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Greenhouse Grower: Altman Plants/Color Spot Nurseries consolidation at the top

Original story published by Greenhouse Grower

April 29, 2019

Story by Janeen Wright

Co-Presidents Ken Altman (right) and son Matt Altman (left) share a common interest in leading a united Altman Plants’ team into a successful future.

Altman Plants, based in Vista, CA, is 10 weeks into integrating the recently acquired Color Spot Nurseries assets into its operation after acquiring them near the end of December 2018. It’s an undertaking of massive proportions as the two companies, ranked No. 1 and No. 2 on Greenhouse Grower’s list of Top 100 Growers in 2018, work to become one company under the Altman Plants name. What happens when the big get bigger? The way this merger is coming together proves that the big get better, but the real test begins as the newly united companies head into the busy spring season.

“We’ve shared with the team the key goals for the company,” says Co-President Ken Altman. “We want to produce high-quality plants and satisfy our customers. And we want the two companies to feel like one team with an interest in helping one another. Decisions are measured against those goals. To this point, it seems like the team is on the same page. Now it is about executing this spring. There is a lot to do in a very short time.”

New Locations Bring Advantages

Altman Plants gained 11 million square feet of environmentally controlled space and 1,500 acres of outdoor space, spread across Color Spot Nurseries’ facilities in Fallbrook, Salinas, and Lodi, CA, and in Troup and San Antonio, TX, plus three locations in Waco, Walnut Springs, and Fort Davis, TX, that were closed and will remain closed for now. The increased production capacity leaves the company in a good spot to supply the ornamental bedding plants, container perennials, woody ornamentals, potted foliage, and succulents it produces for its customers.

“The facilities are well-positioned geographically,” says Co-President Matt Altman. “We are well located to serve the Southern part of the country, and we have the capacity to do so. When needed, we can share plants between sites to be sure that all customers’ needs are satisfied.”

Altman Plants has two major business units in addition to the Altman Plants organization. One is Plug Connection (No. 63 on the 2019 Top 100 Grower list), which is a young plant company that serves both Altman Plants and other growers. Plug Connection grows plugs, roots liners, and grafted vegetables. They also grow tissue culture plants. The operation just opened a new tissue culture facility with a modern 10,000 square foot lab. The lab is used primarily to do rapid build-up and production of new plants bred by Altman. With the purchase of Color Spot, 20 acres of young plant greenhouses in Lodi are being added to Plug Connection.

The other unit will be known as Lone Star Growers and will focus on production of woody ornamentals and flowering tropicals from its San Antonio, TX, location. There will be little separation between Lone Star Growers and Altman Plants, with a lot of sharing between merchandising and transportation activities. Lone Star has a history of high-quality plant production, and Ken says Altman Plants intends to invest appropriately to earn that reputation going forward.

The first decision made by the company relating to the integration was regarding which computer operating system to use. Management made a decision to stick with the Altman system and cutover from the Color Spot SAP software system. California facilities are successfully converted and Texas facilities will be tackled in June.

Working Together Opens the Way for a Successful Transition

Marriage is hard enough for two people. Marrying two large companies with distinct management styles, different operating systems, and hundreds of staff members would seem like a recipe for a disaster in comparison. But like all strong marriages, unity has been key to the two companies becoming one.

“We’ve placed a strong focus on being one company with the development plan,” Matt says. “The staff on both sides have been receptive and embraced the change, which allows us all to move forward together.”

The management team also played a key role in smoothing the transition. With the acquisition of Color Spot Nurseries, Altman Plants gained around 1,600 employees, and five facilities, creating what would seem a logistics and human resources nightmare.

“We felt confident taking this project on because we have a strong management team,” Ken says. “The team is engaged and collaborative. They’re very capable of making things happen to get the job done.”

Extra hands also means extra minds, which Altman Plants has applied to problem solving, innovation, and process improvement during the integration. The management team has held on-site meetings with growers to look at growing operations to determine what best practices they are using that could be leveraged across the entire company. This has kept the staff engaged and led to some processes implemented for the future. Ken says having new people with a fresh set of eyes analyzing processes, sharing ideas, and brainstorming to solve problems and improve efficiencies is a big advantage.

Matt echoes that sentiment, adding another benefit of a larger staff.

