Coming up roses

Neve Brothers, best known for growing hydroponic roses, traces its roots back to the late 1950s, when Chris Neve's grandfather, grandmother and father emigrated to the United States from Italy. When they arrived in San Francisco, they went to work in the greenhouse industry.

"At the time, there were a lot of Italian immigrants working in the greenhouse industry," Neve says. "That's where they started. My dad's grandfather was working in the industry too."

In the 1960s, Neve says his grandfather moved the family to Petaluma, a city located about an hour north of the Bay Area, and opened a nursery. The business started out producing carnations before transitioning to roses. In 1986, Lou Neve and his brother took over the business from their father and moved it down the road to found Neve Brothers under its current name. In the mid-1990s, Lou bought out his brother and took over the business.

Around that time, and into the 2000s, Lou was joined by the next Neves: Chris and Nick, his two sons. As the children of a greenhouse owner, they practically grew up in the greenhouse. They both worked there in high school and both joined full-time in the late 2000s. Chris took some classes at Santa Rosa Junior College, while Nick attended UC Davis and Sonoma State, but both were always going to come back home.

"We were always involved here from a young age, whether it was my grandmother taking us to farmer's markets, bringing flowers into the greenhouses or little menial tasks," Chris says. "This is where we spent our summers and we just grew up around it. It's definitely part of our way of life. Like any other farming, ranching, greenhouse growing family, it shapes you a certain way."

The business is also bigger than ever, with 400,000 square feet of growing space at one location and 100,000 at another. Chris and Nick (who is a few years older than Chris) run the business with Lou around every day still. It's just how the business works best — especially in 2020, when Neve needed to be nimble in order to thrive.

"I've been working here realistically all my life," Chris says. "Now me and my brother are the new generation of Neve Brothers I'd guess you'd say."

During the pandemic, Neve's sales have shifted away from events and more towards end consumers who are gifting flowers to friends and family.

Courting the right customers

According to Chris, a key part of Neve's success is the type of customers it goes after. For the last several years, he says Neve has moved away from wholesale and shifted to something more akin to growers on the East Coast or in the Midwest by selling to independent garden centers. Chris says the shift is for a simple reason: the price is right.

"It's hard to produce those items and sell them at those prices and still make it be viable as a California business," he says. "It's not that easy."

According to Chris, prices for wholesale flowers (including, but not limited to, roses) have become lower in recent years as more crops are produced outside of the U.S. and the number of producers in California drops. (He says that there are now seven or eight rose producers in California, and that there used to be around 30.) As that's happened, prices for roses have dropped to where he cannot make a reasonable profit selling wholesale. A lot of the commercial operations left, he says, focus on producing a high volume of product and maximize profits that way.

"They all just produced the numbers and say "Well, we're getting 30 cents a stem" or "we're getting 40 cents a stem" and just kept saying "we need more numbers," he explains.

Neve instead went the other way and decided to stake out a niche as a higher priced, but higher-end, product. They are able to do that because of the clientele available to the them in and around the Bay Area.

"More and more, we got away from accepting bottom dollar and selling at volume and switched over to higher-end and producing a better quality of product," Chris says, noting that Neve isn't the only business to seek out this market. "Maybe the wholesalers aren't interested in that, but I have the San Francisco flower market here and I have a lot of customers in the Bay Area, so let's get the flowers into their hands. Why am I taking a discount for selling something I know I can sell direct?"

The customers, Chris says, are a mix of independently owned grocery stores and various high-end events — think weddings, events at wineries, corporate events, etc. — held across Northern California. The former, he says, accounts for about 40% of the company's business and gets their product in front of the customer willing to pay a premium for plants.

"There's the Safeway, and then there's the place down the road that you maybe pay more for, but their stuff is the best," Chris says. "We have a lot of those here and it's a niche market in our area that is a cut above. And there's a lot of other ones just like it. It's Sonoma Country, it's Napa County. People are going into a store and they aren't buying the box of wine. They're buying the $45, $50 bottle of wine and don't want to spend $6 on a random thing of mums. They want to spend $15 or $18 and get something really nice."

The latter, which he says accounts for 60% of the company's business in a normal year, comes from catering directly to the different events held every weekend year-round. Weddings, for instance, can bring in anywhere from $6,000 to $8,000 in most cases. In a non-COVID year, Neve can directly service as many as 200 weddings in a year on top of other events.

"There's hundreds of venues up and down the Bay Area and they end up being a really big driver," he says.

