Original Article Published by Greenhouse Grower
By: Laura Drotleff | January 28, 2014
A grower shutting its doors, laying off workers and declaring bankruptcy is never a good thing. But when Colorado-based Color Star Growers filed Chapter 11 bankruptcy on December 15, 2013, and sold off six locations, there was a silver lining: new businesses were born.
Color Star Growers, ranked No. 9 on Greenhouse Grower‘s 2013 Top 100 list, was owned by the Verbeek family and at its peak reached 5 million square feet of greenhouse space. A producer of annuals, perennials, herbs, veggies and seasonal blooming potted plants, it served Walmart, Lowe’s, Kmart and local grocery stores through its many locations.
According to the Eastern District of Texas Claims Register, Color Star Growers owed money to more than 30 creditors when the operation claimed bankruptcy. Greenhouse Grower called each location to confirm its sale. Color Spot Nurseries purchased the Sanger, Texas, location. Altman Plants bought the Peyton, Colo., Harrisonville, Mo., and Giddings, Texas, locations. An investment company called Raindrop Partners bought the two operations in Fort Lupton, Colo.
Introducing Bela Flora Nurseries
Ken Altman, who co-owns Altman Plants with Deena Altman, says he has leased the Harrisonville, Mo., location to Steve Bateski, who also owns two greenhouse operations in Jasper and Carthage, Mo., and has combined the three locations to start a new greenhouse business called Bela Flor Nurseries.
The operation will produce bedding plants and other ornamentals, and has secured business with Walmart in Kansas and western Missouri. Brian Aguiar, the former CFO of Color Star Growers, has been named CEO of Bela Flor Nurseries.
Previously, Bateski had been leasing his Jasper and Carthage facilities to Color Star, but when the operation went bankrupt, he had to either lease to another operation or create a new operation, Aguiar says. Bateski chose to lease the Harrisonville facility from Altman to create Bela Flor Nurseries. The three locations together amount to 1,089,000 square feet, according to Aguiar.
“It’s good to be partnered with Walmart through its TAP program, which gives Bela Flor the opportunity to show that even though we are a new operation, we take this business very seriously and we will allocate the necessary resources to serve it,” Aguiar says.
The TAP program was new to Walmart last year and gives color growers the opportunity to merchandise stores, create table designs and keep plants and displays looking their best at retail, Aguiar says. While Lowe’s and Home Depot have had their own merchandising programs through growers over the years, the new TAP program should give Walmart more presence in the market.
“It’s a chance for Walmart to see how merchandising will work in its stores, and it will give Walmart more day-to-day insight, as well as higher margins and less shrink,” he says.
In addition to Aguiar, Herb Verbeek, one of the founders of Color Star Growers, will stay on at Bela Flor Nurseries as head grower, and several Color Star team members are in place, as well, Aguiar says. Altman says Kenny and Beth Verbeek will also manage the Giddings, Texas, facility for Altman Plants.
Altman Plants Grows Its Business
As for the Peyton, Colo. location, Altman says he plans to venture into the hydroponic tomatoes business there, a first for his operation. He says he thinks some of Color Star’s business growing for big box retailers will come back around to Altman, as well. The purchase of the three facilities from Color Star, and subsequent leasing of the Harrisonville, Mo., operation to Bela Flor, adds about 50 acres to Altman Plants’ growing space. That puts the Top 100 operation at more than 9.5 million square feet.
“The Verbeeks are great producers and business operators,” Altman says. “All of the facilities are really clean, well built and were well-run. This purchase provides a lot of opportunities for Altman Plants. We are excited, we’re making plans, we have good people staying on and we’re happy to have their help. Over time, we hope to build these into nice businesses.”
Expanding Circle Fresh Farms
Among other investments, Raindrop Partners LLC owns Circle Fresh Farms, a Colorado-based greenhouse vegetable operation focused on providing locally grown, fresh produce year-round to Colorado’s metropolitan areas, including Denver, Boulder and Colorado Springs. With high demand for its products in its existing facilities, the operation is growing and wants to expand to new markets. Buying Color Star’s two Fort Lupton locations is just the start of its expanding horizons, says Zach Frisch, who heads up business development for Raindrop Partners.
“By purchasing 33 acres of greenhouse space, Circle Fresh Farms is taking a quantum leap forward,” Frisch says. “For years, our business has had a supply problem, not a demand problem. We can’t keep up with the insatiable demand for our products. So we are thrilled to be able to grow our business 10 times larger to fulfill the demand that’s already present in our local markets.”
Frisch says the group is looking to expand Circle Fresh Farms to the Chicago, Washington, D.C., and Austin, Texas markets. But it won’t grow food in Colorado to ship to these cities – the business is built on providing local, fresh-picked food the same day to its customers, he says.
In addition to having its own facilities in northern and now southern Colorado, the Circle Fresh Farms brand network also provides sales, marketing and distribution for other produce growers. Its brand commands a higher price point at stores like Whole Foods, which allows growers to make better margins while affording them the ability to do what they love – grow produce – without the marketing aspect, Frisch says.
Additionally, Frisch says Circle Fresh Farms takes traceability seriously, not only in case of a food safety recall but also to improve growers’ transparency to consumers – an aspect of food marketing that is in higher demand today than ever before.
“We have implemented tracking and tracing technology in our systems that allows us to trace our produce directly to the grower and greenhouse where it was grown,” Frisch says. “This is necessary in the event of any type of food recall, but it also provides the information that consumers want. Consumers are placing more value in their food and they want to know where their food was grown and about the grower who produced it. We feel that Circle Fresh is a pioneer in providing this information to consumers.”