Success by succession

Features - Cover Story

At Takao Nursery, family members from three generations have instilled their own ideas of how the business should be run.

From left to right: President Danny Takao, Chief Financial Officer Renu Takao and Director of Operations Lisa Takao-McCall

After more than half a century in business, Takao Nursery isn’t content with playing old roles. Under president Danny Takao’s watch, the Fresno, Calif., propagator transitioned from groundcovers to native California perennials in the 1990s, and to drought-tolerant varieties in the 2000s. “We shift when we see the market is getting saturated or when there are opportunities that have yet to be fully developed,” Danny says. The nursery is shifting again now, under the leadership of Danny’s oldest daughter, Director of Operations Lisa Takao-McCall.

For the Takao family, life is steeped in the nursery. Although Lisa has heard stories of her father’s life before he took over the business in 1980, she didn’t know Danny as the long-haired surfer he once was. “This is his passion,” she says of the nursery. “It is just about his only interest.” Lisa doesn’t remember a time when the business wasn’t part of her or her siblings’ lives, either. Her younger sister, Emily, worked there before she became a defense attorney, and her younger brother, Aaron, worked there before he opened an automotive fabrication business next door.

Takao Nursery sells to both mom-and-pop operations and national growers in the Western United States. Run by the tight-knit family, it is a relatively small operation. Production is all under cover, housed within 120,000 square feet of Agra Tech greenhouses and 40,000 square feet of cold frames. Management has trouble finding employees who are willing to harvest or plant 100 to 200 cuttings per hour. But it treats the employees it does have with paid vacation and holidays, days off for child care, employee lunches and most importantly, respect.

The nursery exhibits the importance it places on human relationships by using the tagline, “Cultivating life!” Lisa, who studied graphic design at California State University, Fresno, does all the marketing for the nursery. She displays the tagline prominently in locations such as on its website and Instagram account, where photos show liners ready for shipment, and employee life behind the scenes. Lisa represents the third generation in the nursery, following Danny and his wife, Chief Financial Officer Renu Takao, and before that, founders Howard and Fumiko Takao.

A coastal creation

Born and raised in Sacramento, Calif., Danny’s father, Howard Takao moved to Japan after World War II, where his parents emigrated from in the early 1900s. Howard married a woman named Fumiko, and afterward, in the 1950s, moved back to California. Upon his return, Howard began a landscaping company near Los Angeles, which Danny says was the easiest opportunity for Howard because he was Japanese and didn’t have a college degree.

Fumiko Takao originally was born and raised in Japan. When she moved to California with Howard, she worked for various bedding plant operations in the city of Gardena. Although she spoke little English, she worked hard and eventually founded Takao Nursery in Torrance, Calif., in 1960. “The war had been over for about 15 years, so there were still some ill feelings about Japanese and Asians,” Danny says. “Her being a Japanese woman with very little English ability was a double strike against her. But my mother was a very determined woman and kept forging ahead.” In Fumiko’s 19 years running the nursery, Danny says nurserymen and landscapers were respective of her culture and gender and became good customers.

In the beginning, Takao Nursery consisted of modest facilities and equipment. Howard and Fumiko’s parents helped them build and start the nursery. Long days ensued for the entire family. Some of Danny’s earliest memories of the nursery involved his father’s mother, Fumiyo. In her several decades living in America, Fumiyo didn’t learn any English, but she did speak fluent Spanish.

“Here is a typical scene when my mother needed a job done by one of the employees: my mother speaking Japanese to my grandmother, my grandmother speaking Spanish to the employee, then turning to my mother translating into Japanese, and then my father turning to me and translating to English,” Danny recalls.

To acquire spending money, Danny and his older brothers Yugi and Kogi filled flats with soil and moved them with handcarts. Comprised of sand, topsoil and bark, the flats weighed 25 to 35 pounds. For each flat Danny and his brothers filled or moved, they earned 3 cents. “I didn’t get involved again until after I got married and then took over in the early eighties,” Danny says.

Takao Nursery performs all of its tray production in Fresno.

