What started with an obsession with a beautiful Mexican shrub, turned into a Billion dollars in annual sales and a patent on the flower.
Dave Young:
Welcome to The Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from mom-and-pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s sidekick and business partner, Dave Young.
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Dave Young:
Welcome to the Empire Builders Podcast where the countdown just ended and the podcast has begun. I’m Dave Young, alongside Stephen Semple, and we’re talking about empire builders, people that have grown a business, a category, all of those things, into an empire.
As we do, Stephen whispered the topic to me just before the countdown started. It’s kind of a seasonal thing and it’s poinsettias. I actually know a bit about poinsettias.
Stephen Semple:
Well, you see, this is the part. It was almost like I wish I had started the recording ahead of time because when I sent it to you, you were going off on the person’s name and you were starting to give a bunch of the history, and I’m like, “Geez, what does Dave not know?”
Dave Young:
I actually stumbled across the guy’s name. I was thumbing through a book in the Wizard Academy Tower.
Stephen Semple:
For those who’ve not been at the tower, there’s like 10 million books in the tower.
Dave Young:
Well, I happened to be looking for an old book we’re keeping an eye out for and picked up this old book that looked… It was old and it was a history of, I think it was an Andrew Jackson biography. There was a bookmark, a little piece of paper tucked into the book on a particular page, and it said, “This is the guy poinsettias is named after”, I think a guy named John Poinsett that somehow is written about in this book. I have no other information other than that. I looked at it, it’s like, “Okay, well, yeah, it would make sense if it’s named after a guy named Poinsett.”
My other tangent knowledge of poinsettias is my sister and her husband owned a greenhouse for a long time and grew poinsettias every year and sold them. They wholesaled them all over the state of Nebraska.
Stephen Semple:
Oh, is that right? Wow. Okay. There’s a billion dollars worth of these plants sold a year. It’s pretty amazing and as we all know, has almost become symbolic of the holiday season, certainly here in North America. And much of it was developed by one guy. It’s really quite amazing. It’s this Mexican shrub really, is what it is. It was first used in the 14th century by the Nahua?
Dave Young:
Probably.
Stephen Semple:
I’m probably pronouncing that wrong, people for a die and medical purposes. The plant’s brilliant leaves were so revered by the Aztec Emperor, Montezuma, that thousands of them have been transported to these high altitude capital every winter.
After Spain colonialized Mexico, Franciscan Monks dubbed the plant, the Flower of the Blessed Night and began showcasing them in-
Dave Young:
Really? Yeah.
Stephen Semple:
… annual Christmas processions. For the next few centuries it was popular in Mexico, but obscure to the rest of the world until, and it wasn’t John, you were so close-
Dave Young:
Joel.
Stephen Semple:
… last name was right, Joel. Joel Poinsett.
He was this wealthy southern unionist slave owner who in the early 1800s was appointed the first U.S. Minister to Mexico. So while in Mexico, he actually tried to execute the purchase of Texas, which made him a little unpopular in Mexico.
So on a trip in 1828, he saw the plant and was so struck by it that he shipped samples back to the U.S. The plant became known as poinsettia. It made its public debut in the U.S. at a flower-
Dave Young:
Cool. All right.
Stephen Semple:
… show in Philadelphia.
By the end of the 19th century, it was selling in markets in U.S., but there was a challenge. The plant was short-lived, it wilted and was hard to ship. It really only lasted two or three days.
Then everything changed in 1900. A German immigrant, Albert Ecke decided to open a health spa in Fiji. On his way to Fiji, he stopped in LA and decided to settle there, never made it to Fiji. He set up a dairy farm and a fruit orchard, and he also sold cut flowers as well as poinsettias. By 1909, poinsettias were selling so well that they basically became the focus of his business.
So in 1920, his son, Paul Ecke, took over the business and moved the business just south of San Diego and in 1930, the Plant Patent Act was passed, which allowed breeders to protect their creation. So he registered dozens of their creations and they actually acquired a prize breeding technique from an amateur German gardener and this became a massive protective secret that resulted in larger, fuller hardier plants.
