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As part of its consortium webinar series, GLASE highlighted the “most detailed and accurate” greenhouse production assessment in its most recent webinar, “CEA Market Trends: 2019 USDA Census of Horticultural Specialties.”

The virtual evaluation was hosted by Executive Director Erico Mattos. He covered data retrieved from the 2020-released USDA National Agricultural Statistics Service, and reviewed the market trends of floriculture and food crops grown under protection in the U.S. He also analyzed crop type and market value as well. Below, is a recap for those who could not attend.

Market value overview

According to the 2019 Horticultural Specialties Market, the CEA market value was a whopping $6.5 billion, with food crops grown under protection making up 11%, cut cultivated greens at 2%, cut flowers and cut lei flowers at 6%, foliage plants for indoor or patio use at 11%; potted herbaceous perennial plants at 15%, annual bedding/garden plants at 36% and potted flowering plants for indoor or patio use at 19%.

While the market value is in the billions, Mattos noted that when compared to data from 2014, five out of seven categories experienced market shrink.

Food crops grown under protection

In comparison with the 2014 data, the value of sales from food crops grown under protection has decreased by 11.7%, while the number of farms has increased by the same percentage. Between 2014 and 2019, sales have gone from $796,664 to $703,469. When compared with sales from 1998, however, there is a visible increase of about $480,000 with 1998 earning a total of $222,624. For operations, this category has seen an increase all around, with 2,994 notable farms in 2019, compared to 2,521 in 2014 and only 1,015 in 1998.

The main crops that were analyzed in this category were cucumbers, herbs and cut fresh, lettuce, peppers, strawberries, tomatoes, and others, with additional crops not specified. “What was interesting is that [during market segmentation by crop] tomatoes represented the vast majority of the area under protection food crops at about 60% and for the value of sales, it represented about 50% as well,” Mattos said. “The worst one was strawberries, with representation of 0.74% in the area under protection and 0.13% in sales.” When compared with revenue per square feet, however, crops in the “other” category earned $15.60 while tomatoes earned $6.60.

Annual bedding and garden plants (flats, pots and hanging baskets)

Compared to 2014, the value of sales in annual bedding and garden plants has decreased by 12.6% with earnings reported as $2,244,460 in 2019 and $2,567,534 in 2014. However, both numbers show noticeable growth when compared to 1998’s sales of $1,729,949. The number of operations saw a decline as well, with a 16-percentage decrease between 2014 and 2019, with 7,964 reported farms in 2014 and 6,687 in 2019. This category overall, has seen a decrease in operations since its count in 1998 was 9,215. When compared by market segmentation, wholesale growers earned 78% of profits by earning $1,757,547 and retail earned 22% of the profit with a reported $486,913 value of sales.

Potted herbaceous perennial plants

In 2019, the value of sales in potted herbaceous plants decreased by 2.4% with earnings reported as $922,616 compared to $944,850 in 2014. However, 2019 experienced an increase compared to 1998’s sales of $627,236. While the value of sales has grown since then, the number of operations has steadily declined, with an 18.8 percentage decrease between 2014 and 2019 with 6,291 farms reported in 2014 and 5,108 reported in 2019 — both lower than the reported 7,391 operations in 1998. When segmented into markets, potted herbaceous perennial plants sold in wholesale made up $775,990, and the same plant segment sold at retail comprised $146,716, therefore, leaving wholesale sales at 84% of the total earnings, and retail at 16%.

Potted flowering plants

Potted flowering plants for indoor and/or patio use have increased in popularity, which is reflected by a 10.7-percentage increase between 2014 and 2019. When compared to 2014, the value of sales was $1,084,274 then and $1,200,387 last year. Data also shows that the value of sales has increased overall since 1998, with initial sales being $868,131. While the value of sales has grown, the number of operations has not, with data showing a 2% decrease in the last five years. In 2014, there were 4,059 operations and in 2019, there were 3,977 — both lower than 1998’s report of 5,080. When segmented, wholesale sales made up 90% of the total value with earnings reported as $1,083,169 in total, and earnings by retail made up 10% with earnings reported as $111,217.