The second generation takes over

After Danny took over Takao Nursery, which had just been relocated to Fresno, he decided to make changes to modernize the business. “We continued on with groundcovers,” he says. “But like anything good, it got very competitive and low margins.” Danny took note of how Russ Pennington and John Wilson of Colorado Cuttings produced notable margins propagating in cell trays. In the early 1990s, Takao Nursery began offering a perennial lineup of California-style plants, and eventually delved into hardy perennial and patented variety offerings. Don Hanna of Vaughan’s Seed and Pete Kruger of Ball Seed assisted the Takaos in the transition.

When more growers began to propagate perennials, Takao Nursery made another shift; this time to low-water plants. “I would say most of our plants are low-water types, some more than others,” Danny says. The nursery’s No. 1 liner item, UC Verde Buffalograss from University of California, Davis, is used as a lawn replacement. It requires little water and fertilizer and doesn’t need mowed. Another of the nursery’s low-water offerings is Kurapia, which was originally developed as a utility groundcover in Japan.

One variety that isn’t low-water, but nonetheless stands out to Danny, is mandevilla Tropical Breeze from Oglesby Plants International. Danny says it flowers early and has no disease issues. “I was so taken by it that we will be propagating it here in Fresno for the West Coast,” he says. “It’s a true game-changer for mandevillas.”

At its Polk Avenue site in Fresno, Takao Nursery operates in gutter-connected, open greenhouses so management can see employees work. The facility has a modular design to allow for future expansion. “A module would consist of six bays for propagation connected by a headhouse and then another 10 bays for finishing the trays. Everything is stuck in the headhouse,” Danny says. The site is equipped with rolling metal benches to keep plants off the ground and prevent employees from having to bend over.

Takao Nursery performs all tray production at its Polk Avenue site. The nursery makes its own degradable pots, which are fed into a rapid water tunnel, then dibbled and fed to planters via conveyor belts. “Now, we have more options on how we develop protocols for a wide variety of plants,” Danny says. “We are constantly studying other operations and their processes to incorporate them into our facilities, always trying to improve the little things. We still have lots of problems but it’s always a work in progress.”

Danny says he gets frustrated when he sees professionals throughout the supply chain not working together to strengthen the horticulture industry. He supports the industry at large through involvement in its associations. He serves as director of Northern California for the International Plant Propagators’ Society (IPPS) Western Region and as a trustee for the Horticultural Research Institute (HRI). Formerly, he served as president of OFA, before it merged with ANLA to form AmericanHort, and he was on the Advisory Committee for the California Center for Urban Horticulture at UC Davis.

Salvia ‘Bee’s Bliss’ is one of many California natives grown at the nursery.

A new drought-tolerant lineup

After experiencing multiple droughts, including one that lasted about five years, Danny realized Californians would have to landscape differently and use water less freely. In turn, growers would have to offer new lineups of plants.

Danny had foreseen the need for drought-tolerant liners, but Lisa says he was reluctant to pursue the production change because many of the nursery’s customers preferred color. “When I got involved in production I began steering our company to almost solely drought-tolerant [and] California natives since there was a lot more room for growth in this area,” Lisa says. “With unrooted cuttings becoming more and more accessible, many growers were already growing easier varieties themselves. The only way to make a space for ourselves was to do for customers what they couldn’t do for themselves.”

Takao Nursery started propagating UC Verde Buffalograss, followed by California natives, Kurapia and southern dry region plants. “We continue to collect, trial and add as we figure out how to grow the stock all the way to produce the liners,” Danny says. “It’s been a very humbling experience — [I drink] lots of Chivas scotch at night sometimes.”

Compared to annual production, drought-tolerant perennial production allows less room for error and requires a much longer timeline, Danny says. “Drought-tolerant plants are called drought-tolerant because they can survive outdoors under some pretty extreme dry conditions and under a very low fertility regime,” he says. “To make them more productive we have to bring them under greenhouse conditions and higher feed rates. Some of the plants are okay with that scenario while others, not so much. It’s finding what each genera can take to make them produce as many cuttings as possible. It’s the same issue when we go to propagate them. There’s a very fine balance with humidity and fertility.”

