Heading into 2020, Carpinteria, California-based orchid grower, Westerlay Orchids, sees itself competing with the home décor market more so than other flower growers. Below, Westerlay’s President/Owner Toine Overgaag discusses the state of the market, what business has looked like for him and potential changes to the market.
Greenhouse Management: Where do you think the horticulture industry as a whole is right now, and how do you feel about where it’s headed?
Toine Overgaag: I don’t try to predict the future — things that we can’t control. What we can control is how good we are at what we do and how responsive we are to clients and try to be strong that way. My outlook for the market is that there’s just a wide range of possibilities. Some indicators would say that we are headed towards a recession. Other indicators say that things are continuing to be steady and should continue to be so. And, of course, there’s a lot of political uncertainty. Those are all things that we have on our mind, but at this point in time, we aren’t really changing anything we are doing in light of that.
GM: What has running a business been like for you in this type of environment?
TO: We mostly deal with very large supermarket customers. And they are seeming to be maybe not bullish, but certainly aren’t concerned. They are continuing to make plans [with us] and we’ve actually been able to do some price increases, which we’ve been very focused on. For today, we are selling to the right people. One thing that I see as potentially accelerating is not the growth of online sales, per se, but supermarkets moving to Instacart models where people are ordering products online and either picking it up or having it brought to their house. That’s something we are hearing our major customers talking about and they are putting effort into that. My concern there is that those kinds of sales models might clash with how we sell [orchids] — people going into a store, saying, “That’s a nice plant, that’s a good price, I’m going to get myself an orchid.” Are they going to behave that same way when they are shopping online?
GM: How do you approach a potential structural change to the market like that?
TO: We have a product that, in some ways, is a lot more challenging to put online and sell with a delivery van and sell online like a lot of floral products. We are engaging with our customers to ask what their plans are and asking how we can fit in with that. Do we need smaller orchids packaged in a certain way? Do we now have to match orchids to what exactly people see online, and how do we do that? And how do we package it so it can be in a warehouse, be picked up and put in a van with a grocery order? Those are questions we need to answer, and I don’t think anybody has a good answer yet.