FIRMLY ROOTED : NURSERY IN FULL BLOOM AFTER RECESSIONARY STORM.

Byline: Deborah Adamson Daily News Staff Writer

Today, Green Thumb Nursery in Canoga Park is celebrating its 50th year in business.

There are plenty of reasons to party. The family-run enterprise has survived one of the steepest downturns in the industry during the early 1990s. And business is blooming.

Green Thumb used the same strategy that gave rise to the dwarf peach tree: adapting to market conditions.

The tree, examples of which grace its displays, was developed for ever-smaller home gardens in the Southland. Likewise, Green Thumb Nursery held onto its turf by meeting changing demands - offering a greater variety of products, improving service and upgrading its merchandise mix.

``We do it through service, ease of shopping, having courteous people and offering a variety of products,'' said President Bud Bergquist, whose father, Dale, co-founded the nursery.

Many nurseries and growers were hit by a quadruple whammy in the early '90s: California was in a drought, the recession hit, the aerospace industry downsized, and large competitors moved into the nursery and garden business.

Now, the state's 6,000 nurseries and growers are seeing better times.

``It's definitely on the upswing now,'' said Ralph Klages, owner of Landscape Growers Inc. in Monrovia. ``The economy is showing some strength and people are feeling more free to spend.''

In 1995, retail sales hit a record $4.8 billion, up 6 percent from the year before. Industry observers believe that 1996's growth will be at least as good - perhaps approaching the 9 to 11 percent expansion rate of the go-go '80s.

But while the improving economy is boosting sales, large merchandisers pose a formidable threat to smaller nursery and garden shops.

The mom-and-pop operators are feeling pressure from the likes of Home Depot and Wal-Mart, which have huge lawn and garden centers. They can pay less by buying in bulk and pass on their savings to customers.

``Mass merchandisers have caused a lot of sleepless nights for a lot of people,'' said Harold Young, editor and publisher of Pacific Coast Nurseryman magazine, a trade publication in Glendora.

He said that mass merchants used to command 45 percent of the market and the rest went to nurseries. Now the figure is at least 60 percent for big chains.

The effects are felt all around - from wholesale growers to small independent nurseries to regional nursery chains.

Retail nurseries found it hard to compete with national chains while growers were hard-hit by the demands they got from these same chains.

``Growers that want their business have to drive down their prices really low'' or, sometimes, agree to take back products if they don't sell, said Ross Hutchings, executive administrative director of the California Association of Nurserymen in Sacramento.

Atlanta-based Home Depot Inc., which declined to disclose sales figures in its lawn and garden lines, says it's not in the business of weeding out competitors.

``If (smaller nurseries) are well-run and are good to their customers, they will find a niche market,'' said Amy Friend, spokeswoman for the chain.

That's what Green Thumb Nursery did.

It started offering a wider variety of plants that the chains don't carry, such as the Agapanthus Midnight Blue flowering plant, Bergquist said.

Since it can't compete in price against national chains, the nursery sells higher-end products for people who don't necessarily want the cheapest goods.

Over the years, the business has branched out into hardware, plumbing, patio furniture and seasonal items for Christmas and other holidays.

The four-store nursery also teamed with Green Arrow Nursery in Van Nuys, which is owned by other members of the same family, to cut costs by buying in bulk and placing advertising together.

These changes were crucial to its longevity in a highly-competitive market.

``It's like a jungle,'' Bergquist said. ``If you don't adapt, you get eaten.''

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Photo: (Color) Bud and Dale Bergquist, owners of the GreenThumb Nursery, identify with the dwarf peach tree.

Myung J. Chun/Daily News