Barcelo: ‘Industry Is Lost Now’

Barcelo: 'Industry Is Lost Now'

As part of our State Of The Industry report, we asked industry leaders to answer questions about the state of all things greenhouse floriculture. Tony Barcelo, vice president at Barcelo Enterprises in Salinas, Calif., shares his take on shares his take on the state of the industry this week.

How would you describe the state of the greenhouse floriculture industry today?

I think the biggest problem in our industry is the industry has consolidated. As a larger grower on the West Coast, our outlets have shrunk to five or six customers. The economic situation, especially in California with the housing crash, has really devastated the market. California, Nevada and Arizona have extended markets. It’s not the same as in the Northeast, where a season is a season. You plant or you don’t. It’s hard to spend money on plants if you don’t know if you’ll be living in your house. If consumer confidence doesn’t turn around, I don’t know how long Home Depot and Lowe’s can withstand this downturn.

We have big conglomerates using Wall Street money who don’t have the same rules as the rest of a mom-and-pop industry. The tragedy is so many good nurseries like El Modeno (Gardens) have to leave the industry. The bankruptcies filed by Hines (Nurseries) and Bordier’s (Nursery) are indicative of the state of the industry.

Nurseries ramped up, expanded, over-capitalized and had a surplus of inventory, which drives prices down. We have a recipe for disaster with what has been going on. My biggest concern is deflationary pricing. Will it come back? Once buyers and consumers are trained on price, will the consumer buy again at the normal cost?

Has there been a changing of the guard in industry leadership?

I think the industry is lost now. I don’t think there is leadership. I don’t think there’s an area of the industry that’s solid. Everything is in limbo.

My father, who is 69, was in the industry for 40 years. Old guys like him were mentors to me. When they sit back and see how the industry has evolved, you’d like to think they’d be proud of where the industry is at and they really are not.

What are the greatest challenges growers are facing today?

For growers, it’s not even about plants anymore but merchandising, rebates and in-store service. Retailers want to take their hands off and don’t want to incur any shrink. The boxes want every store to look alike and be perfect. I don’t believe one grower entity can do it, all under one management system.

The industry is too specialized. It takes a lifetime to become an expert growing certain crops. Yes, there can be contract growing, but the expertise in growing has to stay. The Bell Nursery model sounds good, but how can you be competitive from a price point if you’re buying in from others? It opens the door to competition. A lot of big retailers want the lowest price and they want to pass the costs of shrink on to the end consumer.

When I became a grower, I didn’t know I’d be doing marketing and logistics in addition to growing. You better know what you’re doing or you’ll learn a lot the hard way. I’m gonna survive this no matter what, but it’s hard when you work like an animal for countless hours and you are so subjected to forces beyond your control–people making decisions who have never visited your facility. You did nothing wrong, yet, they’re going to penalize you. We’re so ramped up to do business with the large retailers. We have the trucks, drivers, staff and infrastructure needed to process hundreds of orders a day. It takes a lot to get that done and it costs money.

Leave a Reply

19 comments on “Barcelo: ‘Industry Is Lost Now’

  1. This is to negative for me. I agree Greenhouse business isnt what it was in the 80s or early 90s. There is more competition and even some overproduction. We have had to adapt and change. Some of the changes we made should have been made sooner we needed to make a transition from expansion to improvement. I have a positive outlook for the future. For me growing is still a good living and a rewarding career.

  2. I feel bad for Tony. Maybe I have my head in the sand but I think there is a ton of opportunity in our industry and that we are in better shape than many others. As for having to expand your understanding of different aspects of business, it is a challenge and an opportunity for personal growth.

  3. If we would not have got into the credit trap, we would not be in the situation we find ourselves nearly as bad.

    The fact we can expand on “someone else’s money” meant it was easier to “expand” capacity and breed new varieties with no thought of whether they would work for the end customer.

    That put us into the treadmill of growing for the “banker” not for the “market”, that which we haven’t killed yet.

    Why do we feel we need “fewer” and “larger” suppliers?

    If everyone did “minimal to no” credit, we all would have enough food to eat and more people would be in the game making a decent living and the cost would be fair.

    Ahh! But the “love of money” comes into play does it not??

