Costa Farms Wins With Its Emphasis On Team, Solutions, Growth
The team at Costa Farms is driven to win. Winning is part of the culture that’s ingrained in the operation, as deeply and inherently as its Cuban-American heritage and as broadly as its operations around the globe. Team members thrive on Costa Farms’ mantra, “Humble, Hungry, Hustle,” and they live it daily, constantly working to improve operations and never satisfied with the status quo.
It’s because of that drive, and that team, and that hustle, and that hunger, that Costa Farms has grown to become one of the largest greenhouse operations in the world, and why it has been named International Grower of the Year by the International Association of Horticultural Producers (AIPH). Costa Farms is the first U.S. operation to be considered for the award, which will be announced this month at a gala during the IPM Essen show in Germany.
“Everybody wants to be a winner; everybody wants to be part of a winning team and feel special,” says Maria Costa Smith. “Any recognition for who we are today is 100% because of the team, and it gives us joy to see their pride. It is a huge motivation to continue to drive excellence for our organization.”
Costa Farms Has Thrived Under The Current Team
Costa Farms is a third-generation greenhouse operation, led by CEO and President Jose “Joche” Smith, Executive Vice President – Color Division Maria Costa Smith, and Executive Vice President – Foliage Division Jose Costa. The three owners are joined by a team of seven executives, including Charlie Acevedo, Vice President, Sales and Marketing; Doug Watson, Vice President of Information Technology; Peter Freyre, Vice President, Foliage Operation; Arianna Cabrera, General Legal Council; Jose Alvarez, CFO; Mike Estrada, Vice President, Human Resources; and LJ Contillo, Vice President, Color Operations.
Established in 1961, Costa Farms was leveled in 1992 when Hurricane Andrew hit South Florida. Not one greenhouse from before the hurricane still stands today, and all three of the current owners, then very young and fresh out of graduate school and college, were called on to take immediate leadership roles to rebuild.
“It was a very humbling experience, and a horrible thing to go through, but it made us stronger,” Jose says. “When you think of a plant that comes back really strong after you cut it back, that’s what happened to us.”
Today, the operation spans 15,071,760 square feet of environmentally controlled greenhouses, 747 acres of shadehouses, and 1,392 acres of field production. After several acquisitions and expansions, it operates in South Florida, North Carolina, South Carolina, the Dominican Republic, and China. Costa Farms continues to innovate and grow, and to drive solutions for its customers, which includes other growers, retailers, and end consumers.
All of this is possible, the owners say, because of the operation’s team of talented, dynamic, driven people. That team is the Costa Family — all 4,000-plus employees year-round, and 5,500 in the peak season.
“We have a great team and culture, and there is always an appetite to want to win all the time,” Joche says. “That’s what drives us to succeed.”
Editor’s Note: Look for upcoming one-on-one interviews with three of Costa Farms’ extraordinary plantsmen on GreenhouseGrower.com.
The Best Kind Of Social Networking
Because the team makes all things possible for Costa Farms, the operation gives back to its team in a number of ways. All employees’ children are eligible to apply for college scholarships that pay as much as 75% of tuition. And it’s not a condition to come back and work at Costa Farms, but that’s what many of the recipients of this scholarship do, Jose Costa says. At any given time, there may be as many as 30 students enrolled in the program, and it’s one that the operation is trying to expand and get its team members to use more, he says.
Costa Farms works closely with an entity called Alfalit, a worldwide literacy organization that offers programs in literacy, basic education, and job and skills training, among others. Through this partnership, more than 100 people within the Costa Farms’ South Florida locations have learned to read and write, and graduated from the program, which they are encouraged to participate in during work hours. Costa Farms’ human resources team has expanded the literacy program to its other farms in North Carolina and South Carolina, to offer workers there the same benefits.
Finally, Costa Farms’ sizable monetary contribution to a local free clinic in South Florida provides medical care to many of its team members. Maria’s involvement on the board of Homestead Hospital, the area’s largest hospital system, has initiated this development. In South Carolina, Costa Layman’s Health Fair celebrated its 10th year in 2015. The fair, organized by Debbie Layman, has provided more than 2,500 free preventative and personalized health screenings for team members over the years, including free lab work.
Costa Farms Manages Growth Through Acquisitions
Costa Farms has been through a period of rapid expansion, especially over the last three years. The operation purchased Layman Wholesale Nurseries in Trenton, SC, in 2012, which allowed Costa to enter the perennials business. In spring 2014, it acquired the business, assets, and brands of Hermann Engelmann Greenhouses, Inc. of Apopka, FL, most notably known for the Exotic Angels brand of small houseplants. Most recently, Costa Farms purchased the facilities of an orchid and bromeliad producer in Homestead, FL, moving its Desert Gems cacti and succulent production to those facilities.
