Costa Farms Expands With Purchase of Indoor Houseplant Grower Delray Plants

The current owners of Costa Farms (left to right) are Jose “Joche” Smith, Maria Costa-Smith, and Jose Costa.

Costa Farms, an internationally renowned plant producer based in Miami, FL, annnounced March 10 that it has acquired Delray Plants, one of the leaders in the indoor houseplant industry.

Jose (Joche) Smith, CEO of Costa Farms, says the acquisition of Delray Plants is a unique opportunity.

“Costa Farms has long admired Delray Plants and its contributions to our industry.”

Smith says Delray has a diversified product line that adds significant synergies to its growing organization.

“We are committed to the growth of our team and industry,” Smith adds.

Randy Gilde, CEO of Delray Plants, says he is happy with Delray Plants’ acquisition by Costa Farms.

“The hard working team at Costa Farms is committed to the same values and principles that guided the Koornneef and Gilde families for almost 50 years,” Gilde says. “Their goal is our goal – to bring the best foliage and newest varieties to market, educate the consumer, and grow a sustainable product. We can’t imagine a better company to help move our legacy forward.”

Delray Plants’ Cerie Velez, Randy Gilde and Natalie DiScascio

In 2014, Costa Farms acquired Hermann Engelmann Greenhouses, and has taken the sales of the operation’s signature brand of Exotic Angel plants to new heights. With the purchase of Delray Plants, Costa Farms is expanding its reach in the indoor houseplant category at a time when consumers are getting closer to nature, and potted plants and green walls are becoming a greater part of home décor.

“We are working tirelessly to recruit the next generation of consumers through education and innovations that will help consumers succeed with our products,” Smith says.

An expanded customer footprint, Delray’s e-commerce presence, and succession planning were key aspects of the Delray Plants purchase by Costa Farms.

Merging Delray Plants With Costa Farms

Founded in 1968 by Jake Koornneef, the Koornneef and Gilde families and the Delray team have built a rich legacy reflected in the company’s high-quality products and state-of-the-art production facilities. Delray Plants, based in Venus, FL, was number 13 on Greenhouse Grower‘s Top 100 Growers list in 2016, with 3,868,116 square feet of environmentally controlled greenhouses, 119 acres of shade greenhouses, and 20 acres of field production. Its property includes primarily potted foliage crops, as well as flowering potted plants, and some vegetables, and the operation serves home improvement chains, mass merchandisers, supermarket chains, wholesale florists, and independent garden centers.

In 2013, Delray trademarked its Plants With Benefits program, a line of 4-inch foliage plants decorated with pot covers that highlight the benefits of plants, like “Reduces Stress” and “Boosts Creativity,” and the easy care maintenance they require. The operation continued to expand its line and efforts each year. Ultimately the objective was to put forth a national Plants with Benefits campaign.

This segment of the business fits well with Costa Farms’ own initiatives to communicate plant benefits through its branded programs including O2 For You, a line of foliage plants drawing attention to houseplants’ air-cleaning benefits, as well as its Plants Of Steel program, promoting easy-care, low-maintenance plants in 6-inch containers, and the Exotic Angel brand, which Costa Farms relaunched and has expanded since 2015.

A blower sprayer is used to disperse the predatory mites Phytoseiulus persimilis throughout the nursery to control two-spotted spider mites
A blower sprayer is used to disperse the predatory mites Phytoseiulus persimilis throughout the nursery to control two-spotted spider mites. Delray Plants has been an innovator in using biocontrols over the past 20 years.

Costa Farms was ranked number 2 among Greenhouse Grower‘s Top 100 Growers in 2016, and merging Delray Plants into the business will surely move it up in the rankings for 2017. Its listed operating area for 2016 includes 15,071,760 square feet, 747 acres of shade greenhouses, and 1,484 acres of field production. Founded in 1961 by Jose Costa, Costa Farms is a third-generation, family-owned business that globally stretches over 4,000 acres and employs nearly 5,000 people. Along with thriving indoor and bedding plant divisions, Costa Farms operates merchandising and young-plant production divisions as part of its infrastructure, with operations domestically in South and Central Florida, North Carolina and South Carolina, and abroad in the Dominican Republic and Far East.

Costa Farms was named the International Grower of the year in 2016 at the International Association of Horticultural Producers awards gala at IPM Essen in Germany. The Florida-based grower was chosen from a group that included eight other international companies.

Costa Farms Manages Growth Through Acquisitions

Costa Farms has been through a period of rapid expansion, especially over the last five years. The operation purchased Layman Wholesale Nurseries in Trenton, SC, in 2012, which allowed Costa to enter the perennials business. In spring 2014, it acquired the business, assets, and brands of Hermann Engelmann Greenhouses, Inc. of Apopka, FL, most notably known for the Exotic Angel brand of small houseplants. Most recently, Costa Farms purchased the facilities of an orchid and bromeliad producer in Homestead, FL, moving its Desert Gems cacti and succulent production to those facilities.

As Smith explained in Greenhouse Grower‘s January 2016 cover story, the plan is to continue to grow, and Costa Farms has two ways it approaches acquisitions: strategy and value.

“The financial buy is often a good opportunity where we can purchase a property at a good value that rolls right into our operation, and that’s not difficult to assess,” he says. “Then there are the strategic acquisitions, which are a little more difficult because the payoff isn’t as obvious, but it may be a defensive move we’re making or something we want to invest in down the road.”

The Layman purchase a few years ago is an example of a strategy buy, which worked out well three years in, Smith says.

Costa Farms’ Trial Gardens show new varieties in the landscape
Costa Farms’ Trial Gardens show new varieties in the landscape

“It’s been a struggle, but frankly we have a team there that has done a great job to reshape things in the perennial industry, and we finally have our heads above water,” he says. “We’re going to continue to invest in and grow that business.”

Ultimately, the best part of any acquisition, says Maria Costa Smith, Costa Farms’ Executive Vice President – Color Division, is the talented people who become part of the Costa Farms organization.

“These people bring such breadth and history and knowledge, and are able to come into the team and become such big contributors,” she says. “We have had some amazing, really smart, sharp people join our team, to help us grow to a new level, and help us assimilate these businesses into the Costa way, and they’re always the biggest, most important and exciting part of any acquisition.”

Read more about the reasons for the acquisition of Delray Plants by Costa Farms, based on follow up interviews with both operations’ CEOs.

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