    Most of us are “afraid” to “cut back” because we “worry” about some one else gettin “more” of the “pie”.

    So now we are being “cut” back by “economic reality”.

    We have taken the “human” element out of the business and inserted the “bottom line” at all cost, neglecting the “human bottom line”.

    That’s how the big get bigger and the mid to small get squezzed out. (I don’t see that as an accident.)

    People who have jobs in horticulture spend money too, so the more we eliminate to “efficiencey” the less money hort has have to go into the market.

    Efficiency can only go so far and then it gets counter productive by “eliminating” low skill entry level work which give the lower income people a shot at economic success. (The human cost factor.)

    To be fair, a lot of field jobs are “beneath” a lot of native American kids who think the computer and “college” are where it’s at.

    That is why “aliens” can come in and do the work that we “don’t want to do”.

    I don’t see crews of “caucasions” out there in the fields picking our produce and nursery stock much, do you??

    I could say more but to say the least the small guy better have a good niche and do it well.

    He also better be ready to diversify into “edibles”
    again.

    There seems to be a market for “safe” and “tasty” produce.

    In my area, “eating” takes priority over “ornamentals”.

    As a side note, we don’t have nearly 60 million potential customers due to some really bad moral decisions in 1973 which are now legal. (You figure it out.)

    Oh, by the way, I am optimistic about my future.

  4. Can you believe that I actually OPENED a business in ’09? I am small and will grow as I can afford. I rely on small local growers to provide me with quality crops I can not grow in my cold houses. I do grow edibles as well and will expand this market. We strongly believe that we will provide our customers the highest quality product at the most reasonable price we can afford. I took a gamble on myself, and figured that I would earn more on my business than I would at a bank or broker house, so I opted to invest in myself. I do not want “box shoppers”. We can make a decent living and be happy doing so staying small and I mean under 3 acres of production. How much do you really need? Once you remove the ego, you’d be surprised how happy you can become. Best of luck to all for a green 2010.

  5. A crucial part of this current situation is related to his comment …”When I became a grower, I didn’t know I’d be doing marketing.” That has been an ongoing weakness in our industry that I have been warning growers about for many years. We know how to grow plants but few in the industry have taken the time to learn how to market plants. We have been very fortunate in the steady growth our industry has seen for decades (at least here in Oregon). Now, we have to face a situation that many other industries have seen before. Lack of leadership and a lack of marketing. Both are serious detriments to our success.

  6. I can see Tony’s points. But why is nobody mentioning the elephant in the room, the anti-Capitalist, anti-American government in Washington DC? We have a Marxist fascist President that is destroying our capitalist economy as fast as the Democrats in Congress can support him. Want things to get better? Vote for capitalists not Democrats.

  7. In response to Miles, the “industry” has been putting in extra effort to market their businesses. Education is available through the many Associations, Trade Shows, even University Extensions. I see these events well attended with growers attentive and eager to implement this new knowledge. Then reality hits and we growers have to finance the Marketing plan. Television, Radio, Print Ads all equal big bucks. Contact any one of the above without a minimum budget equivalent to an arm and a leg and the warm reception you received at the initiation of the conversation turns icy cold. The advertisers will tell you, “You have to spend money to make money”, what they really mean is “Any money you are making we will be happy to take”. I don’t think lack of marketing is the problem, lack of being able to finance that marketing is.

  8. I’ll add a commment to JBGP. Yes, plenty of marketing is going on but the problem isn’t paying for marketing, it is paying for marketing that doesn’t work. A lot of companies are paying to market a bad product which brings it down even faster, and most of the others are marketing badly – just buying advertising space for a bad message. We need to stop assuming people want the plant at a lower price and begin marketing that attracts the people who haven’t decided they want the plant in the first place.

    The maturity of our industry has caused too many people – including most of the “industry” establishment to focus on low price and high volume and that is undermining the real value of the product. The very people who cater to the volume of the boxes are fighting the low margin they get from it. Okay so they get a bigger house by selling more cheaper but the overall health of the industry is declining.

    I’m not complaining – just observing – and helping my clients market the real value of the product. It’s differentiation and that is what marketing is all about. This is life. Let’s get real or let’s not play.

