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Profiles

Westerlay Orchids

By Angela Rose | Nov 30, 2021

Consumer & Lifestyle Supply Chain California

Company Details

Location

Carpinteria, California

Founded

1978

Ownership Type

Private

Employees

135

Products

Orchids and bromeliads

With thoughtful investments in technology, President Toine Overgaag is improving sustainability while nurturing impressive growth.

Founded by his father as Westerlay Roses in 1978, the second-generation family business became Westerlay Orchids in 2001 when Overgaag rejoined the company after several years away at graduate school and working in Los Angeles.

"When I was younger, the business was pretty small," Overgaag says. "It wasn't as interesting to me. But when I was about 30, I lost my job in the Y2K bust, and I saw a really great opportunity to help change the business dramatically. That's what brought me back."

Growing international competition in the rose market had led the Overgaag family to pivot to orchid production, a transition that required a five-year learning curve. "Those first years we were kind of muddling through, trying to figure out how to do it," Overgaag continues. "But we've been on a really strong growth path since then."

Strong is putting it mildly. Over the past 20 years, Westerlay Orchids has grown to occupy 18 acres of climate-controlled greenhouse space and produces millions of plants each year. This year, the company has produced and sold 3.7 million orchids. They plan to produce more than 4 million orchids next year as they continue to expand.

Over 90 percent of the plants produced are sold wholesale to supermarkets in the western third of the country. The remaining 10 percent are sold to independent retailers, florists, and to the general public through Westerlay Orchids' own retail shop.

"By 2026, we're looking to double the size of our business," Overgaag says. "That includes launching a program of bromeliads early next year. There are a couple of large bromeliad growers in the country already, but we feel like we have an opportunity to introduce a lot of varieties that aren't in the market right now. It's something we're very excited about."

Though orchids and bromeliads are two different families of flowering plants, they have similar requirements for propagation and growth. Many varieties of bromeliads grow in tropical forests, much like the Phalaenopsis orchids (also known as moth orchids) that are currently Westerlay Orchids' principal product.

"Phalaenopsis orchids are native to Southeast Asia," Overgaag says. "Places like Southern China, the Philippines, Taiwan, and Vietnam are where they are found in nature. They grow in the mid to upper canopy in a climate that is generally in the low 80s with filtered or shaded light. We have to recreate that in our greenhouses and be able to keep those temperatures. We also have to adjust the light level, so the plants get as much light as they need and never more. In nature, these plants are watered by rainwater with a little bit of runoff of other plant matter that creates the fertilizer. Recreating this takes quite a bit of technology."

Westerlay Orchids employs Priva climate computers to maintain a steady climate and encourage healthier plants. Waste exhaust from boilers is captured and injected into the greenhouses as CO2, which increases photosynthesis by up to 15 percent and spurs plant growth. Netafim high efficiency sprinklers and drip irrigation reduce water usage. And automation equipment from makers including Boseman Van Zaal, Javo, and System USA maximize productivity.

Challenges: Overgaag identifies supply chain delays as one of Westerlay Orchids' biggest challenges. "We are very tied into the international supply chain," he explains. "Europe is a major source for us for plants and the plastic pots we grow them in. The decorative ceramic pots we sell the plants in come from Asia. The timelines that are now involved are certainly a really big area of concern for us."

Photos courtesy Westerlay Orchids

Rising costs are also an issue, though "we have been able to work with our major customers to get some price increases to help offset at least some of them," Overgaag notes.

Opportunities: Overgaag says the company's business model has a "structural advantage on competitors." He notes that "we are in a great position to continue growing with healthy margins." Additionally, investments in technology are enabling Westerlay Orchids to produce its plants more sustainably.

"Sustainability is something that we've put a lot of focus on," Overgaag says. "We want to do a lot by 2026 and have made major steps towards that goal already. This year we installed almost half a million dollars' worth of solar panels at one of our larger facilities. We're also installing a lot of heat retention curtains. A couple years ago, we made a major investment in water recycling technology. So, we're constantly looking for ways to reduce our carbon footprint with concrete investments."

Needs: Additional greenhouses. Unfortunately, Overgaag says they've found it nigh impossible to cut through the red tape required to build them. "We actually bought some land a couple of years ago that we're looking to develop," he continues. "But there's no guarantee we'll be able to actually get the permits we need or to get them without making major compromises that will cause the project to no longer be profitable. I've spoken with colleagues in other parts of the country whose local governments assist them. That's not something we have here, and it really hampers our ability to grow."

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