The plan is to continue to grow, and Costa Farms has two ways it approaches acquisitions: strategy and value.
“The financial buy is often a good opportunity where we can purchase a property at a good value that rolls right into our operation, and that’s not difficult to assess,” Joche says. “Then there are the strategic acquisitions, which are a little more difficult because the payoff isn’t as obvious, but it may be a defensive move we’re making or something we want to invest in down the road.”
It isn’t always profitable, and sometimes a tough decision has to be made if a business opportunity doesn’t pan out, Joche says.
“We have a lot of pride, and we want to make sure that when we get into something, we give it our best and make it succeed, but at the end of the day, if the writing is on the wall and no matter whatwe do, we feel like we can’t make something succeed, we’re going to get out,” he says. “The business doesn’t have to work from day one, but we have to be able to see the light at the end of the tunnel.”
The Layman purchase a few years ago is an example of a strategy buy, which has worked out well three years in, Joche says.
“It’s been a struggle, but frankly we have a team there that has done a great job to reshape things in the perennial industry, and we finally have our heads above water,” he says. “We’re going to continue to invest in and grow that business.”
Ultimately, the best part of any aquisition, Maria says, is the talented people who become part of the Costa Farms organization.
“These people bring such breadth and history and knowledge, and are able to come into the team and become such big contributors,” she says. “We have had some amazing, really smart, sharp people join our team, to help us grow to a new level, and help us assimilate these businesses into the Costa way, and they’re always the biggest, most important and exciting part of any acquisition.”
Costa Farms Takes A Systems Approach To Business
In addition to value, strategy, corporate culture, and people, Maria says she looks at acquisitions from a systematic approach. As the head of the information technology (IT) department, she says the company has to ensure any new purchase is scaleable and fits the Costa way of doing things. Those are the questions she asks.
“Is it going to be able to fit within the system, so we can manage it, hold people accountable, have transparency and see whether we’re performing or not? The scaleability portion is very important to make sure that the businesses are compatible,” Maria says.
Managing the tasks of a company the size of Costa Farms and its affiliated businesses would be impossible without a high-powered, ERP system, Joche says.
“There is an emphasis throughout the organization on having more information available to help us manage our business,” he says. “We grow around 100 million plants a year and we manage about 2 billion tasks and resources. Every plant we grow has a recipe with all of the requirements and resources needed for that plant. We have a very robust system that allows us to track all of that, and it has allowed us to really manage costs and manage our business with data.”
Costa Farms’ investment into its IT department and ERP system has been a huge initiative in the past 15 years, and the system has truly become the core of the business, both in running Costa Farms effectively and efficiently, and in developing solutions for its customers. Ideally, Maria says, it would behoove the industry if all growers ran their businesses with an ERP system so they could understand their costs, and be able to effectively represent the wholesale industry to make better decisions.
“Knowing your costs is the ultimate pot at the end of the rainbow of investing in an ERP system,” she says. “Information is power and ultimately, that’s why we have the emphasis on IT. Once you have that power, you can be absolutely confident in making decisions that make the best business sense for your company, and then all of your business transforms. But you have to be fully committed to the management it takes to run your company that way.”
Costa Farms will continue to invest in IT as it drives forward an effort to become even more vertically integrated in the coming years, Joche says.
The operation already has invested in its own trucking company, PM Transport, and Total Growth Solutions, an entity that produces high-quality young plants for other finished growers. It has a merchandising arm, Gardenvision, as well as other merchandising offerings that fall under the Costa Farms business. Costa Far East in Guangdong, China, is the company’s global sourcing operation for its own inputs, and Global Grower Resources is a company that helps other growers source containers, metal carts, and other materials globally.
Research And Development Drives Production, Retail, Marketing, And Consumer Success
Costa Farms’ Research and Development (R&D) Department has committed to not only improving the operation but also serving as a catalyst for the industry. Everything is trialed there, from new products to growing methods, and the department shares plant trials performance results with the industry.
One major contribution is Costa Farms’ Season Premier, the event it holds annually at the same time as FNGLA’s Tropical Plant Industry Exhibition. Season Premier is a debut of new varieties for the year that have been planted in Costa’s 2-acre Trial Gardens in Miami. The operation invites breeders, growers, brokers, and retailers to see how hundreds of brand-new plants fared in South Florida conditions, which mimic early spring conditions across the country, so attendees can have a point of comparison when they see the new introductions at California Spring Trials.
This year’s Season Premier will see a larger display of Costa’s perennial offerings, and continue the operation’s relationship with breeders of all status and sizes.
