While it is often said history is an excellent teacher, can the history of established markets help protect cultivators’ businesses in emerging markets? As cultivators enter the marketplace, insights from established markets suggest a systemized approach to cultivation can benefit those in emerging locations.
Similar to products in all other free markets, cultivators’ economics are heavily influenced by the balance of available supply and the market’s demand. As horticultural offerings deemed desirable by a market segment become available, early demand typically has been met by relatively limited supply, driving up market prices. Of course, a natural response to rising prices is the entry of new producers, causing prices to decline as market supply increases. This economic pattern recently has been seen in new markets where an increase in competition was followed by a drop in flower prices.
While growers cannot control external market forces, they can make an effort to reduce operational costs. Minimizing unnecessary expenses is critical to surviving the “Valley of Death”—the period during which a new business’s capital resources can deplete more quickly than revenue flows in. Any decline in market prices—such as a drop in flower prices—can exacerbate challenges during the Valley of Death stage. Identifying opportunities to lower the cost structure at times when prices dip is essential to mitigating revenue declines and potentially protecting a business’s survival.
Reducing costs can seem more difficult at a time when the marketplace is brimming with novel technologies and sophisticated solutions ranging from lighting to housing to advanced nutrient solutions. But to make it through the Valley of Death, it pays to consult history and apply wisdom from one of history’s great minds. Quoting Albert Einstein, “Everything should be made as simple as possible, but not simpler.” Few strategies are simpler than adopting a system-based approach. Systemizing establishes a repeatable process that can help cultivators avoid unnecessary costs while achieving consistent, replicable results harvest after harvest.
At the outset of cultivators’ establishment, getting the basics right and sticking to them is imperative. Deviating from processes in an effort to improve results can be tempting. Stroll through any industry trade show and you’ll see myriad innovations claiming to boost the end product or enhance production practices. However, before investing in advanced solutions, growers should achieve operational consistency and repeatable results. Systemizing operations and documenting each step of the process provides a blueprint for future harvests.
A system-based approach to cultivating considers how the most fundamental inputs work together as a whole to support the grow from start to harvest. Fundamental elements of a system include nutrients, fertigation strategy, growing media, and how these inputs are integrated to work together.
While the inputs work as a system, they should be adjusted individually to highlight the influence of each change one at a time. Switching out all the inputs at the same time will make evaluating the benefits or consequences of any particular change more difficult. Any adaptation also requires time for evaluation. Introducing additional variables or adaptations to the process should begin only after the cultivator has achieved sustained and consistent results. Pick a strategy and stick with it until you’ve established a good production cadence.
Consistency also applies to the procedures employees follow in the grow house. Adding new locations increases the risk of “process creep,” which can lead to inconsistencies. Establishing and documenting a blueprint for operational processes and communicating these practices to all team members can help ensure procedures are consistent across multiple locations.
Ask a group of master growers about any aspect of growing, and you’ll get a multitude of opinions. In contrast, automating systems and relying on data brings a calculated and objective approach to cultivation. Data from automated systems can be used to steer processes such as fertilization and irrigation. From a control perspective, automating systems ensures water and nutrients are delivered precisely at the proper time and in the right amounts.
Achieving consistency is essential to building customers’ trust and, ultimately, their brand loyalty. The more this can be measured, the greater the confidence that flower quality will be consistent. Technology has a role to play in ensuring consistency. For example, placing substrate sensors in the growing medium can provide data about moisture content and generate information about optimal times to water. Automating the fertigation process can help support sustainability efforts, reduce waste, and nurture plant quality by precisely tailoring water and fertilizer to the needs of the grow.
The beauty of a streamlined production system is it leverages the essential components that work together to produce a grow. Consistently delivering the basic fertilizers, growing media, and nutrients sets the stage for repeatable harvests, while any add-on to the system—such as liquid fertilizers with bonus nutrients—represents an added cost. In most cases, simple salt-based fertilizers will ensure plants receive necessary nutrients.
As ground zero for the grow, growing media are responsible for delivering water, air, and nutrients. The choice of growing media also can help defend against biosecurity risks by keeping pathogens and pests from entering the cultivation facility. Choosing inorganic, sterile, and inert growing media can support consistency. Mineral wool, for example, is an inert medium that cannot support the proliferation of organisms until water is added, keeping it clean and pristine.
Beyond the inert system components, human and access-to-material factors must be considered. In a tight labor market, it’s important to take into account the ease of handling inputs. Selecting growing materials that are lightweight and easy for workers to handle reduces the physical burden employees face. Similarly, selecting a material made in North America can simplify supply-chain issues, helping to ensure access to needed system components.
While it’s impossible to predict the future, some best practices from established markets suggest a systemized approach based on reducing operational costs and supporting consistency can help new cultivators in emerging markets.
Tom Blaine is business development leader for horticulture at Owens Corning, where he draws on two decades of experience in process production and manufacturing. His experience includes managing manufacturing strategies for production operations in Oregon and Michigan. After receiving a bachelor’s degree in chemical engineering, Blaine earned an MBA from the University of Michigan. In his free time, he’s an avid hockey fan.