“There will always be challenges such as environmental regulations and labor availability,” he says. “When presented with those challenges, we now have more people to bring to bear on finding solutions. We get further along faster.”

Investment Drives Innovation

Opinions vary in the floriculture industry about whether consolidation on the grower side and the breeder side is healthy for the industry. The Altmans point out that company acquisitions can be beneficial for the industry when done right, saying they keep people employed and allow for best practices to be put to use across a larger enterprise.

“It’s true we have gained more resources to use to help our customers,” Ken says. “But we recognize that there is a place in the market for all sizes of growers. The growers in this industry are friendly. We share information with each other and wish each other well.”

Larger companies also make substantial investments in new and developing automation equipment and other technologies that keep the industry sustainable by supporting other companies, Matt adds. The resulting innovations benefit other growers who want to adopt new technology.

For example, Altman Plants is currently helping a company develop and trial an autonomous vehicle that it will eventually use in its greenhouses. The vehicle is basically a cart that can find its way from the greenhouse to a loading dock and back on its own. This type of technology saves growers time and labor during the shipping season.

“Family-run companies are investing back into their businesses, and everyone benefits from those dollars coming into the industry,” Ken says.

Strong Research Focus Benefits All Growers

Altman Plants’ strong commitment to research and education is one way it shows leadership and gives back to the industry. In 2008, Ken and his wife Deena Altman founded the Center for Applied Horticultural Research, a nonprofit organization that addresses, through research, the practical issues the nursery and floriculture industry face on a regular basis. At the time, Ken felt there was no shortage of issues that needed solving, but the funds to find solutions were limited. He and Deena decided to do something about it. The center supports industry researchers and opens its doors for all types of growers to participate.

True Bloom, a new line of disease-resistant garden roses, is one of the results of Altman Plants’ investment in research and development. This is the True Gratitude rose.

Altman Plants also invests heavily in research and development through its multiple breeding programs. A current introduction is True Bloom roses, a new line of disease-resistant garden roses with a shrub-type habit and hybrid-tea-like blooms. The development of these roses has been a lifetime work for the breeder. Altman Plants will roll this program out soon to its customers on a limited run, with more production in 2020 to supply other growers. Ken says the company is also working on a compact hibiscus and has more breeding projects in the works for the future.

“The rose breeding project has been a large-scale investment for us,” Ken says. “We can invest in these types of projects and continue to invest in things for the long run because of our larger scale and volume. It is a big endeavor and a benefit for the industry and our customers.”

Matt recently spent time in Washington, DC, at the Society of American Florists’ Congressional Action Days, lobbying with other members for the support of the Floriculture and Nursery Research Initiative and the continuation of the USDA Floriculture Crop Survey. He says it was important to fight for maintenance of the initiative because floriculture crops represent 15% of the crops in the country, yet the industry gets less than 1% of the research dollars.

“Our industry is easily forgotten by our legislators, and these initiatives provide visibility and important research dollars to university programs,” Matt says. “However, ultimately it falls on growers to invest in the industry to keep it going strong.”

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GrowerTalks’ Acres Online: Ken Altman on the Color Spot purchase

Original column published by GrowerTalks’ Acres Online

Feb. 8, 2019

Column by Chris Beytes

Ken and Deena Altman

Ken and Deena Altman

Ken Altman on the Color Spot purchase

It’s no secret that when bankrupt Color Spot went up for bid at auction last July, Ken and Matt Altman wanted it.

“We were the other bidder in the auction,” he told me at the time. “We made a very large bid to purchase all the assets, but in the end, the bank decided to credit bid for the company. We are working to see what we can purchase from the bank.”

That last statement, which came to fruition December 21, includes eight former Color Spot locations in California and Texas covering 10.3 million sq. ft. of greenhouse and shadehouse and more than 1,700 acres of field production, making Altman Plants the largest (by area) grower in the country by a comfortable margin.

I covered that news in the January 10 issue of Acres Online, but without being able to speak with Ken directly. In that item, I wrote that I had two main questions for Ken: “Why?” and “How will you not let this sudden massive expansion screw up what you’ve already built?” Finally catching up with Ken as he drove to the airport earlier this week, I was able to ask both those questions and a few more.

After the customary greetings, I thanked Ken for being a good sport about the rather direct, unvarnished way in which I had phrased my second question.

