Originally appeared in April 2001 issue of Greenhouse Grower

A Cut Above

California cut flower grower Bob Echter is finding success beyond his traditional crop – even in the midst of a crippling energy crisis.

by MATT HOPKINS
Managing Editor
matt@greenhousegrower.com

Nearly three million people live in San Diego County. Couple that fact with an absence of cut flower growers in the area and you have the making of a golden opportunity. Capitalizing on this situation is Dramm & Echter (www.drammechter.com) in Encinitas. The company has endured the ups and downs of the industry over the years – including the current energy crisis – to become firmly entrenched in the Southern California cut flower market.

“We market the freshness aspect because there aren’t that many cut flower growers in the San Diego area and there’s three to four million people within a hour’s drive of here,” says president Bob Echter. “We can use that to our advantage.”

The company – ranked No. 56 on GG’s Top 100 Growers in 2000 – has ventured into new areas throughout its history. Founded in 1972 by Gene Dramm and Bob’s father, James, Dramm & Echter started growing carnations and chrysanthemums, which were in their heyday at the time. “But by the mid-1970s the handwriting was on the wall that a lot of cut flower production was moving to South America,” Echter says.

To counter that trend, the company added a potted plant division and by the early 1980s, when Bob came on board, began producing Dutch cut flowers like gerberas and lilies. “The Dutch flowers allowed us to compete internationally, but not go head to head with South American producers,” Echter says.

The company has also taken advantage of the San Diego’s ideal growing conditions. Dramm & Echter began leasing fields from neighboring Paul Ecke Ranch to start year-round, outdoor production in the 1980s.“A greater variety of field flowers were coming into vogue at that time,” recalls Echter, who still uses some of the land for production today. “Part of that may have been due to increased use of silver thiosulfate (STS). Suddenly crops like delphinium and larkspur, which didn’t traditionally hold very long or ship well, became commercially viable.”

Bob, who took over the reins after Gene Dramm passed away in 1995, has diversified the 960,000-square-foot company into three parts – Dramm & Echter, Fox Point Farms (www.fox pointfarms.com), and D&E Propa-gators (www.depropagators.com). Dramm & Echter sells to cut flower wholesalers and bouquet makers. Fox Point Farms, which is located in Carlsbad, sells wholesale to retailers, while D&E sells cut flower and garden plant liners.

Despite some lessons learned from the energy crisis, Echter says the company is poised to broaden its horizons – particularly in propagation.

Energized About A Crisis
California hasn’t been hit this hard since its last major earthquake. The aftershocks of the energy crisis has many growers running for cover. Even in San Diego – where the average annual temperature is 66° – the crisis has reached red alert levels, Echter says. “I think California’s energy crunch will cause some contraction in the market,” he says. “It’s hard to tell to what extent this will occur, but there will definitely be some growers closing shop.”

Echter’s grim forecast stems from the energy costs his own company is incurring. “We’ve been hit hard on both ends – electric and gas,” he says.

In the last few months, Dramm & Echter has paid 20 to 30 cents per kilowatt-hour of electricity, compared to 10 cents it has traditionally paid. In addition, while most of the country has been paying 50 cents per therm for gas, California residences and business owners have been paying about $1.40 – almost triple the national average.

“San Diego County in particular has been hit hard,” Echter says. “We are paying twice the rate of the gas district north of us.”

Echter says he has been forced to add a 3% surcharge to sales to help soften the blow from rising energy costs. “But this surcharge is not nearly enough,” he says. “It’s just a small percentage of the company’s increased energy cost.”

In addition, Echter has taken a few energy conservation measures to help alleviate costs. “We’ve resurrected some old heat curtains that hadn’t been used in years,” he says. “We also installed more than 300,000 square feet of a new hot water boiler system. It’s a real high-efficiency Dutch boiler, with all the bells and whistles, that covers about half of our entire heating needs.”

Echter says he’s also seriously considering a co-generation unit and backup generator. “They’re talking about the likelihood of rolling blackouts this summer, so I need to protect our business,” he says. “I’ll try to meet our basic 12-month, 24-hour need.”