Foliage plants

Pots and hanging baskets were another category that experienced market shrink. In 2019, the total value of sales was $691,472 — a 4.2-percentage decrease compared to 2014’s sales of $721,889. However, 2019’s sales still remain higher than 1998’s reported $594,760. As for operations, those too, have seen a decrease with 2,336 reported in 2019 compared to 2,644 in 2014 and 3,074 in 1998. When segmented, wholesale stole the show again, making 97% of total sales and bringing in $667,974, compared to retail’s 3% contribution of $23,498.

COVID-19’s impact

In 2020, our sister magazine Garden Center, published the 2020 State of the Industry report (which can be found here bit.ly/32klhei) with an emphasis on the coronavirus’ impact. GLASE highlighted the research in this webinar and per the data, 50% of operations were impacted a great deal; 21% were impacted a lot; 18% were impacted a moderate amount; 7% were impacted a little and 3% weren’t affected at all. Sales wise, 71% of operation experienced an increase in their earnings; 18% experienced minimal change, 1% did not experience any change at all; 4% experienced a somewhat decrease in sales and 7% of operations experienced a significant amount of decrease. In regard to pickup and delivery, 78% of operations offered curbside pickup; 62% offered phone ordering; 45% offered online shopping; 42% offered order delivery; 8% offered online classes and 5% offered other, unspecified options.

Industry investments

Although COVID-19 impacted the industry in many ways, there were a host of investments that may lead to future growth. Per the collected data, App Harvest invested $475 million in tomatoes; Plenty invested $140 million in leafy greens; Bright Farms invested $100 million in leafy greens; Little Leaf Farm invested $90 million in leafy greens; Gotham Greens invested $87 million in leafy greens and herbs; Greens Empire Farms invested $72 million in berries, tomatoes, cucumbers and peppers; Revol Greens invested $68 million in leafy greens; Shenandoah Growers invested $66 million in leafy greens and herbs and Upward Farms invested $15 million in microgreens, making the total amount of investments $1.1 billion.

Some names may look familiar, since our sister magazine Produce Grower ventured inside AppHarvest and its growing facility (which can be accessed here bit.ly/3dQV0tG); highlighted Gotham Greens’ upcoming plans (which can be found here bit.ly/3d8YloL); spoke with Plenty about its push for retail (which can be read here bit.ly/3sdKJg6) and Revol Green’s drive for local (which can be found here bit.ly/3t9lYTL).

“Although the volume of sales came down in 2019 — and we are a little surprised with that — we thought it would be a good idea to show where the market is going next, or where we think it’s going next, by showing 2020’s investments in horticulture specialties cultivated in CEA,” Mattos said. “We are hopeful in its growth.”

To access this webinar and more alike, visit glase.org/resources/webinars.

"Downy” mildew gets its name from the white to grey fuzzy-looking sporulation produced on the underside of leaves. Making rank beside Pythium and Phytophthora, downy mildew pathogens belong to a group of fungal-like organisms called oomycetes. Notoriously difficult to control, these pathogens thrive in cool, moist conditions. Unlike true fungi, oomycetes (also called water molds) produce motile swimming spores, called zoospores, that swim in surface water until they find suitable tissue to infect.

For downy mildews in particular, managing humidity and leaf wetness is key to limiting disease.

Downy mildews cause disease on a wide range of host species, but individual pathogens are fairly host specific. This means the downy mildew species that cause disease on roses are not the same species that cause disease on impatiens. Unfortunately, there are plenty of downy mildew species to make the rounds. In addition to roses and impatiens, downy mildew can be a predictable pest on numerous other crops including veronica, coreopsis, phlox, alyssum, snapdragon, basil, coleus, and viburnums.

The primary means of pathogen spread is through infected propagative material and airborne sporangia, although spread for some of these diseases is by seed. Spores can travel great distances in air currents – think tropical storm events and hurricanes. Once inside a greenhouse, spores can circulate and spread rapidly through vent systems. Some species also produce thick-walled, survival spores, called oospores. These spores can persist or overwinter in infected plant material, organic debris, cull piles, or landscape plantings.

