Making financial sense

Making financial sense

Great Lakes Growers added LEDs to its operation when it realized the change offered a strong return on investment.

John Bonner comes from a family of farmers. On his father’s side, the family’s main profession has always been farming. On his mother’s side, his grandfather founded a company called BFG Supply that is now a leading greenhouse supply company. And his father founded a company called Dillen Products — later renamed HC Companies — that produces injected molded pots.

“That’s how I got into growing,” he says.

Additionally, Bonner says his family also owned a garden center and greenhouse when he was growing up. His sister would go on to found Eagle Creek Growers, a wholesale ornamentals grower. One would think Bonner would also pursue a career in horticulture when he became an adult.

As the co-owner of Great Lakes Growers — a Burton, Ohio-based hydroponic produce operation growing pesticide free, non-GMO greens and herbs — he obviously did eventually. But first, Bonner studied economics and finance at Capital University in Columbus and worked for a time at Merrill Lynch.

Eventually, though, Bonner came back to horticulture and worked with his sister at Eagle Creek before going out on his own and founding Great Lakes Growers with business partner Tim Ryan. In time, Bonner’s economics and finance background would come to influence how he approached his burgeoning hydroponics business. It also led to him switching to LED lighting after initially using HPS lighting.

“This business is a lot about production and math and planning,” he says.

 

How the business boomed

Bonner says he founded Great Lakes Growers because he saw a market demand for locally grown, pesticide-free produce.

“[We wanted] something more tailored to that wave that started five or seven years ago,” he says. “And it’s taken off from there. We were fairly early in on it.”

Great Lakes Growers specializes in two things: Living Lettuce and Living Herbs. In line with the reason why Bonner and Ryan founded the business, it sells only to other operations that are close by. This is because selling to local grocery stores, restaurants and some local markets means the consumer receives a fresher product.

Bonner says that Great Lakes Growers will continue to expand as well — betting that as they grow more, they’ll be able to sell more. In 2011, when the business was founded, the entire operation was housed in a 300-square foot greenhouse. The business soon expanded to a 3,000-square-foot greenhouse and then a 10,000-square-foot greenhouse, before expanding to its current 60,000-square-foot greenhouse.

Currently, Great Lakes Growers produces 1.4 million heads of lettuce per year. The plan is to add an acre of growing space each year with its current space allowing for up to 450,000 square feet of growing space. In that space, Bonner estimates Great Lakes Growers could produce 18 million heads of lettuce annually. And if it makes financial sense, it’s something Bonner sees the business attempting to do.

“It’s hard to make money growing on a small scale,” he says.

 

Researching new lighting options

Originally, Bonner outfitted his operation with HPS lights. He did have some LEDs on hand, and did research into them, but was not comfortable in utilizing them at that time.

“There was information out there, but a lot of it seemed to indicate to me that, ‘Wow, [LEDs] are really expensive,’ and I just didn’t see the cost benefit of them at the time,” he says. Bonner also notes that his previous experience in greenhouses was entirely with HPS lighting and that, when Great Lakes Growers was founded, HPS lighting was the industry’s norm.

What prompted Bonner and Great Lakes Growers to consider a switch to LEDs, and ultimately do so, was internal research and testing. By doing internal testing, Bonner could learn exactly what benefits LEDs offered his business.

During the business’ last expansion — which was completed in the beginning of 2016 — Great Lakes Growers built a research greenhouse in which to test LEDs. During the winter — when the business’ production normally slowed because of cold temperatures — an initial trial on lettuce was completed.

“We built this greenhouse, we spent the money, we put in a test and ran it through the dead of winter,” Bonner says. “We took data three days out of the week on size, color, spacing and grow time and plugged it into a data sheet and evaluated it.”

 

A smart investment

What Bonner found was that, for his business, Philips LEDs were worth the investment. He says Great Lakes Growers saw a 30 percent increase in production and could produce through winter for the first time. Great Lakes Growers then initiated a second trial for its herbs, but did not complete the trial before fully committing to LEDs for all of its crops.

“We saw enough return in October, November and December when we did the [herbs] trial to say, ‘Hey, this gives us significantly better quality with quicker grow times,’” Bonner says.

And while there were some nutritional issues that occurred in the first full winter with the herbs being grown under LEDs, Bonner reached out to Philips Senior Plant Specialist Dr. Abhay Thosar and Philips’ partner, automation equipment supplier AgriNomix, to solve the issues. Now, Great Lakes Growers uses 100 percent Philips LED toplighting in the spectrum of deep red/blue low blue over both its lettuce and herb ranges.

Where Bonner sees the most value in LEDs is in production. In addition to the physiological benefits of using LEDs, he says if growers evaluate their return on investment in production, the potential for yield increases with LEDs can be reason enough to make the investment.

“Are you a guy like me that’s cranking the place and is full all the time, right through the winter when it’s most important to have production because prices are potentially at their peak and the demand for local is very high?” Bonner says. “In that context, to ramp production and add increased revenue and increased profit, leads to a further return on investment.”

Photo courtesy of Philips Lighting