Winter of rebirth

On a snowy morning in February, there are crews working throughout the Petitti family of nurseries. Everywhere you look at Willowbend Nurseries or Ridge Manor Nurseries, there are new hoop houses up, poly stretched across and protecting the young plants within. But the most work to be done will happen at Angelo Petitti’s latest acquisition, Herman Losely & Son Inc. Petitti officially purchased the Perry, Ohio, nursery on Dec. 31, 2021.

Before the ink dried on the contract, Petitti’s construction crews were clear-cutting swaths of trees and knocking down old buildings.

Angelo Petitti has a plan, and when he sets his mind to an idea, it’s only a matter of time until he makes it happen.

A history of acquisitions

Angelo is well-known for his Petitti Garden Center stores, nine of which are spread throughout northeast Ohio. The regional chain is no. 2 on Garden Center magazine’s Top 100 list of independent garden centers. One reason he’s been able to grow the retail side so successfully over 50 years in business is his purchase of several greenhouses and nurseries.

In 1990, he converted his original Petitti Garden Center store into a growing facility for annuals and perennials. In 1991, he bought a 30-acre farm in Madison, Ohio, to grow trees and shrubs for his retail stores. Since realizing the financial benefits of stocking the IGCs with his own supply, he’s purchased more greenhouse and nursery operations, like Casa Verde Growers, a greenhouse producer that ships 15-20 semi trucks daily to Petitti stores during the busy spring season.

In the spring of 2007, Angelo purchased Willowbend out of bankruptcy and Willowbend’s subsidiary container nursery, Ridge Manor Nurseries, out of receivership.

“It was bankrupt and it looked like it was bankrupt,” Angelo says. “It just had to be totally rebuilt. It has been quite a challenge but today, I think it's one of the finer nurseries around. It has a great reputation and just phenomenal inventory.”

About 15% of Willowbend and Ridge Manor’s production goes directly into Petitti Garden Center stores. The remaining 85% goes to landscapers, rewholesalers or other garden centers.

The nursery split is almost a mirror image of the greenhouse supply connection, where most of Casa Verde’s production feeds Petitti’s retail stores.

His latest acquisition brings 1,200 acres of field production, doubling the amount of Petitti’s Lake County nursery acreage and adding B&B products to the bareroot and container nursery operations. Losely will continue to do business under the Losely Nursery name as a division of Willowbend Nurseries LLC.

“The acquisition made a lot of sense for a variety of reasons,” says Willowbend president Joe Allio. “But no. 1 is that we're centrally located between both facilities. Our shipping facility at Ridge Manor is about 10-15 minutes away. And Losely is actually closer, about five minutes away.”

Now that they’ve created a one-stop shop, Angelo expects Losely’s customers to combine orders and buy containers from Ridge Manor, for example, in addition to their usual Losely B&B order. Since it all ships together, it’s an enticing opportunity for additional sales without additional freight costs. And the wholesale nursery side of the Petitti family of companies keeps growing.

“The nursery business is not quite as big as the retail, but it's getting there,” Angelo says.

A consolidation trend

Consolidation has been happening in the nursery industry, and all over the country. There are fewer nurseries now, but they’ve become bigger nurseries. Some went out of business; some were scooped up in acquisitions.

However, Angelo thinks the no. 1 reason for industry consolidation is a lack of interest from the next generation in taking over the family business. Longtime owners are getting older. Couple that with favorable economic conditions for getting high prices for their land, and many are taking the opportunity to get out.

“It’s a tough industry,” he says. “It’s very capital intensive and labor intensive. If you’re not of scale, it’s hard to attract the younger generation to it.”

Karl Losely was the third-generation owner of Herman Losely & Son. Herman founded the business in 1949 after returning home from World War II. His son, Edward, joined the business in 1951. Grandson Karl joined upon graduating from Ohio State University in 1977. Karl was an only child and had no children of his own, so a traditional succession plan was out of the question.

As a nursery owner, you want to leave what you’ve built in good hands. In Angelo, Karl found a buyer who appreciated what he had and would know what to do with it.

“Losely built a really strong name in the nursery industry,” Angelo says. “Very, very highly respected in the industry. So, there were a lot of benefits for us to purchase them.”

