Ecke’s President Explains The Sale

Andy Higgins, Ecke Ranch President

Consolidation among greenhouse growers has become so commonplace these days that it sometimes goes almost unnoticed. The sale of a third-generation industry fixture like the Ecke Ranch, however, gets everyone’s attention. The Dutch-based Agribio Group, owners of a number of breeding and propagation companies including Fides Oro, announced its acquisition of the Ecke Ranch on August 16, 2012.

We spoke with Andy Higgins, president of the Ecke Ranch, immediately following the announcement to learn more about the reasons for the sale and the future of the company, the brand and owner Paul Ecke III.

Q: Why did Paul Ecke decide to sell the family business?
Higgins: It was really Paul’s reflection that the needs of the marketplace are changing so rapidly – and have been for quite some time. He wanted to create an environment where the company could thrive going forward.

I’ve been with the company almost 25 years. When I started, we were larger in revenue than all but our top two or three grower customers. Today, because of consolidation at the grower level, we’re maybe the size of our 25th largest customer.

The kinds of things that our grower customers, as well as retailers, are asking us to do are more and more complex, and more process and supply chain driven, in addition to the genetics. Paul realized we needed to have scope, size, depth, resources and cross-continent activity to really succeed going forward.

I think it was a bold move on his part, putting aside some of his personal desires and saying the right thing for the business is to have access to much broader resources. We’re coming up on our 100th anniversary. He really wanted his family’s name and the three generations of commitment they’ve made to the business to thrive for another 100 years.

Q: Is Paul remaining with the company in any way?
Higgins: No, he’s not. He will be transitioning out and no longer will be associated with the company. But he’s not leaving on unfriendly terms – he’ll always be welcomed here, certainly.

He intends to work in the family’s real estate businesses. I think you’re aware he has an option to sell the actual property here in Encinitas to a non-profit. So, he intends to see that through to completion. They’ve got some wonderful things they want to do here – they have some plans for an Ecke Ranch museum. He intends to be very involved in that project. He serves on a number of non-profit boards as well.

Q: Why was the Agribio Group the best fit?
Higgins: [Paul] wanted someone who respected the commitment the family has made and who would invest in that. Agribio has been making investments in the companies they purchase. They have a phrase, “Local for local.” In Europe, they have made acquisitions in roses or perennials and those local companies and their heritage have been maintained. The brands and all they represent for customers in quality, production and supply chain are being maintained. The piece that Agribio adds is some of the functions that can transcend or cross over many different companies.

One relevant example is in breeding and development. Their belief is that each of their independent companies could utilize and have access to their depth of breeding staff, technology and resources. Where our breeding team is a group of four or five individuals, they have 80 people worldwide working in R&D and product development. As we approach a new technique from a breeding standpoint, gosh, our breeders have a whole collegiate group who can answer questions and brainstorm. Maybe a change in technology in the lab or an application of something we’d never dreamed of. Now we have resources on a worldwide basis to take that forward.

Q: What changes are coming down the road after 2012-2013?
Higgins: Right now the current sales cycle and pricing are set for the coming year. We’re going to be respectful of the marketplace. [COO] Steve Rinehart and I are continuing as the leadership team going forward so the face of Ecke and engagement should all be maintained.

But after that, really what we have is a broader group of genetics worldwide. The Agribio Group didn’t have poinsettias, but they have genetics in the top five categories worldwide. They have mums, kalanchoes, roses, carnations and dahlias, and they’re leaders in all those categories. Quite frankly, those are crops that can be a perfect fit for us. For example, as poinsettias are being propagated, garden mums are filling up most of the space. So wouldn’t it be great to talk about garden mums, and provide solutions to customers since we’re already in those greenhouses talking to customers and providing technical support for poinsettias?

We want to move that forward and create value for our customers. More product, more product options and more service options for growers.

Same for the retailer. The Agribio Group has some retail programs. We have some very good retail programs as well with major retailers. For the retailer we should be able to provide them with more options and services and programs. Ultimately we’re trying to help the retailer create a shopping experience that can really capture the emotion of the transaction. If we can do that effectively, we can really add to our industry and our market space.

Q: But the Ecke brand will continue?
Higgins: Yes, the Ecke brand continues, our management team continues, the way we sell and service customers continues, the Guatemalan farms continue. That all moves forward.

Q: How integrated will Ecke be with the other Agribio Group businesses like Fides Oro?
Higgins: For 2012-2013 we want to maintain all the values our customers see in our brand, the reputation and quality and all that. Obviously, they have a good customer mix and do a great job servicing their customers with their products under the Fides Oro name. So we want to do things in a way that makes sense for the customer and the market. But that said, we will be looking for opportunities to do things jointly. I would anticipate for the 2014 sales cycle we will be working together to combine our resources.

[Editor’s note: According to Fides Oro General Manager Mark Schermer, the companies will begin integrating more fully a year from now and will present jointly at both California Spring Trials and OFA Short Course in 2013.]

Q: What will happen with the existing Ecke facilities?
Higgins: We are making a commitment to this being a breeding station and as part of the transaction have signed a multi-year lease on the greenhouses. We will be making additional investments here around the breeding efforts to make this a world-class breeding station for poinsettias.

We have also signed a lease on an office space here in Encinitas and we intend to move our administrative functions and North American headquarters to that office. After the property announcement was made in April, everybody was wondering when and where we were going to move. Now we have closure. We have a multiyear lease on offices and greenhouses. Here’s our future. Let’s get down to business and serving our customers.

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