Scotts Miracle-Gro CEO Nate Baxter Talks Growth Strategy

Summary

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Bloomberg Talks: Scotts Miracle-Gro CEO Nate Baxter Talks Growth Strategy

Date: August 4, 2026
Host: Bloomberg Interviewer
Guest: Nate Baxter, CEO & President, Scotts Miracle-Gro

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Episode Overview

This episode features an in-depth discussion with Nate Baxter, the newly-appointed CEO and President of Scotts Miracle-Gro, focusing on the company’s refreshed growth strategy, financial targets, and innovation priorities as outlined on Investor Day. The conversation delves into how Scotts Miracle-Gro plans to achieve sustainable growth amidst macroeconomic volatility, adapt to evolving consumer behaviors, and innovate for future market opportunities, particularly with younger and non-homeowner segments.

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Key Discussion Points & Insights

1. New Growth Targets and Growth Philosophy (00:38–01:41)

• Investor Day Announcements:
  • Scotts Miracle-Gro unveiled new mid-range financial targets: average annual adjusted EPS growth of 5-8% between FY2027 and FY2029.
  • This is part of what Baxter calls a “growth algorithm with legs into 2029.”
• Baxter on Consistency and Strategy:
  • Although newly CEO, Baxter conveys stability:

    “The underlying strategy is still consistent with what I've been talking [to investors] for the better part of two years.” (01:19)

• Conservative Yet Confident Approach:
  • The company is intentionally conservative due to market volatility:

    “It's sort of in the sweet spot of a value investor... We've had a lot of volatility in the markets, a lot of events... So our point of view is we're going to be fairly conservative, but we are going to turn into a growth company.” (01:41)

    • Focus for now is capital allocation and leverage reduction.

    “Our focus right now... is getting that leverage down a little bit.” (01:41)

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2. Unpacking the Growth Story: Organic Expansion & Household Penetration (02:13–03:04)

• Organic Opportunity:
  • Household penetration for core products sits at just 10% (out of 85M US households), providing a large addressable market.

    “If you look at the 85 million households out there only being penetrated by 10%, we have a lot of organic opportunity.” (02:24)

  • Key challenge: convincing more consumers to engage in the gardening category.
• Channel Shifts Post-Pandemic:
  • Surge in e-commerce: share of sales through e-commerce channels has jumped from less than 5% pre-pandemic to 13% currently (a 300bps increase just this year).

    “What we're realizing is we need to go to where the consumer is, especially the younger consumer, and they're in totally different channels.” (02:24)

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3. Marketing Transformation: Digital & Data-Driven (03:04–04:30)

• Data-Informed Digital Marketing:
  • Shift from traditional media buys to digital-first strategy; 80% of marketing spend is now digital.

    “We've now pivoted where 80% of our media is digital. And it does two things... tailor it for individual consumers... we get to be really agile with it.” (03:21)

  • Real-time agility:

    “We can decide on a Monday if the weather is not going to be good in Chicago this weekend, we can pull back or we can redirect it.” (03:21)

  • Improved ROI from digital investments.
• Creative/Agency Model:
  • Hybrid between in-house and external agencies; agile, non-traditional partnership model.

    “We don't do the traditional AOR model. We actually pick a lot of partners and we let our people sort of direct... it's changing so quickly. We've got to be flexible.” (04:04)

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4. Navigating Input Costs & Inflation (04:30–05:21)

• Commodity Price Headwinds:
  • Urea and other input prices remain high due to factors like Middle East instability and weather events.

    “Q3 earnings we had a little bit of a headwind this year... we absorbed most of it through cost out but about 15 million of it did fall to the bottom line in Q3.” (04:46)

• Risk Management & Pricing:
  • Active hedging practices; some pricing increases planned, but with careful balancing of potential volume impacts.

    “We do hedge Urea Diesel when it's available... going to have to take some pricing this year and that's a delicate balance.” (04:46)

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5. Retail Relationships & Product Channel Strategy (05:21–06:03)

• Retail Focus Remains:
  • Direct-to-consumer is not a major focus (“a rounding error”).

    “We don't really endeavor to sell a lot directly through our own channels. It's a pretty small, it's a rounding error for us...” (05:30)

• Retailer E-commerce Acceleration:
  • Main retail partners (the “big three”) are moving quickly into e-commerce.

    “We are now in the mode of developing products for all of our e-commerce and retail partners. And that’s a big part of what we talked about today, which was innovation.” (05:30)

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6. Adapting to Housing Trends & Next-Gen Consumers (06:03–07:42)

• Homeownership Rate Declines:
  • Company not overly troubled by low homeownership or housing turnover.
    • Focused on meeting needs of apartment dwellers and condo owners through indoor gardening products.

      “That next generation, they are not yet homeowners, they are apartment dwellers, they have condos. So we've pivoted hard into indoor gardening, something we've always done, but we haven't talked about it.” (06:29)

  • Expanding presence into grocery aisles with controls products, and partnerships (e.g., Murphy’s natural mosquito repellent).
• Future Tailwinds:
  • As housing turnover returns, see homeownership as a future growth catalyst.

