AI Streamlines Inventory Management for Scotts Miracle-Gro

Scotts Miracle-Gro is known for products that help farmers and gardeners of all sizes grow larger flowers, vegetables, and fruits.

Now, the company is using machine learning and artificial intelligence to grow its own business through improved inventory management initiatives driven by more accurate demand forecasting.

Like many companies, Scotts’ inventory practices became highly visible during the COVID-19 pandemic. Demand during the crisis spiked as more people worked and went to school remotely, leading to more time for gardening initiatives. The company exponentially increased its production and distribution footprint, leading to a peak of 18 distribution centers.

After demand normalized in 2023, Scotts needed to right-size its inventory operations, which had reached $1.3 billion worth of inventory. With the help of data analytics and predictive modeling, the company has since reduced its inventory to $627 million, with a goal of finishing below $500 million by the end of the 2025.

The company also shrank its distribution center footprint to five sites.

To execute effectively, the company needed the planning side of the business to get smarter. By applying machine learning algorithms to already-visible inventory levels at retail partners, Scotts obtained individual store data down to the SKU level to drive better planning capabilities. From there, the company set out to build a machine learning model that can predict where inventory is needed and when.

According to COO Nate Baxter, “Without the implementation of machine learning — and now we’re layering AI on top of that to help make better predictive decisions about inventory — it would have been really hard to get where we needed to be on the inventory piece.”

Video Spotlight:  

• AI in Action | Inventory Management | The Future of AI (July 11, 2025, Domo)

This post is based on the Supply Chain Dive article, Scotts Miracle-Gro taps machine learning to solve inventory glut., by Kelly Stroh, October 28, 2025, and the YouTube video in the Spotlight. Image source: wavebreakmediamicro/123RF

Discussion Questions:

1.  How can high inventory levels impact other areas within a company?

Guidance: High inventory levels can limit cash availability for research & development initiatives, tie up capital that could be used for technology and system upgrades (such as new AI and machine learning tools), can lead to potentially obsolete goods and/or reduced prices as goods are discounted to incentivize consumer demand. One more impact is higher holding costs from storing inventory for longer periods of time.

2. What are key takeaways from this article?

Guidance: Companies sometimes overreact during periods of changing demand, such as adding or reducing capacity, increasing or decreasing inventory levels, and building or shuttering warehouses.

Having access to more detailed levels of data—such as sales in various regions—can lead to meaningful insights on how to manage the company’s overall operations.

Even a nearly 160-year-old company (Scotts was founded in 1868) needs to constantly evolve in terms of using new tools, systems, and processes to keep pace with how demand changes over time.