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KB Farms marks 70 years of growing flowers; implements new operating plan

In 2018, Kitayama Bros, Inc. will be 70 years old and this marks the right time to implement a new operating plan. We have examined the floral market, the competition, our assets and our risk tolerance and we realize that business as usual will not work.

KB Farms is about 250 acres of prime agricultural land and two million square feet of greenhouse overlooking Monterey Bay in the Pajaro Valley of Santa Cruz County, CA. We grow gerbera daisies, oriental and Asiatic lilies, snapdragons, lisianthus and several other flower crops in 1.2 million square feet of greenhouse and lease the rest of the land and greenhouses.

“Our Tradition is Growing” is the KB Farms motto and we define ourselves as flower growers. Flowers represent our past and our passion. But as we have done several times over the past 70 years, we will have to change to continue our business.

ROBERT-KITAYAMARobert KitayamaIn 1948, a poor Japanese-American family newly out of “camp” opened a small carnation farm in San Leandro, CA, and they grew it to be one of the largest flower growers in the United States.

However, over the years, a lot has changed. We honor our flower legacy, but it has become more difficult to be profitable in flower growing.

KB Farms has an excellent management team who plan to streamline flower operations, so the returns are healthy and able to fund future expansion and reward our people. How will we get there?

First, we will change our business model. Traditionally, we grow a little more than the year before with little tie to a production schedule. Then we cross our fingers and hope our sales staff can move the peaks and manage the valleys. This creates a lot of speculation sales that is expensive to manage and makes sales planning very difficult.

With help from a new enterprise resource planning system that forecasts production, the growers can focus on hitting production targets and sales will focus on fulfillment, negotiate future orders, and increase non-KB Farms product sales.

Being in Northern California is a huge advantage for KB Farms. We are the largest cut flower farm left in the San Francisco-Silicon Valley area, which is one of the wealthiest markets in the world.

Currently 65 percent of our flowers stay in California and we test crops that are locally in demand, hard to grow, and difficult to ship because we believe these are the crops that will increase our California sales. We also know that California is known for novelty flowers and we will continue to test unique crops that should interest customers across the country.

A recent factor in California greenhouse growing is cannabis. It has been agreed that greenhouses are the most desirable facility for growing legal cannabis and the demand for California greenhouse space has skyrocketed as a result. The lease rates for cannabis are 20 to 25 times greater than conventional lease rates. It does not take a genius to understand why there is only one cut flower grower left in neighboring Salinas.

But don’t worry — KB Farms plans to stay in conventional flowers, hopefully for at least 70 more years.

Robert Kitayama is chief executive officer and president at Kitayama Bros. in Watsonville, CA. He can be contacted at