Danny envisions that California and the Southwestern United States, as well as the Southeastern region of the country, will continue to have dry and wet years, but there will be more dry ones. In 2016, the IPPS Western Region held its annual meeting in Phoenix, where Danny saw natural vegetation thriving in the heat of summer with no water. He believes growers who take the time to understand native plants in their area will better position themselves to succeed.

As climate and population conditions change, Danny says native plants might become more the norm. California currently has a population of more than 39 million people, and by 2050, the population is expected to reach 50 million people, according to the Public Policy Institute of California. In making a case for water conservation, Danny cites these figures and the high costs and potential lawsuits that would accompany extensive reservoir and dam construction.

“To us, the easiest way to supply the water to that many people is to mandate water usage or increase the cost so you conserve,” he says. “We think in the new California landscape, the ‘greys’ will be strongly planted. The greys are the natives, and that means someone has to supply those liners. Hopefully it will be us.”

Over the past three years, Lisa Takao-McCall has been transitioning into the leadership role.

Generational differences

Like their father, Lisa, Emily and Aaron grew up around the nursery. “My siblings and I were at the nursery every day after school whether we wanted to be or not,” Lisa recalls. “We spent many of our afternoons making mud pies, riding bikes and catching tadpoles and frogs.” The family and the nursery, she says, “were one in the same.”

After Lisa finished high school in the late 1990s, she performed part-time work in the nursery’s office, double-checking and entering orders, filing documents and creating shipping labels. Then, she began designing brochures and PowerPoints for the nursery. While she was in college, she took on a larger marketing role.

“I began creating an image of who we were and shared that with our customers through our catalogs, website and other promotions,” Lisa says. “I enjoyed the creative reign and crafting everything from concept to execution. Every year my dad would say I was pushing it too far and I needed to make our handouts look more like everyone else’s. But how can you stand out from the crowd if you blend right into it?”

When the Great Recession hit, Takao Nursery was affected, as were other greenhouses and nurseries. At the time, Danny was following his passions by involving himself in industry associations, but Lisa says there was a lack of everyday leadership. “To be completely honest, we were supplying less-than-ideal liners and having issues with fulfilling orders,” she says. “Employee morale was struggling as well as our customers’ faith in our ability and products.” The office manager regularly received backorder and “cannot supply” notifications from the production foreman and took the brunt of many customers’ anger.

Lisa remembers in 2014, she was out to dinner with her father, her husband, Darren — a manager at Fresno-based McCall’s Nurseries — and two brand representatives. Everyone was discussing plant production, but Lisa didn’t know anything about plants other than how to market them. “I distinctly remember sitting there, having nothing at all to contribute to the conversation,” she says. “I felt entirely inadequate and the equivalent of a nice paperweight.”

Determined to do more to improve Takao Nursery, Lisa began reading about lean flow processes and took note of changes she could implement. “This set off a huge series of events in which every single department would be overhauled in the next few years from stock, to cutting procedures, planting protocols, changes in the way we prop, finish, prune, our spray program — nothing was left untouched in production,” Lisa says. She received resistance from Danny, her brother Aaron — who worked for the nursery at the time, before he started the fabrication business — and the nursery’s production staff.

Three years later, although they still disagree from time to time, Lisa and her father work together well. Production staff is content with the nursery’s changes, because it sees better products and more pleased customers as a result. After an older foreman gave Lisa difficulty, she gave him an ultimatum to accept the changes or get a new job. He decided to stay, and now, he is her “right hand.”

Since she stepped into the leadership role, Lisa has made many changes at Takao Nursery. “So far, they have all been focused around refining our products and service and clarifying our direction,” she says. “For the future I plan to make changes to our existing facilities to improve our liner hardiness and to keep mother stock under ideal conditions, yielding in more cuttings.” But for now, she wants to manage the size of the operation and continue to emphasize quality over quantity.

As for Danny, both he and Lisa agree that he will be involved with Takao Nursery for as long as he can. “Whenever he’s feeling tired or sick, he’ll say he’s going home and I’ll say, ‘Okay, see you in two hours,’” Lisa says. “And of course, he’s back in a few hours because he was bored at the house.”