM Life Science Corp.; Woodstream Corporation; Sunday Lawn Care; and Hydrofarm Holdings Group, Inc. In Canada, the company faces competition in the lawn and garden market from Premier Tech Ltd. and a variety of local companies, including private label brands. Research and Development For the fiscal year ended September 30, 2023, the company's research and development expenses were $35.7 million. Regulation The company's grass seed products are regulated in the U.S. by the Federal Seed Act and various state regulations. History The Scotts Miracle-Gro Company was founded in 1868.