The Orchid Explosion

The Orchid Explosion

No longer a niche crop for hobbyists, orchids have eclipsed poinsettias as the highest value crop in terms of dollars, according to USDA’s Floriculture Crops Summary, which surveys production and wholesale value in the top 15 floriculture states. While more poinsettias are produced by more growers for the Christmas season, each orchid produced generates considerably more dollars.

In 2010, 678 growers produced 36.1 million poinsettias, generating $146.1 million in wholesale sales in those 15 states. Comparatively, 176 growers produced 21.1 million potted orchids, generating $170.8 million.

“The high value of orchids likely prompted many growers to start producing this crop,” says Yin-Tung Wang, who has been at the forefront of building the market for orchids in the United States for 20 years, first as a plant physiologist at Texas A&M University and more recently as director of research and development and now sales at Matsui Nursery. Wang also serves as executive secretary of the International Commercial Orchid Growers Organization based in Taiwan.

Once a cut rose specialist, Matsui Nursery has nearly 3.5 million square feet of greenhouse production in Salinas, Calif., and just opened a state-of-the-art greenhouse in New Jersey. While phalaenopsis is the bread-and-butter orchid crop, Matsui also specializes in a range of orchid species–cymbidium, dendrobium, encyclia, epidendrum, masdevallia, miltoniopsis, oncidium/intergeneric and zygopetalum. Most of the orchids produced for mass market sales in the United States are phalaenopsis.

Connecting With Consumers
Green Circle Growers chose the “Just Add Ice Orchids” slogan to address consumers’ fear of caring for the plants, and all indications are the campaign is resonating with novices. Large, attractive tags direct consumers to JustAddIceOrchids.com, where they’ll find a wealth of supportive and engaging information and features. Social media is a big component, too.

“We’re getting 40,000 hits a month on our website and have more than 8,000 followers on Facebook,” says Green Circle’s Sales and Marketing Director Scott Giesbrecht. “We posted seven new videos in May and we’ve had 45,000 views on YouTube. Each week, nearly 100 people submit their stories on our blog for a chance to win an orchid. It’s about the connection with the consumer and teaching her. The information we’re giving her is resonating with her.”

In January, Green Circle conducted an extensive survey of more than 2,200 Just Add Ice Orchids customers, capturing their demographics, interests, preferences and experiences. The results revealed the typical buyer is a 50- to 65-year-old married woman, who owns her home and has a high school diploma. She prefers to match the pot color to her home décor instead of to the holiday or season. The styles she likes are traditional, as well as modern, but not country, earthy or antique. And she likes to display her orchid in her living room.

Most of the orchids purchased were white, pink and purple. Although she likes purple and the bicolors, the flower color doesn’t matter for the next orchid she purchases. Eighty percent of the customers rated themselves as beginners and for 78 percent, the purchase was their first orchid. While 59 percent purchased for themselves, 41 percent received the orchid as a gift, with birthdays being the most popular occasion.
Understanding consumers and satisfying their needs is the key to growing sales, Giesbrecht says. “We think there’s a lot more potential, but only if we continue to listen to the consumer and create what she sees as value. We’re also looking at taking this same approach to generate interest in other indoor potted plants.”

Salinas has become “orchid valley,” with major players including Matsui, Rocket Farms and Dutch propagator Floricultura. Florida is another orchid grower hot spot with Costa Farms, Kerry’s Nursery, DeLeon’s Bromeliads and Silver Vase, which introduced the controversial dyed blue orchid, Blue Mystique, at the Tropical Plant Industry Expo in January.

One northern grower that entered the market in a big way is Green Circle Growers in Ohio with its Just Add Ice Orchids program. MidAmerican Growers in Illinois is another production partner. Both are Van Wingerden operations. The first crop debuted at retail in February 2009 for Valentine’s Day sales.
Green Circle has partnered with European tissue culture labs and built greenhouses for European-style production. Switching to a biomass heating system offset the fuel costs involved.

“The initial journey was in two phases. We finished phase two construction last summer and will start finishing plants. It takes a while to build up inventory,” explains Green Circle’s Sales and Marketing Director Scott Giesbrecht. “As inventory and availability have increased, demand has with it. We’re seeing growth in the category and will double our availability again this fall.”

Bookings are strong and Green Circle is shipping to all 48 states and Canada. Retailers range from regional and national supermarkets, home improvement chains and mass merchandisers and wholesale clubs to smaller chains. Together, Green Circle and MidAmerican will produce 5.5 million orchids in 1.2 million square feet of greenhouse space this year.

“The dream we started with was to produce a plant that’s a great value for the consumer, which means grow a top-quality plant, drive costs out aggressively and distribute as effectively as possible,” Giesbrecht says.
Matsui’s Wang expects the market to become increasingly competitive. “The Van Wingerdens are latecomers but have done a great job producing phalaenopsis orchids with extremely aggressive and effective market strategies,” he notes. “There is no question the marketplace is extremely competitive and the price likely will continue to decline. As a result, reducing production costs becomes an important task for growers to stay profitable, or in some cases stay above water.”