At the same time, they started to heavily market the plant as the premier Christmas decoration. They sent out free samples to Women’s Magazine. They got on the primetime shows like Johnny Carson. Remember Johnny Carson would have just this whole huge background. By the 1990s they were selling 500,000 of these plants. And at the peak, they were 90% of the market at one point.
Then it got reverse engineered by John Dole, competition flooded the market and they declined to 50% of the market. And then in August of 2012, they sold to the Agribio Group.
Dave Young:
Interesting.
Stephen Semple:
Yeah. So that’s basically the arc and also the reason why, as you said, the tie in to John Madison because Poinsett was appointed as the U.S. Ambassador to Mexico.
Dave Young:
Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.
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Dave Young:
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Let’s pick up our story where we left off. And trust me, you haven’t missed a thing.
Now, I feel like I need to talk to my sister to find out were they part of growing the original or were they part of this uprising competitive edge that stole half the market?
Stephen Semple:
Reverse engineering, but it’s pretty cool when you consider they got up to 90% of the market with this version that they were able to create and protect for a long period of time.
Dave Young:
One of the biggest benefits of my sister and her husband growing poinsettias in their greenhouse operation is that traditionally, a greenhouse operation in a place like Nebraska, you’re going to do spring bedding plants and some perennials? Annuals? Annuals, right? The plants that you buy and you plant and they die, and now the next summer you have to buy more, right? They don’t come back every year.
The poinsettia is actually a perennial, but nobody treats it as such. because after Christmas, the leaves stop turning red, because it’s a seasonal thing. The leaves aren’t always red. What it gave them was another crop to grow in an off-season and something that you could sell for enough money to heat your greenhouses in the winter because I don’t remember the exact number, but my brother-in-law shared his gas bill with me once and showed, I was like, “Holy crap.”
In the middle of Nebraska in October, November, December, as you’re growing these plants, you got to keep these greenhouses hot. It was beautiful, like the greenhouses, they would do tours. People would come from a long ways away just to wander around in the greenhouses during poinsettia season.
Stephen Semple:
Oh, it would’ve been spectacular. And they grow actually as a tree in Mexico. They can get-
Dave Young:
They’re-
Stephen Semple:
Quite large, which-
Dave Young:
Yeah, they grew wild in California, in-
Stephen Semple:
I had no idea. But here’s the thing I thought that was really interesting about it is, they were growing this plant, they saw the change in the legislation, which allowed them to further improve the plant and protect that secret, but they really worked hard to grow the acceptance of that plant as a thing for the holidays. They sent it out to Women’s Magazine. Somehow they managed to get on the decoration and the Johnny… They pushed it out there and they used… Like today, we would talk about influencers, but they leaned into that, here’s these things that are influencers and as said, at a point, they were 90% of the market.
And whenever you get to 90% of the market, you always know you’re at risk. Somebody’s going to look at it and try to dethrone you. But to me, it was interesting that they not only improved the plant, but it wasn’t just, “Hey, we’re going to make a better plant,” but it was also, they worked hard to get it out into the popular culture.
Dave Young:
And make everybody that wasn’t in a place that you could easily just walk into a store and grab a poinsettia, wish they could. So all over the country, you’re watching The Tonight Show, and now you wish, “Ah gosh, those are beautiful. How do I get one here?” So that opens the door for people like my sister and brother-in-Law to take advantage of that.
I think it’s cool that they saw the opportunity to say, “Oh, okay, people want this. Guess what we have that nobody else has near us? We have greenhouses that all we have to do is heat them and keep the water running and take care of these little baby plants for a few months before the big Thanksgiving rush. And we’ve got a crop that we can make some serious money on in the winter time.” So really cool.
Stephen Semple:
And I just felt with the holiday season upon us that this was fun just to talk about poinsettia.
Dave Young:
I love it. Thanks for sharing that one, Stephen.
Stephen Semple:
All right, thanks David.
Dave Young:
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