Ken, who knows that’s my style, dismissed my concern with a generous laugh.

“I’ve been asked that question from the time we came out of our backyard,” he said.

But before we got further into that, I asked him question No. 1: Why make the decision to add so many locations and so much retail territory to an already large nursery?

“We like the nursery business, and we like our customers, so this gives us more of all of that,” he replied. But he admitted that it’s a major expansion, even for the formerly second-biggest nursery in America.

“It’s a big jump. But I have to tell you, we’ve been growing very rapidly for a number of years. I think even from the first years, we have always grown in double-digit numbers every year. It’s just that when we first started, we were making $10 a week—double digits wasn’t so big. Now it’s getting bigger.”

I asked Ken if perhaps the acquisition looks bigger and scarier to those of us on the outside than it does to him.

“I think even to us it’s a big deal,” he answered. “But I have to say, we have a really great management group. There are a lot of really experienced people who run fairly good-sized enterprises themselves. And we have younger people who are coming along and are gaining skills. So I think we have a really good roadmap for running this.”

How they’re bringing the new locations aboard

To run the new operation, Ken says they’ve retained the location managers that were with Color Spot. They expanded the territories of their West Coast and Southwest divisional leaders. And he and his son, co-president Matt, are busy filling positions where needed.

“One thing we’ve found is that there are a lot of great people at Color Spot. They seem to be happy and really good about joining us. Morale has been pretty good right now with some of the direction we’ve been providing.”

I asked about the initial reaction of the former Color Spot staff to the new ownership.

“You never know because every company has its own culture, but when we first took over, Matt and I and some of the other managers made a quick circuit through every location and talked to all the employees in group get-togethers—one great thing about that is that Matt is 100% fluent in Spanish, so he was able to communicate bilingually so everybody could understand and participate.

“We had a few main points that we were trying to get across: one is that we are going to be all about quality in our plants and every decision that comes up we are going to make in favor of quality.

“Another thing is that we are going to be totally customer-focused and 100% on making customers satisfied. We’ve always had a position in our company of wanting to say ‘yes’ to our customers. When we get a request from a customer, our first impulse is to say yes, then figure it out. We want to make sure that the bigger company also has that same point of view.

“The final thing we told everybody is that we are going to be one company. The company happens to be Altman Plants, but the idea is that we are going to reach out our hands in welcome to everybody who joins our organization.

“That seemed to resonate with people, the idea that there’s now a family that cares a lot about plants, cares about the nursery business and has a really long-term view of things. They’ve been through equity owners and bank owners; I think all those people did their best job, but we have a different point of view, a longer point of view.”

Also boosting morale? Raises. Ken noted that wages had been stagnant at Color Spot, so they’re boosting the pay of all the production people by a considerable percentage. He didn’t want me to say how much, but it’s generous.

“We think we can pay more by being inventive and efficient, and growing good plants,” he said.

How they won’t screw up what they’ve already built

So back to question No. 2: We watched Hines Horticulture get big, then fail. We watched Color Spot Nursery get big, then fail. How does Altman Plants avoid that same fate?

“First of all, I beg you, don’t put us on the cover of GrowerTalks,” Ken joked. (I had just pointed out to him that both Color Spot and Hines had been featured as cover stories in the past. He’s been there already—the December 2016 issue, so it’s too late.)

Then he got serious.

“We’re going to concentrate on exactly what I told the employees. If we have really good quality plants and we don’t forget where our bread is buttered—which is our customers—and we do everything to make them happy, and if we keep the morale of our company up as one company, that should be good.”

One other note about those other two vs. Altman: They were bank- or private-equity owned. Altman is still 100% family owned.

The former Spot facilities they’ll be running

After visiting and evaluating all the Color Spot assets they acquired, Ken and Matt have put together the following list of facilities they’ll be running, along with the size of the operation:

California:
Fallbrook – 192 acres, 1.2 million sq. ft. of greenhouse
Salinas – Added 240 acres and 3.3 million sq. ft. of greenhouse
Lodi – 39 acres and 700,000 sq. ft. of greenhouse

Texas:
Troup – 334 acres, 3 million sq. ft. of greenhouse
San Antonio – 580 acres, 2.1 million sq. ft. of greenhouse

Ken says they have three more Texas facilities—Waco, Fort Davis and Walnut Springs—but they’re “mothballed” and will stay closed at this time.