Petitti has no desire to expand his nursery network past Lake County, Ohio. He plans to keep building or expanding if the market demands it, but the efficiency of having 2,000 acres of land for nursery production within a 7-mile radius is an ideal scenario.

Other growers or retailers looking to add a growing element to their operations may find that land is hard to come by, at least usable land.

“We're very lucky that we have plenty of land availability over here,” Angelo says. “At one time, this was the nursery capital of the country. Unfortunately, it's all diminished.”

The rich glacial soil of Lake County and its central location 400-500 miles from 75% of the U.S. population still holds true. He hasn’t closed the door on more acquisitions, as long as they fit within his parameters.

“We have plenty of opportunities to sell, plenty of opportunity to expand to whatever we see the needs are,” he says. “We'll do it smart. It will be well-thought-out. It all has to fit and it all has to be beneficial.”

Investing in the future

Angelo and his son-in-law Joe Allio, who is president of Willowbend, are excited about the possibilities Losely presents. They have also targeted several areas for improvement. Consolidation and automation are the top two. Willowbend and Ridge Manor have become heavily automated nurseries and Petitti wants to leverage what they’ve learned with Losely.

“If you're not automated today, it’s very difficult to be very cost effective,” Angelo says. “It’s an area that they were weak on. I think their strength was that they grew a lot of unusual varieties. It made a lot of sense for us to acquire that as we are so systemized.”

First up will be planting equipment and spraying equipment. At Willowbend, Joe says they use GPS-guided augers that drill the specific holes ahead of the planting crews. He plans to use the same system at Losely, just with a bigger auger to accommodate the B&B root ball. They also have a smart sprayer for fertilizer that can cover their entire acreage in a matter of 3-4 days. It has a top speed of 25 mph and will continually recalibrate itself as it’s driven to whatever speed you choose.

Next will be trimming machines and spades. He also plans to evaluate the equipment in the loading area to see how effectively it works.

Angelo sees automation as a necessity for survival.

“I don’t think you have any choice,” he says. “I think if you want to be profitable, you’d better be automated. If not, it’s not going to work out so well. Typically, the nursery industry has been a very low profit industry. The pandemic gave the industry a boost but that's not going to be there forever. So, at the end of the day, it comes down to operations. You have to be a low-cost producer in order for you to be able to survive the ups and downs and still make money.”

New look at Losely

Bringing Losely into the fold will take some time. Angelo and Joe want to optimize Losely’s layout, especially at the main farm. That process has already started and will be ongoing through the next 2-3 years. The entrance to Losely’s main farm was congested, Angelo says, and he’s planning to knock down several existing buildings to improve traffic flow and increase the shipping area.

Trucks will no longer have to wind their way through curving paths to make a delivery or pickup.

One reason Losely stood out for Petitti was its specialization in balled-and-burlap plant material. Willowbend specializes in field-grown bare-root plant material. Ridge Manor is a 100% container nursery. With Losely’s nearly 1,000 diverse varieties of B&B trees and shrubs, there’s a good chance customers will be able to find whatever plant they’re looking for, and in their preferred specification.

Losely customers have voiced concerns that Petitti’s takeover would spell the end for one of the premier B&B suppliers in the Midwest. Options have dwindled as production of the B&B style has been diminishing, Angelo says.

“A lot of them have gone out (of business) that do this type of material,” he says.

Other former B&B growers have switched to container production. But there is still viability for B&B, Angelo believes, because certain plants do not grow well in containers, and landscape architects are still specifying B&B in their designs.

However, despite the fact that Angelo Petitti is the new owner, don’t expect Losely-grown plants to be for sale at Petitti garden centers across Northeast Ohio. The B&B material isn’t really geared for garden centers. Angelo may have plans to change the way the nursery operates, but he doesn’t want to change the product mix.

“Keeping the mix and improving the mix, that is definitely the goal,” he says. “The biggest thing now is making sure that we are continuing and not disturbing the cycle of all the plants that they have.”