Downy mildew diseases can progress rapidly, so early detection and intervention is critical to minimize losses. The downy sporulation that gives this disease its namesake is not always present and since this sign is produced on the underside of leaf tissue, it may easily be overlooked. Early symptoms of disease may be subtle and can go undetected for some time. Be on the lookout for plants exhibiting stunted growth, cupped, twisted or distorted foliage, or yellow to brown angular leafspots (often vein-delineated). These symptoms are often mistaken for other issues including spray damage, nutritional deficiencies, or insect infestations.

If the leaves start dropping, there’s no stopping

Downy mildew doesn’t discriminate by age as young seedlings are susceptible along with mature plants. Downy mildew can cause severe stunting when plants are infected young whereas older plants may only exhibit leaf lesions. Since all downy mildews are different, generalizations in symptomology across host species, or even cultivars, is not possible. For example, the now infamous impatiens downy mildew causes complete defoliation and can wipe out entire plantings of Impatiens walleriana if conditions are favorable for disease.

Proper sanitation is important to reduce inoculum, limit spread, and manage disease. Once leaves have started dropping from the plant, the disease has most likely progressed to the point of no return. Sometimes it can be hard to accept defeat but recognize when it is time to bust out the trash bags and see those plants to the door. Severely affected plants should be bagged up in the production area and removed off-site. Pay careful attention to not scatter any spores on your way out. After diseased plants are discarded, spray and protect the remaining plants with fungicides.

Check ID at the door

Do not confuse downy mildew with powdery mildew. Although both sound like something sweet, they are not even second cousins genetically speaking or in the context of control options. For downy mildew, we need oomycete-specific or specialist fungicides in the mix for best control. When in doubt, send symptomatic plant samples to your local cooperative extension office or a diagnostic laboratory for a definitive diagnosis. The chance of successful management increases exponentially when you start out with the right diagnosis and the right fungicides.

Fungicides to the main stage

Downy mildew pathogens are prolific sporulators and at high risk for fungicide resistance development when fungicides with the same mode of action are used repeatedly. Most of our modern fungicides have single-site modes of action and are medium to high risk for resistance development. In an effort to increase the longevity of these products in the marketplace and reduce the risk for resistance, rotation programs that include two or more modes of action, or FRAC groups, are recommended. Alternating or tank mixing single-site fungicides with contact fungicides that have multi-site activity, like mancozeb, also helps prevent or delay the onset of resistance.

Downy mildew pathogens sporulate on the underside of leaf tissue and obtaining adequate coverage with contact fungicides can be challenging. As such, we recommend using products with locally systemic and translaminar (across plant tissue) activity as the foundational fungicides in your rotation program to ensure maximum distribution across susceptible plant tissue.

Stature® SC fungicide (dimethomorph, group 40) and Orvego® fungicide (dimethomorph, group 40 + ametoctradin, group 45) are two oomycete-specific solutions offered by BASF. These products provide translaminar, locally systemic activity and when used preventively, have been shown to significantly reduce sporulation of downy mildew and Phytophthora pathogens. Ametoctradin, the active ingredient in Orvego fungicide, provides a unique mode of action for resistance management. It delivers highly effective inhibition of zoospore (remember those are infectious propagules) formation and release and even at low concentrations, zoospores burst within seconds following exposure. Exceptional plant safety combined with anti-sporulant activity to stop pathogen spread, make Stature SC fungicide or Orvego fungicide clear choices for downy mildew control.

Conditions that favor downy mildew are also conducive to diseases like Botrytis blight and leaf spots. Use Pageant® Intrinsic® brand fungicide and Orkestra® Intrinsic® brand fungicide between sprays for continued control of downy mildew and protection against other diseases that may pop up.

On the road to healthy plants, successful management of downy mildew is possible with attentive scouting, sanitation and preventive fungicide applications. Don’t wait to spray!

Dr. Lookabaugh is a BASF horticulture professional based in Raleigh, North Carolina.

Neve Brothers, best known for growing hydroponic roses, traces its roots back to the late 1950s, when Chris Neve’s grandfather, grandmother and father emigrated to the United States from Italy. When they arrived in San Francisco, they went to work in the greenhouse industry.

“At the time, there were a lot of Italian immigrants working in the greenhouse industry,” Neve says. “That’s where they started. My dad’s grandfather was working in the industry too.”