    “When I look at the homeownership, I don't look at it as a, as a headwind today. I look at it as it's going to be a tailwind when that dam breaks and we start to see more turnover...” (07:42)

  • Emphasis on catering to new consumer demands: natural, organic, pet- and child-safe products.

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Notable Quotes & Memorable Moments

• On conservative growth projections:

  “I told the team I think we can outperform that. But our focus right now... is getting that leverage down a little bit.”
  — Nate Baxter (01:41)

• On digital agility:

  “We can decide on a Monday if the weather is not going to be good in Chicago this weekend, we can pull back or we can redirect it.”
  — Nate Baxter (03:21)

• On new consumer focus:

  “That includes apartment dwellers, that includes people that aren't yet homeowners. And when I look at the homeownership, I don't look at it as a headwind today. I look at it as... a tailwind when that dam breaks and we start to see more turnover...”
  — Nate Baxter (07:42)

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Timestamps for Key Segments

• 00:38 – Introduction to Scotts Miracle-Gro’s new growth targets
• 01:41 – EPS growth targets; approach to volatility and leverage
• 02:24 – Household penetration and digital channel growth
• 03:21 – Digital marketing strategy and creative agility
• 04:46 – Input costs, hedging, and pricing strategy
• 05:30 – Retailer relationships and product innovation
• 06:29 – Shifting focus to next-gen consumers, indoor gardening, and new product channels
• 07:42 – Outlook on homeownership trends as a future growth engine

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Conclusion

Nate Baxter outlined a pragmatic yet optimistic roadmap for Scotts Miracle-Gro—balancing conservative projections and financial discipline with ambitious plans for channel innovation, digital marketing transformation, and next-generation consumer engagement. The growth strategy hinges on deepening household penetration, adapting products and messaging for younger/non-homeowner demographics, and staying agile amidst macroeconomic headwinds. As Baxter puts it, it’s not just about waiting for homeownership rates to recover—it’s about building relevance with every kind of household gardener, today and tomorrow.

Transcript

[Bloomberg Tech Host]

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[Bloomberg Radio Host]

Bloomberg Audio Studios Podcasts Radio News we

[Bloomberg Interviewer]

want to take a look at gardening product maker Scott's Miracle Gro unveiling new growth targets in its investor day today. Fresh off a new CEO appointment, the company says the adjusted EPS and sales targets are part of a quote growth algorithm with legs into 2029. And to put a finer point on that, the company putting out those mid range financial targets for fiscal 2027 through fiscal 2029 average annual adjusted EPS growth of 5 to 8%. Fresh off that investor day right here in Studio 2 is the CEO and President of Scott's Miracle Grow, Nate Baxter. Great to see you Nate.

[Nate Baxter]

Thanks for having me.

[Bloomberg Interviewer]

I know you're getting settled into the job. You had to come talk to the Wall street whores. How did they treat you today?

[Nate Baxter]

Everybody was great.

[Bloomberg Interviewer]

Yeah.

[Nate Baxter]

You know, the reality is I've been having conversations for the last 18 months with our investors. So while the title has changed, the underlying strategy is still consistent with what I've been talk the better part of two years.

[Bloomberg Interviewer]

Well, let's talk about the underlying strategy. When I see eps growth of 5 to 8%, that doesn't seem aggressive, but it's not necessarily low either. Given all of the complexities going on in the world today. What gives you the confidence that you can meet that?

[Nate Baxter]

Well, we do recognize it's sort of conservative. It's, it's sort of in the sweet spot of a value investor. If I look at the last couple of years, we've had a lot of volatility in the markets, a lot of events between tariffs and the war in Iran that we just couldn't predict. So our point of view is we're going to be fairly conservative, but we are going to turn into a growth company. We have, we believe that the underlying initiatives that we outlined today are going to get us to where we need to be. But we also wanted to be honest with investors about growth. I told the team I think we can outperform that. But our focus right now, especially from a capital allocation standpoint, is getting that leverage down a little bit.

[Bloomberg Interviewer]

So with regards to the growth strategy, and forgive me, I don't mean to be flip about it. But when I think about the products you sell, obviously iconic brand, the branded products, but that doesn't seem like a growth story unless I'm missing something.

[Nate Baxter]

Well, I think you have to look at it a couple of ways. So we do believe there's a lot of organic growth possible. Our average household penetration is only about 10%. So if you look at the 85 million households out there only being penetrated by 10%, we have a lot of organic opportunity. Now the question is how do we convince consumers to engage with us in our category? So I think that's one of the fundamentals. The other is that we know channels. Consumers are shopping in channels that they didn't before. You know, you come out of the pandemic. I think we had something like less than 5% of our total point of sale that was through E commerce. Now we're up to 13%, 300bps alone this year. So what we're realizing is we need to go to where the consumer is, especially the younger consumer, and they're in totally different channels.

[Bloomberg Interviewer]

Well, talk to me a little bit about that because what is sort of, I mean, you talked about this at the investor. You talked about this on your earnings last, last week, I believe as well, about digital advertising and your approach to it. What does this mean? You're just making like, you know, funny things on Tik Tok or is it a little more sophisticated?

