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Entrepreneurs
Business Observer Friday, Mar. 29, 2013 5 years ago

Flower Power

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A.P. Hollingsworth initially sought to grow a barbecue-sauce business. But he instead combined a passion for orchids with a fearless entrepreneurial spirit to build a longstanding flower company.
by: Mark Gordon Managing Editor

One of the largest family-owned orchid businesses in the country, based in Florida, started with a curious young boy, a Model T Ford and a yellowish-green flower.

It also includes an eight-point buck deer and a wild bearded turkey. That was the haul from a hunting outing in the Everglades one day in 1927.

The deer, the turkey and the flower, a needle-sharp orchid from a fallen cypress tree, were in the back seat of Albert “A.B.” Hollingsworth's Ford. But it was the orchid, over the prey, that magnetized Hollingsworth's young son, A.P. Hollingsworth.

So much so that nearly 30 years later, in 1956, A.P. Hollingsworth launched a flower bulb and orchid business out of the one-car garage behind his family's DeSoto County home. Hollingsworth and his wife, Mildred Hollingsworth, would assemble the plants in the garage, load up the products in the family station wagon and drive 90 miles to Tampa to sell the wares.

That business, Sun Bulb Co., is now a national leader in orchids and orchid supply, a nearly $200 million niche segment of the flower industry that caters to hobbyists and horticultural fanatics. The firm's products, under the Better-Gro brand, are sold in more than 4,000 Home Depots and Lowe's stores, in addition to dozens of independent garden retailers in the U.S. and the Caribbean. Products include packaged orchids that retail from $20 to $40, blooming orchids, orchid fertilizers, potting mixes, baskets and accessories.

The company, now 57 years old, is still run out of DeSoto County in a facility in Arcadia — a city of 7,600 people 46 miles east of Sarasota and 48 miles north of Fort Myers. There's an office there, in addition to more than 20,000 square feet of warehouse and assembly space.

A.P. Hollingsworth's grandson Rod Hollingsworth, who joined the firm in 2006 and is now the general manager, declines to disclose specific annual revenues for the multimillion-dollar firm. He says sales have grown, on average, 10% a year every year since 2006. Sun Bulb and two connected entities, Better-Gro LLC and CitriSun LLC, have about 150 employees.

CitriSun is a commercial citrus production facility next to Sun Bulb. But orchids, through Sun Bulb and Better-Gro, is where the company continues to make its mark. Says Rod Hollingsworth: “We pride ourselves on being the premier provider of orchids.”

That mission has won the company both customers and fans in the tight-knit orchid industry, says Ron McHatton, chief operating officer of the Coral Gables-based American Orchid Society. McHatton says the nationwide wholesale market for orchids is on a tier, and the two clear annual sales volume leaders are Homestead-based Kerry's Nursery and Matsui Nursery in California. Those privately owned firms don't release annual sales figures.

McHatton says Sun Bulb would likely be in the top end of the second-tier of companies in annual sales volume, and one of the biggest in Florida. A Ph.D. in chemistry who has been studying orchids since the 1960s, McHatton adds that Sun Bulb and the Hollingsworth family are well respected in the industry for the ability to blend two worlds.

“They are mass merchandise suppliers, but they are also orchid lovers,” says McHatton. “That combination is special. They won't sell what they don't grow and they won't grow what they can't sell.”

'Packaging innovator'
That approach is timely, too, because the orchid industry has exploded in the last 15 years. Total nationwide sales, for one, have grown from less than 8 million potted orchids in 1996 to more than 25 million in 2011, according to the United States Department of Agriculture.

The value of potted orchids in the 15 most flower-prominent states totaled $191.3 million in 2011, according to the USDA annual floriculture crops summary. That's up 11.1% from $172.1 million in 2010, the summary shows. Florida accounts for 18% of the country's market share, the USDA reports, second behind California, which is at 38%. Hawaii is third in the country.

One final piece of proof of the orchid's rise: In 2010 it overtook the poinsettia in sales volume for the first time ever, according to the USDA, a trend that carried through in 2011.

A.P. Hollingsworth, though, didn't live to see the orchid industry surge. He died in 1996, of cancer and other illnesses, at 78 years old. Mildred Hollingsworth died at 77 years old the same year.

Two of the couple's three sons, Tom Hollingsworth and Rodney Hollingsworth, have run the business since the 1980s, when the elder Hollingsworths went into semi-retirement. Tom Hollingsworth, 62, is a vice president, while Rodney Hollingsworth, 64, is the president. Rod Hollingsworth, 39, is Rodney Hollingsworth's son.

All three Hollingsworths are active in the day-to-day operations of the firm. But the daring spirit of the company founder remains the defining characteristic of Sun Bulb. A.P. Hollingsworth's best attribute, say his sons, was his boldness in new products, designs and markets.

For example, A.P. Hollingsworth put a picture of what a flower would grow to look like on a potted plant in the early 1960s — long before that technique took off nationally. Clients back then included Sears & Roebuck.

Hollingsworth also grew his orchid business out of his first entrepreneurial venture, barbecue sauce, through a novel marketing idea: He offered customers who bought the barbecue sauce a free orchid if they sent in a label from the bottle. Another label, plus 25 cents, got someone a second orchid. Says Tom Hollingsworth: “He was an innovator with the packaging.”

Nonetheless, some decisions that became lessons learned stick out, too. Like the time A.P. Hollingsworth bought a trailer load of materials, discarded tire rubber, basically, that the company was going to use to protect the pots with the orchids from insects. But the product didn't work well, and sales, after five years, didn't take off.

“He didn't back away from the tough things, and he didn't back away from a failure,” says Tom Hollingsworth. “If he did, we wouldn't be as successful as we are today.”

'Cost creep'
A.P. Hollingsworth got out of the barbecue sauce business in 1972 after a kitchen fire destroyed most of the inventory. He sold the patents for the recipes, and decided to focus on orchids. That company grew exponentially in the 1980s and 1990s, both in sales and locations for selling products.

Sun Bulb faced a major obstacle in August 2004, when Hurricane Charley ripped through DeSoto County and wrecked the firm's greenhouses. Many of the orchids withstood the storm, only to die in the sweltering heat with no shade for protection. The losses, say the Hollingsworths, were well into the millions of dollars.

Rod Hollingsworth says there were serious thoughts to not rebuild, given the costs. But the firm, partially on pleas from longtime managers and employees, ultimately decided to rebuild, and the new facility has 40% more growing capacity. The company now has two locations in Arcadia, in addition to a shipping warehouse for non-plant products outside Oakland, Calif., and a third growing facility in Apopka, near Orlando.

The growth, in locations and sales, means expenses have increased over the past five years, says Rod Hollingsworth. So in an effort to combat what he calls “cost creep,” the company recently installed lean manufacturing systems, which are based on the Toyota assembly line process, at the Arcadia grow facility. The idea is to retain value by doing less work, all in a streamlined, orderly, everything-has-its-place fashion.

“We need to be consistently more efficient in what we do,” says Hollingsworth. “We have to find ways to cut costs.”

Another challenge the company works at daily, says Tom Hollingsworth, plagues many companies in a commodities business: creating something new to keep customers coming back.

At the same time, however, the company works diligently on another challenge, to dispel the myth that orchids are hard to grow. A.P. Hollingsworth even wrote a book on that topic in 1988, named “Growing Orchids is Fun.” The book has sold more than 400,000 copies in 29 editions.

Yet the perception persists. “It's a fallacy that orchids are hard to grow,” says Rod Hollingsworth. “It's the opposite. They are hard to kill.”

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