In hindsight, Echter admits he would have done a few things differently in preparation of the energy crisis.

“On the gas side, I definitely would have bought a contract at one of our two main growing sites,” he says. “But we were using history as our guide. We kept saying, ’let’s wait for a cheaper window before we lock in a gas contract.’ We weren’t reading the forecast of a cold winter and gas shortages, which would have told us prices would be up. I was worried about paying an extra dime per therm and now I’m paying an extra dollar.”

Unlike gas, which has been deregulated in California for more than 10 years, electricity just recently became deregulated in the Golden State. Knowing what he knows now, Echter says he wouldn’t have waited for deregulation to work to his advantage before taking action. “I was waiting for cheaper autumn prices to balance out our expensive summer, but those lower prices never came,” he says. “Instead we should have started generating electricity ourselves here at the site.”

In an attempt to lower future utility bills, Echter has joined other California growers and farmers in an energy purchasing co-op formed through the state’s Farm Bureau. “We feel as aggregate buyers, we’re going to have greater success in negotiating better pricing than we would otherwise as individual growers,” Echter says. “As a group, we also can afford to pay someone with the expertise to guide us rather than all of us trying to figure it out on our own. It’s hard to grow flowers and be an energy trader at the same time.”

As a member of the California Cut Flower Commission (CCFC), Echter has allowed his company to be an example for the entire industry. “California growers as a whole have kind of become the poster children for the energy crisis for the CCFC,” he says. “I know CCFC president Lee Murphy was doing three to four interviews a day between national and local media stories. We just made ourselves available for him in his efforts to find legislative help.”

Diversifying In Propagation
Despite the jolt of the energy crisis, Echter says the company is in position to expand in future years. At the center of that growth is likely to be D&E Propagators. While the company has actually been propagating since the early 1980s when it acquired a facility in Vista, CA, Echter says this division is still in its infancy.

“Even to this day we are not a large propagation business,” he says. “We are just getting underway. It’s an area I foresee increasing in the future to where we can become a player.”

The ability to propagate cut flowers has led to strong relationships with Dutch companies over the years, including Van Staaveren, Schreurs, Van Zanten, and P. Kooij & Zonen. Yet another opportunity knocked after Echter moved the propagation business to the home base in 1998 – this time with Selecta Klemm’s vegetative annuals.

“We were approached by Selecta Klemm last year,” Echter says. “It was looking for a propagating company in California to partner with to bring its product into the U.S. market.”

Echter is not expecting instant success with his new line of plants, but instead is taking a long-term approach. “It’s apparent that vegetative plant growers are no different than cut flower growers,” he says. “Nobody leaps into new supplies and varieties with success overnight. Everyone takes several seasons to get adjusted.”

Trial By Fire
D&E’s partnership with Selecta Klemm has also allowed the company to join the California pack trials circuit. While last year’s initial introduction to the annual April event was kept low profile, Echter says he plans to make more of a splash this year. “We’re the new kids on the block,” he says. “We want to get our product out in a competitive way.”

And what a competitive block it is, with EuroAmerican Propagators and Paul Ecke Ranch in the neighborhood. “We are fortunate that we are in San Diego with two really progressive companies, so I think there will be a big draw into the county,” Echter says. “Hopefully, we’ll be a good stop in addition to these other two that are here.”

While the majority of the companies have adopted an open house theme, Echter says he’s attempting to put the “trials” back in pack trials. “We are trying to do an authentic trial here,” he says. “We’ll bring some competitors’ product in the door and put everything side by side. We want to take pack trials back to where it used to be when Goldsmith Seeds and other companies used to grow competing varieties.”

After visiting a few other trial sites for the first time last year, Echter says he was surprised by the variety of visitors that attend. “It’s pretty neat when you get people from breeding companies and large propagation companies, as well as employees from small garden centers,” he says. “You get all kinds of people coming through. It’s good for feedback and exposure.” GG