  9. This is to negative for me. I agree Greenhouse business isnt what it was in the 80s or early 90s. There is more competition and even some overproduction. We have had to adapt and change. Some of the changes we made should have been made sooner we needed to make a transition from expansion to improvement. I have a positive outlook for the future. For me growing is still a good living and a rewarding career.

  10. I feel bad for Tony. Maybe I have my head in the sand but I think there is a ton of opportunity in our industry and that we are in better shape than many others. As for having to expand your understanding of different aspects of business, it is a challenge and an opportunity for personal growth.

  11. If we would not have got into the credit trap, we would not be in the situation we find ourselves nearly as bad.

    The fact we can expand on “someone else’s money” meant it was easier to “expand” capacity and breed new varieties with no thought of whether they would work for the end customer.

    That put us into the treadmill of growing for the “banker” not for the “market”, that which we haven’t killed yet.

    Why do we feel we need “fewer” and “larger” suppliers?

    If everyone did “minimal to no” credit, we all would have enough food to eat and more people would be in the game making a decent living and the cost would be fair.

    Ahh! But the “love of money” comes into play does it not??

    Most of us are “afraid” to “cut back” because we “worry” about some one else gettin “more” of the “pie”.

    So now we are being “cut” back by “economic reality”.

    We have taken the “human” element out of the business and inserted the “bottom line” at all cost, neglecting the “human bottom line”.

    That’s how the big get bigger and the mid to small get squezzed out. (I don’t see that as an accident.)

    People who have jobs in horticulture spend money too, so the more we eliminate to “efficiencey” the less money hort has have to go into the market.

    Efficiency can only go so far and then it gets counter productive by “eliminating” low skill entry level work which give the lower income people a shot at economic success. (The human cost factor.)

    To be fair, a lot of field jobs are “beneath” a lot of native American kids who think the computer and “college” are where it’s at.

    That is why “aliens” can come in and do the work that we “don’t want to do”.

    I don’t see crews of “caucasions” out there in the fields picking our produce and nursery stock much, do you??

    I could say more but to say the least the small guy better have a good niche and do it well.

    He also better be ready to diversify into “edibles”
    again.

    There seems to be a market for “safe” and “tasty” produce.

    In my area, “eating” takes priority over “ornamentals”.

    As a side note, we don’t have nearly 60 million potential customers due to some really bad moral decisions in 1973 which are now legal. (You figure it out.)

    Oh, by the way, I am optimistic about my future.

  12. Can you believe that I actually OPENED a business in ’09? I am small and will grow as I can afford. I rely on small local growers to provide me with quality crops I can not grow in my cold houses. I do grow edibles as well and will expand this market. We strongly believe that we will provide our customers the highest quality product at the most reasonable price we can afford. I took a gamble on myself, and figured that I would earn more on my business than I would at a bank or broker house, so I opted to invest in myself. I do not want “box shoppers”. We can make a decent living and be happy doing so staying small and I mean under 3 acres of production. How much do you really need? Once you remove the ego, you’d be surprised how happy you can become. Best of luck to all for a green 2010.

  13. A crucial part of this current situation is related to his comment …”When I became a grower, I didn’t know I’d be doing marketing.” That has been an ongoing weakness in our industry that I have been warning growers about for many years. We know how to grow plants but few in the industry have taken the time to learn how to market plants. We have been very fortunate in the steady growth our industry has seen for decades (at least here in Oregon). Now, we have to face a situation that many other industries have seen before. Lack of leadership and a lack of marketing. Both are serious detriments to our success.

  14. I can see Tony’s points. But why is nobody mentioning the elephant in the room, the anti-Capitalist, anti-American government in Washington DC? We have a Marxist fascist President that is destroying our capitalist economy as fast as the Democrats in Congress can support him. Want things to get better? Vote for capitalists not Democrats.

  15. In response to Miles, the “industry” has been putting in extra effort to market their businesses. Education is available through the many Associations, Trade Shows, even University Extensions. I see these events well attended with growers attentive and eager to implement this new knowledge. Then reality hits and we growers have to finance the Marketing plan. Television, Radio, Print Ads all equal big bucks. Contact any one of the above without a minimum budget equivalent to an arm and a leg and the warm reception you received at the initiation of the conversation turns icy cold. The advertisers will tell you, “You have to spend money to make money”, what they really mean is “Any money you are making we will be happy to take”. I don’t think lack of marketing is the problem, lack of being able to finance that marketing is.

