Barcelo Enterprises hatched a palm business out of years of experience in the bedding plant industry.
June 18, 2008
California just wouldn't be California without its tiled roofs, stucco plastering and palm trees. Back in 1999, that vision of a strong Mediterranean motif to accent West Coast décor and design was an interest that turned into a passion for the Barcelo family, and Barcelo Enterprises was born.
The family wasn't starting from scratch. In 1981 the family founded its previous business venture, Barcelo Plant Growers (BPG), a bedding and groundcover nursery. When BPG was sold to Color Spot in 1996, the forward-thinking patriarch and president of the family business, Carlos Barcelo, asked that a non-compete agreement specifically exclude palms, which was always an interest for him.
"We discovered a huge void in the marketplace," says Tony Barcelo, vice president of operations in northern California and Arizona. "At the time, the economy really started to change. Things started to boom and the demand for palm trees heated up. It was a case of being at the right place at the right time." It was different than the Barcelos' previous experience with bedding plants and groundcovers. Both have quick turns in production, but a Queen palm liner takes a year to grow and the job is labor intensive.
"I'm always trying to create a better yield in the germination process for the palms, which are very difficult to germinate," Barcelo says. "We've increased our number of growth chambers - converted a lot of coolers into growth chambers." Everything starts for palms in the greenhouse. From there, production moves outside to harden plants off. Some varieties of sagos are finished in greenhouses, but most everything is moved into the fields. After a very harsh freeze last winter, the necessity of the greenhouses was clear. "Without the greenhouses, in California you could never get it done," Barcelo says.
Riding The Bumpy Waves
Barcelo describes early business in palms as a self-fulfilling prophecy - everything the company grew sold, and fast. During the construction boom of the late '90s, keeping up with demand was a struggle for many suppliers on the West Coast. Since then, business has slowed, a glut in the market has grown and many growers who expanded during the boom now search for outlets for their products.
What's made the difference for Barcelo Enterprises is its size, product selection and outlook. Its customers include The Home Depot, Lowe's, Wal-Mart, Costco, the Star Nursery garden center chain, Orchard Supply Hardware and independent garden centers. Stores like these want the right product mix and consistency from the vendor. With its ability to cover 200 to 300 retail stores at a time, his company can deliver that consistency, Barcelo says.
"The only way you can accomplish that consistency among stores is to have one vendor," he says. "If you have five or six vendors for every marketplace, it gets kind of hodgepodge and the execution is difficult." Barcelo Enterprises delivers a consistent look, and its product mix is just as consistent. Looking back over the years, Barcelo says his product mix hasn't expanded or changed too much. Staples still include sago and Queen palms and the successful addition of tropicals like Bird of Paradise, hibiscus and gardenia. They've also returned to poinsettias and garden mums, staples of the BPG days.
"We grow what sells," he says. "A buyer once told me, 'You're cherry picking the top items.' Well, yeah! I want to make sure I can sell it. I'm focusing on the items that really sell. The market is the market. If they want red petunias, they're going to buy red petunias - if they buy them from The Home Depot or Lowe's, wherever."
What little room there is for new and novelty products, Barcelo Enterprises fills with innovative merchandising - display racks, terra cotta pots, bigger, odd sizes (a hydrangea in a 7-gallon pot) or combination mixes of different palms. A trend is usually a flash in the pan, though, says Barcelo.
"Long term, people will buy it once, maybe twice, but then they need something else, something more exciting," he says. These ideas create marketshare where none existed.
The Right Attitude
Barcelo is nothing if not optimistic about his company's place in the market. Although palms aren't in demand the way they once were and immigration and transportation are serious challenges, there's no telling what the future holds, and Barcelo Enterprises is ready for whatever is to come. When growing a crop with a long germination time like palms, the future is always linked to today. And today has been pretty good, considering the challenges the industry faces.
"We're 18 months into some crops," Barcelo says. "We've got to plant this stuff up whether or not the economy is good. We have to look into the future and hope it is. When the time comes, if you don't have it, they'll buy it from someone else." That same long gestational period also helps insulate new players from entering the marketplace, he points out.
Selling a product that relies on disposable income is another special challenge of the industry, Barcelo comments. And while gasoline prices are a burden for growers, they're a burden for consumers, as well. He figures the average California commuter now pays between $200 and $400 or so more a month in fuel increases. That's $400 fewer dollars of disposable income.
"Rich people will keep their gardens looking good, but the masses is where the volume is," he says. With the ups and downs his market has seen, Barcelo says nothing surprises him anymore and a successful grower needs to be ready for the unexpected.
"You can't get caught up in the changes," he says. "You just have to deal with them. We're in an environment where change is going to happen every year. If you expect it, you're not surprised by it. When you don't expect it is when the problems happen." The talents each Barcelo family member brings to the table are critical. Carlos oversees the company with the input of siblings Tony and Rosa Jr., vice president of operations in southern California.
Down The Road
Only good things lie ahead for Barcelo Enterprises if you ask the ever-optimistic grower. Carlos, Rosa and Tony will work in the future to keep developing in the West. Tony says he sees tremendous growth over the next 10 years, acquiring and building greenhouse space when and where it makes sense.
Barcelo Enterprises began with 35 acres of production and has now grown to 450 acres. But it isn't about becoming a behemoth for Barcelo.
"Our business isn't about the big picture," he says. "It's about the little things."
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.