One reason why Chris believes Neve has been able to succeed with moving away from wholesale is because of the brand has cultivated in the Bay Area for years. For instance: they are a staple at the San Francisco Flower Market. Located in the city, the market was founded by Japanese immigrant flower growers in the 1950s and today serves both wholesale customers and the general public. By being a consistent presence at the market, Neve was able to brand itself as a high-quality grower to the end consumer, florists and any potential customer who might happen to come in on a given day. There, potential customers got to see its wide offerings of roses — garden roses, spray roses and more — plus the other flowers Neve grows.

"We've had a stall there for what feels like forever. The original Neve Roses was there in the 70s," Chris explains. "Targeting the customer wasn't that hard — in some cases, it was like them coming to us."

According to Chris Neve, the company was able to limit cutting hours during the pandemic by catering to the customers that were available and not only banking on the ones it traditionally works with.

COVID concerns and opportunities

Like most businesses, Chris says Neve had a stressful 2020. Ultimately, though, he says it was a successful year even if it wasn't like any other one he remembers.

"It's been interesting and good," he says. "To be 100% honest, this isn't what we had planned. It ended up working out as a whole year of business." Even now, months later, Chris says the last order sent out before shutdowns began is March is still pinned a wall in the Neve warehouse, serving as a reminder of what that moment in time was like.

That, Chris says, happened in March right as the pandemic began in earnest in the U.S. At that time, no one at Neve was exactly sure what would happen next.

"If you had asked me on March 17 how this year was going to go, I wouldn't have known," he says. "When we hit that point, we figured we'd take a hit because weddings would be held off until June or July, and then maybe it's August, and then it means that the fall is going to be busy with weddings. And then that gets pushed back. And then none of them happened. If you asked me how we'd do in that case, I'd have had to put another notch in my belt because things are going to get a little snug."

Fortunately, however, Neve was able to nimbly pivot and change up its business model. With event revenue unavailable, they started filling in open spots that presented themselves. For example: On Mother's Day, Chris says there was a shortage unlike "anything he's ever seen" and they sold out their stock fairly easily. From there, they slightly expanded their ordering radius — drivers went farther out than they usually would — and picked up customers at brick-and-mortar flower shops who they might not usually service.

"I think if you were to ask any California grower, they didn't have too much of a problem moving through a lot of their product because there wasn't enough volume to fill everyone's needs," he says. That, he says, continued through the summer and fall as people sent flowers to family members they were unable to see in person due to COVID-19. That, in turn, allowed Neve to avoid cutting back on stuff in ways they expected to. According to Chris, the company only had to reduce hours for each workers by three per day for a roughly two-week period in the middle of the summer.

"Thankfully — and I'm so happy that I was wrong about our idea of how it would go — it ended up quite the opposite," he says. "Looking back on it, I can definitely point to a few factors I didn't realize at the time that would end up working out in our favor."

The next steps

According to Chris, he's unsure about what the new status quo will be post-pandemic as society begins to open back up, with weddings and other large events expected to resurface in droves in 2021 and 2022. The expectation internally, he says, is that brick and mortar sales will drop as people begin to visit each other safely.

It helps Neve that it has its history to lean on. Lou, Chris' father, is still around daily and largely focuses on big picture planning and goal setting for the business. Nick, Chris' brother, oversees growing operations and makes executive decisions in that department. Chris, meanwhile, handles the day-to-day management in the office, which includes shipping. While all have their own area to oversee, it's all a collaborative effort with an eye on the bigger picture.

"We all work at it, we all have our different avenues we take care of or spearhead," Chris says. "I'd say one of the main things is just having the willingness to tackle bigger on-going projects. It's easy to be complacent at a certain point in time and say that it's good enough for now. But the moment you have more involved hands with it, it's easier to tackle more progressive ideas about where the business is going to go. And not just the revenue side of it, but where the business is going as a whole."

They also know they have to adjust in the right ways. It can be hard to move on from a plant quickly, but Chris says Lou instilled a mindset to not dwell on what hasn't worked in the past.

"If people don't like it and sales are slagging, some growers will just find ways to sell it because it's in already," Chris says. "My Dad's philosophy is 'pull it out, get rid of it, find the replacement right now' because I'm not sticking with a loser," he says, noting that he'd rather bite the bullet, pay for new plants, a new section and start with something better.

"That's the mentality around here, all the time, for us. You figure it out, you think on your feet. There's no easy ride, especially in this business. If you can't adapt and find ways to make it work, you're in trouble. That's business, that's life."

Source and Photo Courtesy of Greenhouse Management

Source: Greenhouse Management