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EVERYTHING'S COMING UP ORCHIDS
Andy Matsui Took A Chance A Couple of Years Ago, now He's No. 1 in the World
By Larry Parsons, The Salinas Californian
Monday, March 1, 2004
Salinas-are flower grower Andy Matsui - after a calculated, four-year retrenchment - made his nursery bloom into the world's largest producer of potted orchids.
In 1994, Matsui saw the need to come up with something new, as imported blooms kept eroding cut-flower markets for U.S. growers of roses, carnations and chrysanthemums.
Matsui, who started growing flowers in his Old Stage Road nursery in 1970, traveled the world, talking with growers from Holland to Thailand, gleaning information about growing orchids.
Today, Matsui's greenhouses are filled with 10 million potted orchids dazzling concentration of varieties, colors and fragrances in 2.5 million square feet of growing space.
Matsui sells about 4 million potted orchids a year throughout the United States. He estimates half the potted orchids sold in California and a quarter of those sold in the U.S. come from his greenhouses. Annual sales now run about $20 million, but Matsui figures his company's sales could reach $35 million.
"The market is big," Matsui said last week, as trays of orchids bound for Trader Joe's stores sat on a nearby conveyer belt. The 240-store chain with gourmet foods and beverage is Matsui's biggest cucstomer buying $8 million of his orchids a year.
"The 21st Century is orchid century," said Matsui, who now travels to Japan, Taiwan and other countries to share his story. "I'm expecting a 200 million-plant worldwide market.
By 2002, Matsui grew his last roses and completed a four-year conversion to orchids. He had put $18 million into the conversion, which required extensive greenhouse remodeling. It would probably cost $40 million to produce from scratch an orchid-growing operation, Matsui said.
"I don't know if anyone has the guts and the money," he said, with a slight grin at the risks he took that are now paying off.
Matsui long has been an innovator. He diversified in the 1980s and 1990s, pioneering the market for dried eucalyptus fronds and other decorative flower products.
Before setting on making the big move into orchids, Matsui considered a couple of other plants, but he won't say which ones. He kept his orchid plan close to his vest, too.
"I didn't tell anybody. I know people would say I was crazy," he said. "They still say I'm crazy, but we are making money.
Several factors made potted orchids an ideal product for Matsui.
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Current U.S. trade laws prohibit the importation of potted orchids. Even if those restrictions are lifted, Matsui said shipping costs would deter foreign orchid growers from tapping the U.S. market.
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Contrary to the notion that orchids require tropical conditions to grow, the flowers do extremely well in the temperate Salinas Valley. Even the most heat-sensitive varieties grow best at 80 degrees.
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Unlike roses, lilies and other flowers that sell extremely well around seasonal holidays such as Valentine's Day, potted orchids which are a two-year growing crop move well throughout the year.
"There's only a 30 percent difference between our biggest month and our lowest month," Matsui said.
Uncertain himself about all the varieties of orchids in his greenhouse, Matsui said some are sold to orchid fanciers and hobbyist growers. But big-box chain stores are his major customers.
"We are always sold out. We never have enough to meet the demand," he said.
Matsui sells the orchids for $5 to $25 a piece, and retailers typically add a 50 percent markup. Keeping prices reasonable is key to building the market, he said.
Potted-orchid buyers get flowers that last far longer than cut flowers, which typically fade after a few days. Orchid's shelf life can reach from three weeks to four months, depending on variety, Matsui said.
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