  16. I’ll add a commment to JBGP. Yes, plenty of marketing is going on but the problem isn’t paying for marketing, it is paying for marketing that doesn’t work. A lot of companies are paying to market a bad product which brings it down even faster, and most of the others are marketing badly – just buying advertising space for a bad message. We need to stop assuming people want the plant at a lower price and begin marketing that attracts the people who haven’t decided they want the plant in the first place.

    The maturity of our industry has caused too many people – including most of the “industry” establishment to focus on low price and high volume and that is undermining the real value of the product. The very people who cater to the volume of the boxes are fighting the low margin they get from it. Okay so they get a bigger house by selling more cheaper but the overall health of the industry is declining.

    I’m not complaining – just observing – and helping my clients market the real value of the product. It’s differentiation and that is what marketing is all about. This is life. Let’s get real or let’s not play.

Latest Stories
Cannabis In Greenhouse

July 27, 2016

The Top 5 Myths About Cannabis Production Cleared Up

There is a lot of misleading information going around about growing cannabis. Industry insider James Lowe makes sure you know the truth about cannabis production.

Read More
Joe Bischoff

July 26, 2016

SAF Partners With Cornerstone Government Affairs To Adv…

A new partnership between the Society of American Florists (SAF) and Cornerstone Government Affairs ensures that SAF will continue its highly effective work advocating for issues that affect the floriculture industry. “SAF and Cornerstone together provide experienced voices on Capitol Hill to protect our growers’ interests,” says SAF CEO Peter Moran. “We’ll continue to move major policy priorities forward on behalf of small business and agriculture.” Cornerstone is a public affairs firm specializing in government relations, strategic consulting, and advocacy. Its team of more than 50 senior professionals includes former senior professional staff from both authorization and appropriations committees and the U.S. Department of Agriculture (USDA), as well as veterans of the horticulture industry. Agricultural and horticultural issues of primary concern to SAF members include access to labor, immigration, crop protection, international trade and other matters related to the day-to-day operations of growers. Before she retired this year, SAF lobbyist Lin […]

Read More

July 26, 2016

AFE Releases New Videos Highlighting Industry Successes

The American Floral Endowment (AFE) recently released five new videos, created to highlight floriculture successes through industry collaboration, support, and participation. “Each video shares real stories from industry members on career development through scholarships and internships, and true examples of research solutions that have shaped how the industry operates today,” says Laura Shinall, President of Syndicate Sales, Inc., and AFE Public Relations and Development Chair. “We’re excited to be able to share some great success stories in an effort to increase industry participation.” The introductory video “Heard of the American Floral Endowment?” helps educate those who aren’t currently aware of AFE’s programs, while other segmented videos (retail, wholesale, grower) share how Endowment programs complement each group and why it’s so important that everyone in the industry participates: Retail Florists Share Why They Turn to AFE New Resources for Floral Wholesalers and Suppliers AFE Helping Growers Profit Ready for a Career in Floriculture or Horticulture? […]

Read More

July 26, 2016

How Your Retail Plant Sales Practices Compare

Editor’s note: Greenhouse Grower RETAILING asked growers and retailers to share their pricing methods in a survey sent out in mid June 2016. Of the 362 responses, 202 arefrom those whose primary business is garden retail. We will be sharing the results of what we learned throughout July, August, and September 2016.   Discounting plants is a finely wielded weapon for plant retailers, Greenhouse Grower RETAILING‘s Plant Pricing Survey shows. It will come as no surprise that just about everyone holds sales at some point (93%). And so it makes sense that some expertise is shown. Take this first graph as an example. The most perishable plants — small annuals and vegetables — are the most likely to be placed on sale. That seems counter-intuitive. Why place the fastest turning inventory on sale? But when we took a closer look, we found that these sales are being used to lure […]

Read More
IGC 2016 Valley Forge Casino Resort

July 25, 2016

New Products You Can See At EIGC

With all exhibitor booths sold out at both EIGC and IGC Chicago, there will be plenty of new products for attendees to check out.

