Yesterday, Today, Tomorrow
To celebrate the 20th anniversary of the Top 100 Growers list, we look back at the last two decades and ahead to the greenhouse industry of the future.
June 16, 2008
So much can happen in one year. Our Top 100 Growers have seen some serious changes, especially at the top of the list. It's only fitting that we think of change this year, the 20th anniversary of our Top 100 Growers list. Read on for a recap of who these growers are, what they sell, where they sell it and how and where they think they'll be doing all of the above in the future.
We have a new No. 1 grower in terms of environmentally controlled greenhouse area. Kurt Weiss Greenhouses, Center Moriches, N.Y., takes the top spot this year with 11,241,000 square feet of environmentally controlled greenhouse area. The increase in area is the result of new greenhouse purchases in the northeastern United States. Yoder Brothers moves up to No. 2 on the list and Color Spot is at No. 3. It seems we've underestimated Bay City Flowers' square footage in years past. The company reports 8,712,000 square feet of greenhouse space. Paul Ecke Ranch, with the acquisition of Oglevee, adds square footage, moving from No. 7 to No. 5.
Last year's No. 1, Hines Horticulture, comes in at No. 6 this year after selling facilities in Miami and the northeast. Costa Nursery Farms also moved up on the list, from No. 31 last year to No. 7 this year. Speedling, Metrolina Greenhouses and Altman Plants round out the top 10.
Newcomers to this list include Barcelo Enterprises (No. 28t), Elzinga & Hoeksema Greenhouses (No. 57), Pacifica Flowers (No. 58), Green Valley Growers (No. 61), Van de Wetering Greenhouses (No. 88) and Bob's Market & Greenhouses (No. 90). Welcome aboard!
The twists and turns of the last 20 years have been challenging for our Top 100 Growers. There has been a lot of movement on the list, new companies added and some removed. This year, we posed questions in our Top 100 Grower Survey related to the past, present and future business.
Looking back on their businesses in the last 20 years, there have been so many types of change for Top 100 Growers. More automation, more competition and shrinking margins have been the hallmarks, though.
"We have gotten better at what we do," says Lisa Wenke Ambrosio, Wenke Greenhouse (No 31). "We are more efficient and more customer focused."
"We have had to become savvy business people as well as better growers to compete," says Chris Bergen of Bergen's Greenhouses (No. 60). "An example of this is our large investment in our facilities and equipment."
Along with these advances in equipment have come the increased cost to producing crops. This comes at the same time Top 100 Growers are dealing with a more challenging and competitive climate. Compared to 20 years ago, 55 percent say they deal with more box stores and 44 percent say they do business with fewer independent retailers.
"The cost to produce has outpaced the increases in wholesale prices that we charge," says Brad Bloes of Panzer Nursery (No. 45t).
"Margins are slimmer, consolidation at retail has exerted greater pricing pressure," says Jim Hessler, president of Green Valley Growers (No. 61). "Lack of long range planning by major retailers has resulted in opportunity loss."
"Disproportionate control, power and margin has gone to the retailer and the breeder. Producers are at the greatest investment and risk of all time," says Speedling Inc.'s (No. 8) CEO David Robbins.
Some growers do report a silver lining, however, compared to the past.
"It's gotten to be more fun," says Tom Abramowski, president of Rockwell Farms (No. 54). Several report expanded product lines compared to the past, growing from regional to national distribution and a few newcomers report expansion. Petitti Garden Centers formed its 900,000-square-foot Casa Verde growing operation (No. 75), supporting eight of its own retail garden centers.
What they grow has changed, as well. A more diversified line, whether in varieties or sizes grown, is the trend among our Top 100. Of them, 42 percent now grow a more diverse line of varieties. One quarter report more and/or larger container sizes, including several who now grow fewer or no flats, switching to pots. Inputs have changed, too.
"The 4 1/2-inch vegetative annual line has increased greatly over the past three years," says Bob Barnitz, president and CEO of Bob's Market and Greenhouses, No. 90. "This product line offers a greater profit margin for the same greenhouse footprint." Nine percent of respondents agree, mentioning an increase in use of or switch to vegetative cuttings over the last 20 years. Several also mentioned better breeding that results in better uniformity and timing than in the past.
"Ten years ago, we grew only 4-inch seed geraniums in the spring," says Shawn Koepnick, vice president and general manager of Henry Mast/Masterpiece Flower Co. (No. 85). "Now it is countless items and packages."
Fifteen percent of respondents have stuck to a monoculture crop, haven't changed their crops much or decreased variety selection in 20 years.
