Cashing in on culinary herbs

Reprinted with permission from ACP Media. (NZ Lifestyle Block , Feb 2007)

An intensive niche business is helping to turn just a few acres into a creditable cash flow.

Abandoning plans for a country restaurant set former chef Tom Wellington on another culinary adventure, growing herbs for home gardeners.

After buying two and a half acres in Coatesville with plans for the restaurant, he was put off by the uncertainties of the post-sharemarket crash environment and decided to look for an existing business to buy instead. The herb growing company, Living Herbs, then based on Auckland’s North Shore, caught his attention as a small enterprise that combined his interest in gardening and his chef’s respect for the role of culinary herbs, with a respectable turnover of around $200,000 a year.

Tom eventually moved the business to the garage of his Coatesville home but soon found it outgrew the setting, so bought a larger 11 acre block nearby, using around four acres to continue to develop the company’s potential.

Today, 17 years after he bought the business, it boasts an annual turnover of more than a million dollars and is the largest grower of its type in New Zealand, supplying herbs to 150 customers encompassing around 90 percent of the North Island’s major garden centres including Kings, Bunnings and Mitre 10.

Tom says associations with these large customers and being willing to freight further afield have been major growth factors. Winning major contracts is a combination of being in the right place at the right time and being able to offer proven performance and quality, he says. Big customers also prefer to work with one point of contact that can supply their entire chain, rather than take a piecemeal approach through local stores. Living Herbs focuses strictly on wholesale growing of mainstream culinary varieties that match market demand.

“We’ve had to reduce the range we do because the lovely medicinal ones don’t sell as well. We still do a token amount of those, but the bread and butter ones that the customers want are the culinary ones, so that’s what we concentrate on,” says Tom.

The bulk of sales are in a standard 10cm pot, although recently a couple of other larger variations have been introduced to target the discretionary dollar of those with less time and space for gardening. Though still a small part of the business, it’s definitely a growth area, says Tom.

“Demand goes through peaks and troughs but has been pretty strong for virtually the whole time I’ve been in it. We went through some very big years of growth early in the piece and we still get continuing growth whereas some areas of the horticulture industry have faced big declines,”

Like most horticultural businesses, the work is strongly influenced by the seasons, although it operates year round to ensure customers have herbs to sell.

“What we sell in July would be a fraction of what we sell in October/November and the range is much smaller over winter.”

Plants also take longer to grow in the cold weather making planning supply a challenge. From sowing seed to sale, the fastest growing item would take about four weeks and the slowest growing (at the worst time of the year) would take 25 weeks. However, the bulk of herbs fall in the eight to 12 week bracket.

Reference to historical trends and careful monitoring of growing times are all that can be done to aid planning, although efforts to establish a computer programme that can help manage the inventory are currently underway.

While some of Living Herbs’ bigger and older customers operate on a sale or return basis, the bulk of their 150 customers are faxed a weekly availability list from which to place their orders.

Seeds for growth

Approximately 70 percent of the herbs are produced from seed and the remainder are grown from cuttings and root division. A number of mother plants are kept inside and out for cuttings, while seeds are sourced from established supplier Kings Seeds.

Cuttings are best suited to the firmer herbs like rosemary, sage, lemon balm, tarragon and thyme (except for Thymus vulgaris which won’t grow true). Plant tips are put into trays of pumice and onto a heat bed with a regular misting of water to strike. Root division is used for herbs like comfrey, horse radish and tarragon.

Growing is done about 60 percent indoor and 40 percent outside. Buildings include a potting shed, propagation area and plastic house set aside for propagation, as well as three other plastic houses. A sheltered outdoor area is available for hardening off plants.

“Most things will spend a short period inside to get started then where possible we like to harden things off outside. We get pretty severe cold in winter, with temperatures as low as minus five and some bad frosts, so at that time of year have to be pretty careful what we put out,” Tom says.

Soil is bought in bulk, pre-mixed to Living Herbs’ requirements which include peat, bark, pumice and nutrients, and kept covered to maintain moisture levels and keep out contaminants. Pots all mostly made locally, though some of the new larger size are imported from Germany. Locally printed pot labels identify the plant and suitable New Zealand growing conditions. Staffing levels fluctuate between 12 and 20 depending on the time of year.

