Skagit Horticulture Builds New, Inclusive Business With Six Main Divisions
A 50-mile drive north from Seattle to Mount Vernon, WA, takes you through the fertile, picturesque Skagit Valley, where two of Skagit Horticulture’s four locations capitalize on the mild, temperate growing climate of the Pacific Northwest. With 309 acres of growing fields and 37 acres of greenhouse production at two locations in Mt. Vernon, 300 acres of outdoor production and 10 acres of state-of-the-art greenhouses east of the Cascade Mountains in Mabton, WA, and 36 acres of field production and 8 acres of greenhouses in Watsonville, CA, Skagit Horticulture has combined the best of two iconic operations, Skagit Gardens and Northwest Horticulture, into one organization. As of Jan. 1, 2017, the two companies officially merged, and since then, the team has been working to successfully bring its operations together into a family of brands focused on quality products, superior customer service, and strong industry relationships.
Two Companies, One Fresh Start
Founded in 1966, Skagit Gardens was owned most recently by the private equity company Aequitas Capital Management. In April 2016, Aequitas Capital Management was charged by the Security and Exchange Commission with violating federal securities laws. As a result, the company was placed in federal receivership and forced to shed some assets. The following June, Skagit Gardens announced it was officially for sale, and the company declared Chapter 11 bankruptcy in order to close a sale quickly.
At the time, the neighboring growing operation, Northwest Horticulture, was in the midst of a CEO search and began to look seriously at Skagit Gardens. The owner of Northwest Horticulture decided it would be a valuable acquisition to put both companies together, and purchased Skagit Gardens under the name Skagit Horticulture LLC in July 2016.
“The merger would provide the company with better economies of scale, better use of its facilities, and add about 40% to sales,” says Mark Buchholz, President and CEO of Skagit Horticulture. “It has given us the opportunity to pull the two companies together and make them perform well. That’s what we’re working on now.”
The combined Skagit Horticulture is now privately held by the same company that owns the prestigious Precept Wine Co., which is one of the largest privately owned wine companies in the Northwest, and deeply involved in diversified agriculture throughout the region.
Skagit Horticulture’s Family of Brands and Divisions
This summer, the company launched its new overarching brand strategy. Skagit Horticulture, as the parent company and umbrella brand, includes the Skagit Gardens, Northwest Horticulture, and Etera brands, which will all continue working within their own divisions. Skagit Horticulture has also launched a new agricultural division and its new GrowPro Technical Services team. Here’s how it all breaks down.
- Skagit Gardens. The Skagit Gardens division will continue to serve independent garden centers, premium small chain stores, and commercial landscapers by providing a selection of finished plants including annuals, perennials, grasses, ground covers, edibles, and woody shrubs.
- Northwest Horticulture. This division remains focused on providing a broad selection of finished annuals, perennials, grasses, ground covers, edibles, and woody shrub plants to the operation’s large-scale retail and home store clients.
- Etera. The Etera division serves the commercial green roof industry, providing the patented Etera Sedum Tile Mat for instant, on-roof plant coverage. In the expanding green infrastructure market, this has become a staple for green building, Buchholz says. The division also includes 40-plus sedum varieties for bulk planting needs, and 72-cell sedum and perennial plugs.
- Skagit Horticulture. The plug and liner divisions of Skagit Gardens and Northwest Horticulture have come together under the Skagit Horticulture name to offer hundreds of high-demand varieties from breeders around the world. The young plant program provides annuals, perennials, grasses, ground covers, and roses to growers across the U.S. and Canada. At the 2017 California Spring Trials, the Southern Living and Sunset Western Garden Collections announced a partnership with Skagit Horticulture to provide its branded liners. Skagit was recently announced as a new propagation partner for the Hort Couture Collection, and also works closely with the Star Roses program and a number of other unique and exclusive breeders.
Unifying Corporate Culture Focused on Empowerment and Success
Part of the unification of the two companies into one corporate culture at Skagit Horticulture includes involving and focusing all employees on success. The way President and CEO Mark Buchholz describes it is a company of business people, who develop strategies and make decisions to move the company in the right direction.
“Critical to that is employee involvement, and sharing information with our team so they know how we’re doing, what’s working and what is not, what we need to do to influence results, and then getting them involved in that whole process,” Buchholz says. “Along with that, we believe everybody should be treated with respect and appreciated. As an employer, it’s our responsibility to find ways to do that —to show appreciation for all that our team does.”