Read More
Aphids On Older Leaves

July 25, 2016

How You Can Stop Aphids By Understanding Their Interact…

Knowing which aphids target which crops and how aphids colonize and move on plants goes a long way toward setting up an effective management plan.

Read More
Jeremy Kingsley

July 25, 2016

Cultivate Keynote Speaker Highlights Seven Principles O…

In his morning keynote address at Cultivate’16, best-selling author and speaker Jeremy Kingsley noted that if you want to make your business better, the process should start with making your people better by inspiring them.

Read More
Top 100 2016 Lighting Feature Image

July 24, 2016

Horticultural Lighting Conference To Take Place In Chic…

The one-day event is designed to provide cutting-edge information on the latest technologies and techniques impacting the advancement of the horticultural lighting market.

Read More

July 23, 2016

AmericanHort Kicks Off Cultivate’16 By Announcing Major…

Even though Cultivate’16 just wrapped up, it’s not too early to find out about the many changes you can expect for 2017.

Read More
Workers

July 23, 2016

5 Reasons To Invest In Employee Training

Training and developing your employees is critical to the future success of your organization and the horticulture industry at large. Here are five reasons why your employees are worth the effort.

Read More
Pleasant View Gardens Savor Edibles

July 22, 2016

Pleasant View Gardens Targets Millennials With Savor Ed…

Taking something as ubiquitous as vegetables and herbs and giving it a fresh new look is no easy task, but Pleasant View Gardens took on the challenge with extensive research and creative marketing.

Read More
Dummen New Columbus Office

July 21, 2016

Dümmen Orange Opens New North American Headquarters In …

The new office, which officially opened during Cultivate’16, supports the company’s vision to be integrated into a vibrant and inspiring community, and provides a bright, modern workspace for its approximately 30 local employees.

Read More
BeeSmart

July 21, 2016

How You Can Get Involved In Research

The Horticultural Research Institute (HRI) supports scientific research and students for the advancement of the horticultural industry.

Read More
Pollen Free Lisianthus

July 20, 2016

Sakata Seed Develops World’s First Pollen-Free Lisianth…

With no stamen to produce pollen, the new Lisianthus varieties have improved flower durability and the benefit of no scattered pollen that can cause staining of flowers and machines.

Read More
Floral Greenhouse at Vineland Research Centre

July 20, 2016

Research And Commercialization Unite At The New Vinelan…

The new, pre-scale commercial greenhouse facility at Vineland Research and Innovation Centre in Vineland Station, ON, will help accelerate the commercialization of innovative technologies and products coming out of research.

Read More

July 20, 2016

How To Prevent Greenhouse Heating Leaks

Ethylene from malfunctioning greenhouse heaters can lead to crop injury, while carbon monoxide can lead to worker illness. Know the symptoms and how to check greenhouse heaters to avoid these concerns.

Read More
Luxflora Flower Run

July 20, 2016

First-Ever Flower Run Was A Big Success, Luxflora Says

Kicking off Cultivate’16 on Sunday, July 10, Luxflora’s first annual 5K saw nearly 150 participants racing through the picturesque Scioto Audubon Park in Columbus under clear blue skies and perfect conditions. It was a great way to start the week, participants said. Congratulations to the winners of the first-ever Flower Run: First Place: Jacob Griffith Gardner Second Place: Mike Goyette Third Place: Jack Ford The top three winners — and all of the Flower Run participants — were showered with flower petals when they crossed the finish line, making for a colorful and fragrant finish to an invigorating experience. “Personally, I would consider it a grand success,” says Luxflora President Rebecca Lusk. “The overall mood was fantastic, from start to finish. There were many high fives and group hugs, numerous duo phone selfies and postings to social media, while participants enjoyed their bananas and bottled water donated by Experience Columbus. Most […]

Read More
Top 100 Breakfast Panel for 2016

July 19, 2016

Top 100 Growers Talk Labor, Automation, And Sustainabil…

More than 60 growers got up with the sun at Cultivate’16 to hear a four-person panel discuss hot topics such as labor, automation, and sustainability at Greenhouse Grower’s Top 100 Growers Breakfast, sponsored by BASF.

Read More
[gravityform id="35" title="false" description="false"]