Costa Farms follows up Season Premier with its summer open house in August at the Trial Garden, to show how new plants hold up to Miami’s intense summer heat and humidity. The trials include a series of beautifully designed landscape beds, row beds to compare plant performances, hanging baskets trials, and mixed-container garden trials.
Editor’s Note: Watch for coverage of Costa Farms’ 2016 Season Premier event this month! And look for an upcoming article on GreenhouseGrower.com about how Costa Farms’ Research And Development Team furthers sustainability efforts.
Costa Color Gets Vertical With Perennials Production
R&D has played a large role in Costa Farms’ development of its perennial offerings at Costa Layman in Trenton, SC, says LJ Contillo, Vice President, Color Operations.
When it first entered the perennial category through the Layman acquisition, the perennial business was fragmented and disjointed, and it was difficult to be profitable in the category because of the inconsistency of quality in young plants, he says. At the time, Costa Layman was buying up to 90% of its perennial liners, but the quality was inconsistent. In an effort to bring that quality up to the operation’s standards, Costa Farms has invested in developing its own internal perennial supply chain. Applying the same standards in annuals propagation to perennials will improve the internal supply chain and potentially impact the way perennials are grown throughout the industry, says Menachem Ganon, who joined Costa Farms in April 2015 to help the operation with supply chain management of the category. Ganon is responsible for establishing perennials production at the former Florexpo in Costa Rica, among other accomplishments.
“We are excited to have his experience complement our existing annual and perennial team, and continue to develop our supply chain in the future,” Contillo says. “This development helps us save money and also improves our use of space at our annual and perennial farms. This increases our quality control and fulfillment, so we can better serve our customers.”
Ultimately, the operation wants to control more than 90% of its own inputs. It’s currently supplying about 70% of its own liners, but by bringing the farm in the Dominican Republic online to grow mother stock for the perennial farm this year, cuttings production will reach 4 million, and Ganon says he expects that to double within a year.
Color Is The New Green In Foliage And Houseplants
Well known for its anchor crops in houseplants, bromeliads, and orchids, Costa Farms is taking a whole new approach to foliage, in an effort to “color up the greenhouse.”
The team has been working hard to launch a new line of aglonemas, starting a couple of years ago with two varieties producing 200,000 plants, and now has a half dozen varieties and several hundred thousand plants, with another dozen and a half new varieties in the pipeline, Jose says.
In an effort to find those unique and exotic foliage varieties, Mike Rimland, Director of R&D for the Indoor Plant Division, travels to places like Thailand, Indonesia, Africa, and Australia. The goal is certainly to find new varieties, but always with an eye for quality and value to the end consumer.
“Foliage is different from the rest of the industry in that there are very few professional breeders of indoor plants. It’s not like working with the large annual breeding companies,” Rimland says. “On this side of the business, it’s basically a plant hunt, where you see if you can find something different, and you hope you can reproduce it, and it will hold up to shipping. But in the end, if it’s not going to be good for the end consumer, we don’t develop it.”
Rimland says Costa’s Indoor Plants Division has many new and exciting plants in development that will change the way we look at houseplants.
“It’s going to change the the indoor shelf, completely,” he says.
Rimland also helped implement WaterWick, a product that has been in soft launch for the past two years from Costa Farms in the U.S. and from Visser in Europe, as a retailer and consumer solution that could increase value and sales of houseplants.
“WaterWick is a simple, self-watering program that simplifies watering for the garden center and for the consumer,” Jose says. “Any plant that we grow, we can insert a wick upon departure at a very small cost. We can inexpensively retrofit benches or fixtures at any garden center, so watering can be done once a week at 10% to 20% of the typical watering expense.
Through a capillary effect, plants take up the water as needed, solving the watering issue at retail and pesky task for consumers. Costa Farms’ retail customers have agreed to in-store trials this year, Jose says.
Helping Consumers Win Is The Ultimate Goal
Everything Costa Farms has invested in — from R&D to IT, and marketing campaigns for its many “brandchildren” — and everything the operation and its team works toward, is done ultimately with one goal in mind: making consumers successful with plants. Making plants “cool, fun, and easy” is critical to driving new demand for plants, especially among the younger generations. The evolution of the garden center is one way to attract young buyers by incorporating more technology and innovation, and it’s an initiative Costa Farms is working toward for the future.
“The one constant is change,” Jose says. “The cell phone, the computer, the car, the T.V. have all changed, so the garden center and the plants need to change, too. Even the way people buy fruit has changed — people bought very little pineapple until it was precut. Now pineapple sales are 20 times what they were 15 years ago! That’s because they made it cool, fun, and easy. We need to make that transition in our industry. We need to change.”
Editor’s Note: Stay tuned for upcoming articles on Costa Farms’ marketing efforts on GreenhouseGrower.com.