© Taylor Kindell, Petitti Garden Center

Going forward, Losely plantings will be made on Willowbend acreage. And once Losely’s in-ground inventory is sold, new plantings will be made at Willowbend. As Losely’s fields empty, Petitti construction crews will rebuild the nursery to their specifications. The goal is to organize the nursery in a way that consolidates the same plants in the same area. This will reduce the amount of labor needed to manage and maintain the nursery. Eventually, all shade trees will be in one area, evergreens in another, ornamental shrubs in their own area, organized by plant family. Consolidating will reduce costs and improve efficiency. Joe says that’s why closing in the footprint at Losely is a priority.

“There are nine different farms that they oversee,” he says. “You have varieties of the same plant at nine different places, and they have to send people out to all of them to manage, whether it's fertilizing or trimming. If you consolidate it onto one footprint, you're able to see everything in terms of that one variety and get everything on a schedule, have the trimming machines there and then be able to take care of that material in a timely fashion.”

Consolidating crops also dovetails into the benefits of automation. For instance, you can cover a lot of ground quickly with machines like the smart sprayer, if your nursery is set up to take advantage of it. Otherwise, you waste time moving the equipment from place to place.

“Instead of hooking it up on a trailer, driving 15 miles one way, unhooking the equipment then going and doing one little swath of area, you can cover 50 to 100 acres at a time at the same crop,” Joe says.

Continuing improvements

Consolidation also applies to propagation. Over the last two years, Petitti has added four million square feet of hoop houses. Joe says propagation for Willowbend and Ridge Manor will be centralized at Willowbend by the end of summer. The crews have built 43 houses so far, with 21 more to come this summer. The existing propagation facility in Madison will continue to be used, but for their “giant items,” the high-volume varieties that are propagated tens of thousands at a time.

Another investment Petitti is making in his nurseries is housing for H-2A workers at both Willowbend and Ridge Manor and for the Losely workers, as well. Two onsite dormitory complexes will provide more comfortable lodging for the workers, drastically cutting their commute and giving them a place to have a friendly barbecue.

For now, all the Losely employees will stick around. Petitti plans to go through a full season to understand roles and responsibilities. After evaluating, he will make staffing decisions.

“I think they have some really good talent there that we will be able to use, and we have some really good talent that will be able to help them,” Angelo says. “Some of the areas that we have weakness on our side, they have some strengths in that we're going to be able to really benefit from.”

Another sizable investment is the new potting barn built at the Cass Mill farm to accommodate new HydraFiber-compatible potting machines. Land has already been cleared for a similar potting barn at Losely, where they had recently added some container production prior to the sale. Joe says the double line will be able to handle 40,000 pots per day with 16 people working. Angelo has been switching his growing media to HydraFiber in all his facilities. He says since peat moss is scarce, expensive or both, he chose HydraFiber because it’s reliably available and less expensive. Replacing peat with this product was expensive because it requires special equipment to decompress the bales it comes in, as well as grind and fluff the fiber itself. However, it’s a lower-cost material and it retains more water by a third than their previous mix, he says. In trials, he’s found that material roots faster in the HydraFiber mix, as well.

Top liners

Angelo says another way to reduce costs is to start with a better liner. He anticipates this being important at Losely because successful harvest rates are much lower in the B&B world.

“If you plant 1,000, you want to harvest 990, not 700,” he says.

This is why he’s putting in the effort to reorganize, replant and rebuild Losely: so it works with the systems he wants to put in place.

“The ground has to be perfect,” Angelo says. “If the ground is not perfect, you're not going to harvest things at the same time. They're not going to be all equal quality, equal size.”

One of Losely’s challenges was coming up with enough inventory to supply its customers. One of Petitti’s goals is to ramp up their numbers to match the demand. An average turn at Losely takes about 5-6 years. Angelo is trying to bring that down to 2-3 years for most items. Of course, some items, like 6-foot evergreens, just take 10 years to grow. There’s no getting around it. But by speeding up the turn where they can, Losely will become more profitable.

Angelo says Willowbend harvests everything they plant. At Ridge Manor, every container is salable. All items will be sold this year and Willowbend rotates fields and uses cover crops every year. The rotation is a key system that Angelo expects to establish at the Losely farm.

“If you don't have that [rotation], for every year to maintain that longer, you’re absorbing all that cost and you’re not getting more for the plant,” he says. “You're still going to sell the plant for the same price. You're not getting more for them but you're putting so much more labor into them.”

For more: petittigardencenter.com; losely.com; willowbendnursery.com