In the 1960s, Neve says his grandfather moved the family to Petaluma, a city located about an hour north of the Bay Area, and opened a nursery. The business started out producing carnations before transitioning to roses. In 1986, Lou Neve and his brother took over the business from their father and moved it down the road to found Neve Brothers under its current name. In the mid-1990s, Lou bought out his brother and took over the business.

Around that time, and into the 2000s, Lou was joined by the next Neves: Chris and Nick, his two sons. As the children of a greenhouse owner, they practically grew up in the greenhouse. They both worked there in high school and both joined full-time in the late 2000s. Chris took some classes at Santa Rosa Junior College, while Nick attended UC Davis and Sonoma State, but both were always going to come back home.

“We were always involved here from a young age, whether it was my grandmother taking us to farmer’s markets, bringing flowers into the greenhouses or little menial tasks,” Chris says. “This is where we spent our summers and we just grew up around it. It’s definitely part of our way of life. Like any other farming, ranching, greenhouse growing family, it shapes you a certain way.”

The business is also bigger than ever, with 400,000 square feet of growing space at one location and 100,000 at another. Chris and Nick (who is a few years older than Chris) run the business with Lou around every day still. It’s just how the business works best — especially in 2020, when Neve needed to be nimble in order to thrive.

“I’ve been working here realistically all my life,” Chris says. “Now me and my brother are the new generation of Neve Brothers I’d guess you’d say.”

Courting the right customers

According to Chris, a key part of Neve’s success is the type of customers it goes after. For the last several years, he says Neve has moved away from wholesale and shifted to something more akin to growers on the East Coast or in the Midwest by selling to independent garden centers. Chris says the shift is for a simple reason: the price is right.

“It’s hard to produce those items and sell them at those prices and still make it be viable as a California business,” he says. “It’s not that easy.”

According to Chris, prices for wholesale flowers (including, but not limited to, roses) have become lower in recent years as more crops are produced outside of the U.S. and the number of producers in California drops. (He says that there are now seven or eight rose producers in California, and that there used to be around 30.) As that’s happened, prices for roses have dropped to where he cannot make a reasonable profit selling wholesale. A lot of the commercial operations left, he says, focus on producing a high volume of product and maximize profits that way.

“They all just produced the numbers and say “Well, we’re getting 30 cents a stem” or “we’re getting 40 cents a stem” and just kept saying “we need more numbers,” he explains.

Neve instead went the other way and decided to stake out a niche as a higher priced, but higher-end, product. They are able to do that because of the clientele available to the them in and around the Bay Area.

“More and more, we got away from accepting bottom dollar and selling at volume and switched over to higher-end and producing a better quality of product,” Chris says, noting that Neve isn’t the only business to seek out this market. “Maybe the wholesalers aren’t interested in that, but I have the San Francisco flower market here and I have a lot of customers in the Bay Area, so let’s get the flowers into their hands. Why am I taking a discount for selling something I know I can sell direct?”

The customers, Chris says, are a mix of independently owned grocery stores and various high-end events — think weddings, events at wineries, corporate events, etc. — held across Northern California. The former, he says, accounts for about 40% of the company’s business and gets their product in front of the customer willing to pay a premium for plants.

“There’s the Safeway, and then there’s the place down the road that you maybe pay more for, but their stuff is the best,” Chris says. “We have a lot of those here and it’s a niche market in our area that is a cut above. And there’s a lot of other ones just like it. It’s Sonoma Country, it’s Napa County. People are going into a store and they aren’t buying the box of wine. They’re buying the $45, $50 bottle of wine and don’t want to spend $6 on a random thing of mums. They want to spend $15 or $18 and get something really nice.”

The latter, which he says accounts for 60% of the company’s business in a normal year, comes from catering directly to the different events held every weekend year-round. Weddings, for instance, can bring in anywhere from $6,000 to $8,000 in most cases. In a non-COVID year, Neve can directly service as many as 200 weddings in a year on top of other events.

“There’s hundreds of venues up and down the Bay Area and they end up being a really big driver,” he says.

One reason why Chris believes Neve has been able to succeed with moving away from wholesale is because of the brand has cultivated in the Bay Area for years. For instance: they are a staple at the San Francisco Flower Market. Located in the city, the market was founded by Japanese immigrant flower growers in the 1950s and today serves both wholesale customers and the general public. By being a consistent presence at the market, Neve was able to brand itself as a high-quality grower to the end consumer, florists and any potential customer who might happen to come in on a given day. There, potential customers got to see its wide offerings of roses — garden roses, spray roses and more — plus the other flowers Neve grows.