Once established, plants in plastic houses are generally watered from pipes underneath them soaking a felt pad which allows them to draw up moisture through capillary action, rather than overhead watering which can create added humidity and increased risk of fungal disease. Other climate control measures include aluminium shade netting to reflect heat as necessary, as some herbs, such as basil, are particularly prone to sunburn.

However, the biggest health problems with herbs are fungal and root diseases like phytophora which are always in the soil and water and can be triggered by high humidity. Susceptibility varies, however, herbs like comfrey and dill, are most vulnerable. Where necessary to control the problem, plants are drenched with an appropriate fungicide at each transplanting stage – when seeds are sown and again when seedlings are pricked out and potted up.

“The plants then sit here for three to six weeks and aren’t done again, so by the time the herbs go out to garden centres there are no residuals to worry about as the withholding period is generally only 10-12 days,” says Tom.

Insecticides are applied on a similar “as required” basis which means use is minimal. An organic soap spray is used to combat the main problem of whitefly, while aphid and mealy bug issues are kept at a minimum thanks to good shed hygiene and the regular turnover of plants.

Marketing magic

Product branding is achieved through labels and delivery trucks, as well as some garden centre signage, although many big companies don’t use a lot in store, preferring to promote their own brand. To increase promotion, Tom asked his wife Barbie to handle marketing through customer newsletters and more contact with individual stores. Extra promotional information has been developed by way of brightly coloured pot stakes to draw public attention.

“You’re not dealing with something that flowers so we’ve got fairly bright coloured pots and labels to attract the eye,” he says.

Tom feels the introduction of live supermarket herbs by another supplier about 10 years ago was a missed opportunity for his company to expand further and gain access to year round foot traffic, as opposed to the more seasonal flow at garden centres. However, it hasn’t impacted on Living Herbs’ sales as the supermarket herbs are grown hydroponically, aren’t designed to be grown outside and in Tom’s view, don’t provide the same flavour as soil-grown herbs.

In the past he has tried to expand into other horticultural areas but has found it difficult to break into the domain of other established growers so instead decided to boost returns by improving his core operation.

“The ongoing challenge from my point of view is trying to work out where the market is going next and trying to be one step ahead of everyone else, while keeping our quality and service where it should be,” he says.

However, a major health issue for Barbie has encouraged them to enjoy the fruits of his labour by spending much of their time living in Kerikeri, while leaving the business in the care of long term manager Ian Bettridge.

He suggests small block holders seeking to grow a business should target a niche market where they can provide an unusual or value-added product like a pesto, sauce or oil.

“Just selling a plant at a dollar or a dollar fifty isn’t going to make you a millionaire, you’ve got to think what else you can do with it to make it work. I would be keeping an eye on culinary circles for something that other people aren’t growing in volume that could be sold on to restaurants.”

Contacts

www.livingherbs.co.nz

Ian Bettridge, operations manager

Phone (09) 412 7227

Try this at home

Growing herbs is always viable for home gardeners who can enjoy the benefit of fresh aromas and flavours in their cooking. Some herbs have specific requirements, but generally, free draining soil, reasonable moisture, fertiliser and a good amount of sunshine will keep them happy, says Tom. While in a commercial environment mainly slow release preparations are used to feed the plant for its anticipated life in the pot, at home natural fertilisers such as sheep droppings are just as good, he says. When feeding herbs you should carefully apply fertiliser to drip lines a little at a time to avoid the risk of burning leaves or stems, which can kill them.

Other common mistakes include planting too many or too closely together. Mint and parsley are particularly vigorous growers that will often smother other herbs if not given enough room or kept under control. Once they’re established, continual harvesting of growing tips on leafy herbs promotes new growth and helps keep them in shape.

Preventing herbs from going to seed also prolongs their life. Stress from cold or dry can often bring this on, so consistent care will reduce the problem which can also be addressed by plucking seed heads as soon as they appear. Some of the hardier plants, like marjoram, rosemary and thyme will also stand a good haircut if necessary to rejuvenate them.

print