Today: With market share in the U.S. of approximately 54 percent, about 68 percent of ScottsMiracle-Gro sales reside in our core North American segment, where our industry-leading brands are sold through leading home centers, mass merchants and thousands of independent garden centers and nurseries.

Tomorrow: By increasing our investments in advertising and continuing to strengthen our sales force and supply chain, ScottsMiracle-Gro strives to drive consumers to these retail channels in increasing numbers. This will help propel the overall lawn and garden category while allowing ScottsMiracle-Gro to further drive shareholder value by capturing a majority of that growth.



The goal: Build an Enduring Franchise 1 of 6  
The strategy:   Gro the core business by owning the relationship with consumers

Building an enduring franchise means creating a relationship with the consumer that is unrivaled by the competition. We enjoy such a competitive advantage today in our North American consumer business.

The strength of this business was obvious in 2005 as our North American business grew sales by 6 percent and improved operating income by 12 percent. Our relationship with the consumer was critical in achieving that performance. It resulted in a 7 percent increase in consumer purchases of ScottsMiracle-Gro products, with improvements in every major category in which we compete, as well as market share improvements for each of our leading brands – Scotts®, Miracle-Gro®, Ortho® and Roundup®.

  The key to our continued success with consumers is two-fold. First, it is based on understanding their desire to more easily succeed in the lawn or garden. Second, it is based on trust, which we have earned throughout the years by clearly communicating with consumers and offering them superior products.

In 2005, our communications were delivered through nearly $100 million in advertising, keeping our share of voice in the category at about 85 percent. We know that creating an enduring franchise will require this investment to rise. In 2006, we plan to increase our advertising spending by about 20 percent as we move toward our goal of an advertising-to-sales ratio of 7 percent.


While some have speculated that the benefits of television advertising have waned in recent years, we continue to see a direct correlation between our television advertising and consumer purchases of our products. The combination of superior products that are supported by effective advertising has been powerful for ScottsMiracle-Gro.

  For example, purchases of our value-added Growing Media products, which help consumers grow plants that are larger and healthier, increased 14 percent in 2005. Miracle-Gro Garden Soil, which benefited from a significant increase in advertising, had a 50 percent increase in consumer purchases.

®Roundup is a registered trademark of Monsanto Technology, LLC.


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