Skagit Horticulture does not use a guestworker program currently, Buchholz says, and with a lagging supply of labor an ongoing concern, despite being located in the agriculturally rich Skagit Valley, the organization has to remain competitive with neighboring producers. Thus, it has invested in building upgraded lunch areas and bathroom facilities in its fields for its team members, to reinforce its commitment to being a quality workplace in the area.
Skagit Launches Unprecedented Service
Uniquely positioned as a premier young plant producer, as well as a high-quality producer of finished plants at three facilities, Skagit Horticulture decided to build on that expertise by establishing the new GrowPro technical support team. New Sales Manager Dave Edenfield heads up the team of four, who will visit and provide both technical and program assistance to growers throughout the U.S. and Canada. The operation’s plants are sold through broker representatives, so the GrowPro team offers yet another layer of support to growers, due to the operation’s depth of knowledge and experience, Buchholz says.
“Not only can we provide the input, but we can also provide some technical assistance to work with growers on how to grow different varieties and what problems they might run into,” he says.
One example of this is through the operation’s relationship with Heuger Trading Company in Germany as the largest provider of its hellebore genetics of both plugs and finished products in North America. Hellebores are not easy to propagate, grow, or finish, but Skagit has found the right formula. Without shoulder season crops like hellebore, the industry is working too hard to maintain its connection with consumers, Buchholz says.
“Hellebore provide growers and retailers with an opportunity to offer a pretty high-margin product for sale at a cold, dismally dark time of year,” he says. “It’s an exciting crop that you start selling in November, clear through March. There’s a lot of plant lore about it, which provides opportunities for connection. For example, in November we held a Hellebore & Hot Chocolate event for our retail garden center customers, to help show them how to maintain that valuable connection to the consumer year-round.”
Automating and Leaning Out to Increase Efficiency
Like most grower operations, Skagit Horticulture is concerned with the dwindling labor supply, so the operation has been focusing on automating as much as possible. The operation has automated both mixing and planting of sedum, and purchased four transplanters and seven trimmers from Visser, two transplant lines from AgriNomix, and a new software ERP solution from SBI.
The operation is part of the Washington Lean Consortium, a group of agricultural businesses organized by The Peters Co., that meet weekly over the course of a year to work together and focus on developing streamlined processes for their operations. Skagit Horticulture recently hosted a Lean event focused on transplanting, and as a result Buchholz estimates the process has improved efficiency and cut the amount of labor needed in the process by 30%. The best part of the consortium is that everyone participating can take what they learned back to their operations and implement some part of it immediately, he says.
Skagit has also recently completed a retrofit on 5 acres of environmentally controlled greenhouses with a heated sub-floor in cooperation with Stuppy Greenhouse Co., Horticultural Services, and Brooks Construction. The updated range will help expand the operation’s perennial production, and provide more early season product availability to its customers. A similar project is planned for the Mabton facility in 2018.
With the company’s sense of urgency to think bigger and question everything, empowering staff and division managers to stick to a strategic plan for forward growth, Skagit Horticulture has already seen financial milestones it didn’t expect to reach, Buchholz says.
“In our first year, earnings are significantly stronger than we expected.”
Skagit Diversifies Into Wine Grapes and Hops
In addition to providing plugs and liners to ornamental producers, Skagit Horticulture is getting involved in the specialty agriculture segment, particularly in grapes and hops. Its sister company, Precept Wine, is one of the largest wine producers in Washington, and is vertically integrated with ownership of vineyards, wineries, and tasting rooms throughout the Northwest, which provides Skagit with an opportunity to produce wine grape varieties for sale to vineyards in the region.
With its Mabton facility located in the heart of the Yakima Valley, which happens to be the top wine grape growing region in the northern U.S., as well as the primary growing region for hops production in the U.S., Skagit Horticulture is well positioned for its newest pursuit to produce liner stock for vineyard and hopyard operators.
Led by General Manager Jerrin Victor, Skagit Horticulture’s ag division has taken this opportunity a step further with the recent completion of a state-of-the-art tissue culture lab at Mabton. The new lab will assist the operation in developing virus-free, clean stock, and new varieties of wine grapes and hops, providing a higher standard of genetic material, which will result in better crops for the region’s wine grape and hops producers. Currently, 3% to 5% of crops are lost due to disease annually. Clean stock will make a big difference in helping producers avoid genetic drift and guarantee genetically true plants, which should eliminate much of the risk factor, Buchholz says.
Both the wine and beer industries continue to grow, and Skagit’s expertise in producing clean young plants will allow producers to realize faster turns and quicker yields.
“We have these very large, unique facilities available to us,” Buchholz says. “We feel we are positioned to do well in the market.”