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Greenhouse Grower: Altman Plants Acquires Color Spot Nurseries

 

Original article published by Greenhouse Grower

Jan. 3, 2019

Story by Laura Drotleff

Ken and Deena Altman

Ken and Deena Altman

The sun set on 2018 with one of the biggest deals in floriculture industry history. Altman Plants, based in Vista, CA, closed a deal on Dec. 21 to purchase the remaining assets of Color Spot Nurseries from Wells Fargo. Joining Altman Plants’ additions in 2018 of a 20-acre facility in Salinas, CA, and 30-acres of new greenhouses at its Lake Mathews, CA, location, the acquisition of Color Spot’s remaining assets almost doubles the size of Altman Plants, to put the operation in the No.1 spot on Greenhouse Grower’s Top 100 Growers list.

Before Color Spot filed Chapter 11 bankruptcy and restructured, the company was listed with 21 million square feet of environmentally controlled space, 2,603 acres of outdoor space, and 206 acres of shade houses, and as of May 2018 was the largest grower in the country, according to Greenhouse Grower‘s 2018 Top 100 Growers Survey. Color Spot held that No. 1 position since the mid-90s. In 2018, Altman Plants was the second largest growing operation in the U.S.

After divesting ownership of Hines Nurseries in August and being acquired temporarily by Wells Fargo, Color Spot Nurseries was still one of the largest growers and distributors of live plants in the country, delivering bedding plants, perennials, annuals, flowering tropicals, ornamental shrubs, poinsettias, and other holiday plants to large and small retailers and wholesalers in the Western, Southwestern, and Gulf regions of the U.S. Founded in 1983, Color Spot employed 1,600 employees who fulfilled the needs of hundreds of retail and commercial customers in 26 states.

Color Spot’s five remaining production facilities in California and Texas, comprising an estimated 11 million square feet of environmentally controlled space and 1,500 acres of outdoor space, now folds into Altman Plants, which even before this acquisition owned more than 2,100 acres in several states.  Altman Plants’ full scope of production includes ornamental bedding plants, container perennials, woody ornamentals, and potted foliage, as well as close to 700 acres of succulent and stock production.

Altman Plants Will Expand Retail Footprint

While all of the details are still being worked out, including exactly how large this acquisition makes Altman Plants, we caught up with Ken Altman, CEO and Co-President of Altman Plants to find out about some of the particulars that he could discuss. He confirmed that Altman Plants will absorb the Color Spot Nurseries facilities in Fallbrook, Salinas, and Lodi, CA, and in Troup and San Antonio, TX, as well as three locations in Waco, Walnut Springs, and Fort Davis, TX, that were previously closed and will remain closed for now. All of the facilities will be renamed Altman Plants, except for the San Antonio woody ornamentals operation, which will be “tightly interwoven” with Altman Plants, but operated under its former name, Lone Star Growers.

Altman Plants’ production

All of the facilities will continue growing the same crops they were producing before, serving most of the same customers with plant products and merchandising services. Most of the customers Color Spot was servicing were also already Altman Plants customers, including home improvement stores, warehouse chains, grocery stores, and independent garden centers, so the sale allows the company to expand its service to those customers.

Altman Plants leadership is now busy with integrating the two companies, including hiring on nearly all of the Color Spot Nurseries employees and joining the two companies into one blended culture. The top management group from Color Spot will not stay on, as those positions are already filled; however, the remaining 1,600 employees will be welcomed to Altman Plants, adding to the company’s current 3,000 employees.

Other integration priorities include deciding which operating system to use. Color Spot was using SAP while Altman Plants uses a homegrown system called Evolution. There will also be ample opportunities to refresh the Color Spot facilities with automation and new processes over time, Altman says.

In addition to Altman Plants’ significant growth in 2018, the Altman family invested heavily in the young plants business in late 2016 and early 2017 with its acquisition of both The Plug Connection and EuroAmerican Propagators, which were integrated together as The Plug Connection. Altman says in addition to serving Altman Plants’ young plants needs, The Plug Connection is rapidly attaining a wide variety of new young plants customers to provide them with plugs, liners, grafted vegetables, and tissue culture liners.

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