[Nate Baxter]

No, I mean, we certainly don't want to. We don't want to cheapen the brands. It's more sophisticated than that. What we're recognizing is we need to meet the consumer where we are. You know, we used to be a traditional media company. You would buy those up fronts, you would have a fixed date, the cost was sunk, you would run it. The weather might not be great. Not necessarily the right way to do your media strategy. So we've now pivoted where 80% of our media is digital. And it does two things that are really important. One is one, we get to tailor it for individual consumers. And the second thing is we get to be really agile with it. We can decide on a Monday if the weather is not going to be good in Chicago this weekend, we can pull back or we can redirect it. So it allows us to be much more effective. And we've seen a commensurate increase in the media ROI as a result of that.

[Bloomberg Interviewer]

Is your marketing primarily created in house? Are you relying on third party?

[Nate Baxter]

It's a hybrid. We have a. For the social stuff, we'd like to do it in house because you need to be able to respond to what's happening out in the world. But we have a whole bunch of partner agencies. We don't do the traditional AOR model. We actually pick a lot of partners and we let our people sort of direct and it's been hit or miss. You know we've got great agency partners, we have some that are, are good for a period of time and then we want to move on. But one thing, it's a little bit like it's changing so quickly. We've got to be flexible with who we partner with on these initiatives.

[Bloomberg Interviewer]

And talk to me about your input costs. I mean we've seen commodity prices up, including for Urea. Obviously it does not seem like there's going to be an end in sight right now for those to come down. With regards to the situation in the Middle east as well as some of the other weather related factors, how have you factored that in to that 5 to 8%?

[Nate Baxter]

So yeah, certainly, certainly been a challenge. I mean I, we talked about in our Q3 earnings, Q3 earnings we had a little bit of a headwind this year. We absorbed most of it through cost out but about 15 million of it did fall to the bottom line on in Q3 for next year. We're doing a few things. One is we've got a great team that does pretty, pretty sharp hedging and so we do hedge Urea Diesel when it's available. But more importantly we work on how to minimize those inputs and we're also going to have to take some pricing this year and that's a delicate balance. We've got to look at volume trade offs with that. But we have great relationships with our retail partners and given we're in the mid single digit range of pricing we think we can figure out a way to navigate that.

[Bloomberg Interviewer]

What's the relationship like with the retailers and where you put product versus what maybe you're trying to sell directly through your own channels?

[Nate Baxter]

Well, let me be clear. We don't really endeavor to sell a lot directly through our own channels. It's a pretty small, it's a rounding error for us and it's not something we're focused on. Our lawns program is the biggest but our retail partners are pivoting very quickly to E commerce. So if you look at the big three, which is what we've traditionally talked about, footsteps in those brick and mortar stores flat to down. Actually last quarter they were slightly positive which was a great sign to see. But they are Pivoting quickly. So we are now in the mode of developing products for all of our e commerce and retail partners. And that's a big part of what we talked about today, which was innovation.

[Bloomberg Interviewer]

I do just have to ask you, obviously when I think of the products that you sell at Scott's Miracle Grow, I think, you know, you're a homeowner, you're going out into your backyard or into your front yard and applying and applying the products here. We know that the homeownership rate has gone down. We know the turnover of homes has gone down as well. I assume that has to have a direct impact in your business. How do you compensate for the slowness that we're seeing in that space?

[Nate Baxter]

Well, the good news, it's all part of how we go capture that next generation. So that next generation, they are not yet homeowners, they are apartment dwellers, they have condos. So we've pivoted hard into indoor gardening, something we've always done, but we haven't talked about it. And we have a whole new suite of products that came out. The other big win that we talked about at investor day today is in the grocery aisle. We typically have not been present in the grocery aisle with our controls products. And so we now are winning business at some of our bigger partners in the grocery aisle. That's a big deal for us. And then if you look at our partnerships, we've talked about a partnership with a small company called Murphy's. They're doing on skin natural mosquito prevention and repellent. We're finding new channels with them. So I think, you know, this growth story, just to go back to what you asked me a minute earlier, it's really about getting the right products in our consumers hands. So we've got our traditional consumer that likes the traditional product that you just mentioned, but we have the next generation consumer. They want natural, they want organic, they want things that are safe for pets and kids. That includes apartment dwellers, that includes people that aren't yet homeowners. And when I look at the homeownership, I don't look at it as a, as a headwind today. I look at it as it's going to be a tailwind when that dam breaks and we start to see more turnover in the homeownership. So we don't, we don't look at it as a negative. We just know that there'll be something down the road coming where we can engage that next gen consumer as they become homeowners.

[Bloomberg Interviewer]

All right, Nate, great to have you here.

[Nate Baxter]

Thank you very much, Nate.

[Bloomberg Interviewer]

Nate Baxter there he is the CEO and president of Scott's Miracle Grow, the

[Bloomberg Radio Host]

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[Nate Baxter]

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[Nate Baxter]

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[Nate Baxter]

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