“We’ve had a stall there for what feels like forever. The original Neve Roses was there in the 70s,” Chris explains. “Targeting the customer wasn’t that hard — in some cases, it was like them coming to us.”

COVID concerns and opportunities

Like most businesses, Chris says Neve had a stressful 2020. Ultimately, though, he says it was a successful year even if it wasn’t like any other one he remembers.

“It’s been interesting and good,” he says. “To be 100% honest, this isn’t what we had planned. It ended up working out as a whole year of business.” Even now, months later, Chris says the last order sent out before shutdowns began is March is still pinned a wall in the Neve warehouse, serving as a reminder of what that moment in time was like.

That, Chris says, happened in March right as the pandemic began in earnest in the U.S. At that time, no one at Neve was exactly sure what would happen next.

“If you had asked me on March 17 how this year was going to go, I wouldn’t have known,” he says. “When we hit that point, we figured we’d take a hit because weddings would be held off until June or July, and then maybe it’s August, and then it means that the fall is going to be busy with weddings. And then that gets pushed back. And then none of them happened. If you asked me how we’d do in that case, I’d have had to put another notch in my belt because things are going to get a little snug.”

Fortunately, however, Neve was able to nimbly pivot and change up its business model. With event revenue unavailable, they started filling in open spots that presented themselves. For example: On Mother’s Day, Chris says there was a shortage unlike “anything he’s ever seen” and they sold out their stock fairly easily. From there, they slightly expanded their ordering radius — drivers went farther out than they usually would — and picked up customers at brick-and-mortar flower shops who they might not usually service.

“I think if you were to ask any California grower, they didn’t have too much of a problem moving through a lot of their product because there wasn’t enough volume to fill everyone’s needs,” he says. That, he says, continued through the summer and fall as people sent flowers to family members they were unable to see in person due to COVID-19. That, in turn, allowed Neve to avoid cutting back on stuff in ways they expected to. According to Chris, the company only had to reduce hours for each workers by three per day for a roughly two-week period in the middle of the summer.

“Thankfully — and I’m so happy that I was wrong about our idea of how it would go — it ended up quite the opposite,” he says. “Looking back on it, I can definitely point to a few factors I didn’t realize at the time that would end up working out in our favor.”

The next steps

According to Chris, he’s unsure about what the new status quo will be post-pandemic as society begins to open back up, with weddings and other large events expected to resurface in droves in 2021 and 2022. The expectation internally, he says, is that brick and mortar sales will drop as people begin to visit each other safely.

It helps Neve that it has its history to lean on. Lou, Chris’ father, is still around daily and largely focuses on big picture planning and goal setting for the business. Nick, Chris’ brother, oversees growing operations and makes executive decisions in that department. Chris, meanwhile, handles the day-to-day management in the office, which includes shipping. While all have their own area to oversee, it’s all a collaborative effort with an eye on the bigger picture.

“We all work at it, we all have our different avenues we take care of or spearhead,” Chris says. “I’d say one of the main things is just having the willingness to tackle bigger on-going projects. It’s easy to be complacent at a certain point in time and say that it’s good enough for now. But the moment you have more involved hands with it, it’s easier to tackle more progressive ideas about where the business is going to go. And not just the revenue side of it, but where the business is going as a whole.”

They also know they have to adjust in the right ways. It can be hard to move on from a plant quickly, but Chris says Lou instilled a mindset to not dwell on what hasn’t worked in the past.

“If people don’t like it and sales are slagging, some growers will just find ways to sell it because it’s in already,” Chris says. “My Dad’s philosophy is ‘pull it out, get rid of it, find the replacement right now’ because I’m not sticking with a loser,” he says, noting that he’d rather bite the bullet, pay for new plants, a new section and start with something better.

“That’s the mentality around here, all the time, for us. You figure it out, you think on your feet. There’s no easy ride, especially in this business. If you can’t adapt and find ways to make it work, you’re in trouble. That’s business, that’s life.”