Bedding plants are at the top of our Top 100 Growers' minds. Their top five genera by number of plants sold are long-time favorites impatiens (grown by 43 percent of respondents), petunias (42 percent), geraniums (31 percent), chrysanthemums (22 percent) and poinsettias (20 percent). When asked their most profitable crop, responses were many and varied. Top responses were orchids and lilies, each with 10 percent of the vote, followed by petunias, gerberas, bromeliads and tulips, each with 6 percent of the vote. Other responses include mums, clematis, poinsettias, lagerstroemia, cyclamen and hosta. There are many different genera out there, and our Top 100 Growers are making many work for them.
A buzz word in greenhouses is lean, as in the lean manufacturing techniques being applied to some production. Lean has been applied in 26 percent of our respondents' facilities. Thirty-one percent are investigating lean, while 43 percent haven't investigated lean.
Another trend is organic growing. Opinions are varied.
"We are diligently exploring organic and eco-friendly products and packaging," says Dean Chaloupka of Floral Plant Growers (No. 27). Grolink (No. 23t) reports it needs to keep chemicals in the greenhouse to ensure 100 percent pest- and disease-free cuttings. The same goes for Paul Ecke Ranch, No. 5.
"Currently, we do not grow organic products, but we do use Insect Exclusion Practices, such as stock screening," says Paul Ecke III. "Regulations on importing cuttings have tight tolerances and do not allow margins of risk assumed in today's organic processes. With advanced technology, growing organic in the future might be a viable concept." Other growers don't see the demand or the upside of growing organically.
"No, too much aggravation and I think it is deceptive to imply that one thinks organic is better," says Joe Thomas, owner of Dan Schantz Farm (No. 78).
"As with most consumer products, we are not hearing a big call for this type of product," says Bill Swanekamp, president of Kube-Pak Corp. (No. 87). "Further, since it costs more to produce a crop organically, it seems odd that our industry is now emphasizing this method of growing when we are in a phase of stagnant pricing.
"This does not mean we are environmentally insensitive. We have been a leader in the industry when it comes to reducing or using less toxic chemicals on our plants. Certainly, there will be a place for organic products, but I am not sure it is essential for ornamental crops versus consumable crops."
Overall, 87 percent of our Top 100 respondents do not grow crops organically and 13 percent do.
With an increased number dealing with large retailers, many of the largest growers have supplemented their growing area with contract growers. It's an even split down the middle, though. Of a total 58 respondents to the question, 50 percent said they do use contract growers and 50 percent said they do not.
Of those who said they do use contract growers, between 2 and 43 percent of their production is contract grown.
Judging from our respondents, successful growers in the future will thrive based on production efficiencies, and they'll be growing mums. Of growers who responded, 25 percent said chrysanthemums would be the next big crop. And when we asked what it will take to be successful in the greenhouse business in the next 20 years, the word efficient was mentioned in 20 percent of responses.
"Efficiency of production and the ability to meet the needs of customers with timely product," says Altman Plants' (No. 10) COO Matt Altman. "Also creativity in product development to create new niches."
The willingness to change and adapt was the second most common answer.
"Keep reinventing your business," says Bloes of Panzer Nursery. "The only way to keep up is to always rethink the process and trim where you can." Bill Tunier, general manager and owner of Post Gardens (No. 36), agrees.
"You need to keep an open mind and be positive about change," he says. "Use your vision to find a solution to every problem." Adaptation and change is a way to keep in tune with customers and the end consumer, say our survey respondents. Efficiency and adaptability are both ways to help a business reduce costs for higher margins, a key ability for greenhouses of the future.
"Growers need to get and maintain better margins or they won't be staying in business," says Henry Mast's Koepnick. Who will survive? More of our Top 100 survey respondents think the future of the industry is consolidation, rather than large growers supplementing their crop with the help of contract growers.
"More consolidation and less greenhouses," says Jack Rohling, sales manager at Young's Nursery and Greenhouses (No. 62t). "Fewer growers," says Joe Thomas, owner of Dan Schantz Farm.
"More big growers which will entail more contract growers," says Art Van Wingerden, chief operating officer of Metrolina Greenhouses. "Fewer smaller growers, less people getting into the business." Lean processes, more niche growers, more robotics and more environmentally friendly products are other predictions.
"Growers will be doing everything for their customers," says Richard Wilson of Colorama Wholesale Nursery, No. 34. "In some cases, renting the space just as it is done in the supermarkets."
"One hundred percent automated and garden centers will be leased to growers," says Chris Hammons, head grower at Timberline Nursery, No. 82t.
Westerlay Orchids just missed a spot on our list this year, but head grower Harry Schoun may have summed up the industry sentiment for many growers in his responses. How has your business changed in the last 20 years? "180 degrees." What will it take to be successful in the future? "Guts and brains."
Sara Tambascio is senior online editor of Greenhouse Grower. You can eMail her at email@example.com or follower her on Twitter @Sara_GG_TGC.