Originally appeared in Aug. 2003 issue of Greenhouse Grower

Growth Drivers

Never content with the status quo, the dynamic leadership team at Costa Color is raising the bar higher for all growers serving big box retailers.

by DELILAH ONOFREY
Group Editor
delilah@greenhousegrower.com

For six years, Costa Color has astounded customers, suppliers, and competitors as a cutting-edge bedding and potted plant producer serving mass merchandisers and home improvement chains from the southern tip of Florida up the coast to South Carolina. This month also marks the one-year anniversary of the company’s newest production facility, Costa Carolina, in Asheville, NC.

Costa Color is a rapidly growing division of Costa Nursery in Homestead, FL, which has led the nation in producing indoor foliage plants for 40 years. With roots in vegetable farming, Jose Costa emigrated from Cuba to the Miami area in 1959. His sons Tony and Mike built the foliage business, with Mike venturing off on his own to establish Mike Costa Foliage as the families rebuilt their businesses after Hurricane Andrew in 1992.

Now in its third generation of leadership, Costa Nursery is run by Tony’s children – eldest daughter Maria Costa-Smith and husband, Jose Smith, who is CEO of the entire company, and son, Jose Costa III, who is operations and production manager of the foliage farm. Maria is president of Costa Color. On the foliage side, the family also manages a thousand-acre farm in the Dominican Republic that produces starter material.

The opportunity to enter the color market came in 1997, soon after the Miami-based Caple Farms was sold to Tuttle’s Nurseries. Tuttle’s was on the verge of bankruptcy and key managers, Glen Rice, LJ Contillo, and Donald Rogers, decided to set off on their own. After meeting with the Costas and Smith, it became clear tremendous potential could be realized joining forces, since the family already had well-established relationships with large retailers.

The next step was to purchase 54 acres of land from nearby Margo Farms, which was abandoned after the hurricane. Subsequent purchases were 33 acres and then another 80 acres. “In 21/2 years, we went from no business at all to 167 acres of land, some of which is used for foliage,” Costa Color’s operations manager Contillo says.

While the first year was a rocky start with a key customer, Hechinger’s Home Quarters, going bankrupt, partnerships with Lowe’s and Wal-Mart grew and flourished. Last year, Costa Color was recognized by Lowe’s as vendor of the year. From the very beginning, Costa Color distinguished itself as a leader on the service and merchandising side. As sales manager, Rice supervises area managers who are in charge of 200 stores and 400 employees peak season.

The next big opportunity Costa Color seized was purchasing the former Velvet Ridge facility in Asheville, NC, to help with northern production and distribution, as well as the ability to grow cooler crops, like pansies and mums. That acquisition last year paved the way for 70% growth this year, generating $17 million out of Asheville, plus an additional $5 million increase out of Florida. Costa Color now nearly matches Costa Nursery in revenue.

“The Costas in general are very sharp,” Contillo says. “They’re a young group and their drive is just unbelievable. When we started Costa Color, we were setting up greenhouses and selling product in three months. When we closed the Asheville deal on April 28, 2002, we started selling product on August 1. It’s just mindboggling. Suppliers don’t believe it and don’t know how we do what we do.”
The family has earned a reputation for strong business instincts and the ability to execute plans quickly. “You have to be willing to analyze the situation and pull the trigger,” Maria says. “You sit, you lose.”

Unlike nurseries that buy established businesses to increase marketshare, Costa Color’s expansion has all been growth through partnerships with its retailers. The properties purchased were not operating businesses.

Contillo says one common mistake other companies with multiple locations make is not mandating a centralized environment. “We run Asheville identically to Miami,” he says. “Yes, there are differences in growing, but all planning and purchasing is out of Miami, as well as all reporting related to growing, production, and finances. If we grow or expand into another facility, we’ve got to be on the same page as Miami.”

In both ventures, Costa Color and Costa Carolina, the company has realized the synergies envisioned. In foliage, the company is already working with many of the same buyers. The ability to supply and service both color and foliage makes Costa a reliable one-stop shop. During slow times, combining foliage and color shipments streamlines freight.

Adding the merchandising service in the regions Costa Color serves has had a positive impact on foliage plant sales, Jose Smith says. “Foliage has grown for us but not in general,” he says.“Major players are down in the indoor plant market. It’s becoming more of a challenge to get product through the register with less shelf space. I don’t see the indoor plant market getting any bigger. We’re looking at creative ways of not just maintaining marketshare, but capturing other people’s marketshare.”

New Horizons
In the coming year, Costa Color will continue to build its information technology capabilities and its Garden Vision program, extending its merchandising services to other live goods suppliers. This creates a winning situation for all parties, generating more sales and providing merchandisers with consistent work.

From a production standpoint, Costa Color will start producing its own plugs in a new two-acre range in Florida under the direction of production manager David Wadsworth, who was a leading plug and liner grower with his former business, Suncoat Greenhouses in Seffner, FL. He was initially hired as a consultant and became a permanent addition to the team. “I’m excited to be involved from start to finish,” Wadsworth says. “As a plug and liner grower, I’ve been taught a lot of what I do impacts the finished grower customer. Now I am my own customer and walk out and live the experience.”

Maria credits Costa Color’s success to its team, clear vision, and investment in tools and resources to execute that vision. Brother Jose agrees and says he feels fortunate to be part of a great team of employees. “Although we can take credit for building the team, there are 1,600 people who work for us,” he says. “Those people who are out there day to day get the job done. We’re the catalyst or part of it, but it’s the people out there who really make it happen.” GG