Revolutionizing Production
One factor that dramatically expanded production in the last six years is the ability to import orchids as starter plants and prefinished in growing media. USDA relaxed Quarantine-37 in 2005 to allow this. “In 2010, orchid growers in Taiwan exported an estimated 400 40-foot containers of phalaenopsis by sea to the United States,” Wang says. “Many growers do not raise phalaenopis from young plants any longer and have become forcers with four to five months of turnaround time for each crop.”

This model has been successful for Rocket Farms, which went from producing zero orchids five years ago to 3 million this year. Matsui Nursery starts its orchids from flask plants, all of which are propagated and imported from offshore sources to lower costs. But most California growers import liners and mature plants for immediate forcing.

“The move currently in Taiwan is to develop means to export plants that are already forced to spike or be induced to spike while at sea with LED lighting under each tray on the racks in containers,” Wang says. “When successfully done, it will further shorten the production time of phalaenopsis in the United States.”

Other growers import liners from European sources. Floricultura is a leading breeder and young plant producer based in Holland. Its new facility in Salinas should make its products compelling for growers in California and throughout North America.

Cracking The Codes
Born and raised in Taiwan, where he earned his bachelor’s degree in horticulture from the National Chung-Hsing University, Wang has spent most of his career unlocking the secrets of orchid production. After earning his masters and doctorate degrees in plant physiology at Oregon State University, he joined the faculty of Texas A&M University as a professor.

He started researching phalaenopsis orchids in 1990, seeing great potential for the crop in the United States. “Back then, potted orchids were mainly a hobby market with many small growers and a few sizable ones that mainly engaged in cut-flower orchid production,” he says. “I started by researching the proper medium, nutrition, growth enhancement, scheduling and programming for year-round production to develop modern production technologies for future orchid growers.”

At Texas A&M, Wang’s research advanced the industry by:
–Laying the underlying foundation for the development of shipping potted phalaenopsis orchids in their original medium (sphagnum moss) and pots by temperature-controlled sea containers.
–Developing a barkless growing medium for the oncidium/intergeneric orchids that induces fast growth to cut down the production time by a year or more, while reducing water and fertilizer levels and application frequency and improving root systems. This results in more double spiking, a higher flower count and improved shelf life.
–Establishing production guidelines for growing and flowering the nobile dendrobium that requires cold treatment for flower induction. Wang developed a technology that makes these orchids bloom under noninductive temperature conditions for year-round flowering.
–Saving energy by running higher day temperatures above 86°F or greater for eight to 10 hours and then dropping temperatures to 72°F at night without spiking. This resulted in 14 to 20 percent energy savings at Matsui Nursery.

For more than 10 years, Wang was the sole orchid researcher in the United States while working on joint research projects with scientists and commercial growers in Taiwan. He would like to see orchids receive the level of research and trialing attention that poinsettias receive at U.S. universities and floriculture programs.

“Orchid growers are pretty much on their own like a stepchild,” Wang says. “Even though I’ve been working at Matsui for 3.5 years, growers still contact me for advice. But who is willing to do research on something no one funds, particularly in today’s academic atmosphere?”

Beyond Phalaenopsis
When asked why phalaenopis dominates orchid production, Wang says it grows relatively fast and can be easily programmed to spike and flower. “Taiwan has done a tremendous job to become the major phalaenopsis breeding country,” Wang explains. “Most of the varieties, including those being propagated in Europe, are Taiwanese clones. The flowers of phalaenopsis come in all colors of the rainbow and color combinations, except the true blue, which gives consumers a range of selection.” Flowers can last up to six months, providing consumer satisfaction for money spent.

Other than phalaenopsis, the group of oncidium and intergeneric orchids are increasing in popularity. “Taiwan is spending $1 million in conducting research on the nobile dendrobium with the goal of it being developed into another crop for export,” he says. “This was after I made a presentation in July 2009 of my five years research on this crop.”

Miltoniopsis, “the pansy orchids,” are large, showy and fragrant but require a cool climate and are mainly produced in central coastal California. Matsui will grow 1 million miltoniopsis in 2012. The phalaenopsis type of dendrobium orchids flower year round but require a warm climate.

Even though phalaenopsis may be on its way to becoming a commodity, the outlook the crop and orchids have as a whole is great. Growers who stay on top as leaders will continually provide new varieties, engage in efficient production to lower costs and reduce energy input and be able to predict what the market needs will be, Wang says. “As for the opportunities, let’s put it this way: only one in eight people in the United States bought one orchid in 2010,” he says. “We have the opportunity to make the pie much bigger by selling orchids to the other seven. I love to stay optimistic.”

Leave a Reply

4 comments on “The Orchid Explosion

  1. hello greenhouse,
    this is TOGA (Taiwan Orchid Growers Association),
    we would like to purchase the magazine every month,
    could you tell me the fee?
    could you send to taiwan?
    thank a lot.

  2. I enjoy reading this article and I enjoy growing Orchids its a pleasure to know more about the production of this flower. Phalaenopsis or any kind of Orchid which is very nice to see, please give/send me magazine monthly. Thank you very much Mr Wang from Taiwan you are the best . GOD BLESS US all.

  3. I am a professional orchid grower and previous grower for the AOS before its financial decline. My specialty is private collections and greenhouse maintenance. Also , i am a floral designer using orchids exclusively. Please, can anyone direct me to a job bulletin? I have been in the process of dealing with family matters and am ready to get back to work. My email: kasselorchid@yahoo.com

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