San Diego Business Journal

A surprising number of poinsettias , the flower most closely tied with the notion of a winter wonderland , get their start here in sunny San Diego.

Each year, the county's poinsettia farmers send millions of plants to growers in more than 50 countries and sell them to wholesale and retailers across the United States.

Paul Ecke Ranch in Encinitas collects royalties off more than 70 percent of the poinsettias grown in North America and 50 percent of those in the world.

Ecke Ranch and another major San Diego poinsettia producer, Altman Specialty Plants, say revenues are booming, and they are nearly sold out of poinsettias for the season.

Envisioning the Christmas flower among sun, sand and surf is not that far off. The poinsettia is native to Central America and Mexico.

Paul Ecke III, the third-generation owner of Paul Ecke Ranch, said the county wouldn't be home to the Christmas flower if it weren't for his grandfather, who he said is credited with commercializing poinsettias.

Ecke's grandfather grew poinsettias along Sunset Boulevard in Los Angeles in the 1920s. But as commercialization sprouted and the movie business grew, Ecke knew his poinsettias would not.

He brought them to Encinitas, where there was plenty of open space, Ecke III said.

He said the ranch, which sells cuttings, or starts, to wholesalers and blooms to retail flower shops, does most of its business in the summer. Summer 2005 sales exceeded Ecke's expectations by about 5 percent, but he declined to disclose specific revenues.

"A good summer means a good Christmas," he said, adding that he worries about high energy costs because he must heat 23 acres of greenhouses. All Ecke's and Altman's poinsettias are grown indoors.

Ecke said last week from Home Depot , one of several retailers he visited to gauge revenues , that "sales are strong."

Erin McCarthy, vice president of Altman Specialty Plants, which sells poinsettias in decorative pots to Home Depot, Target, Wal-Mart and others, said she's hearing from retailers that poinsettia sales are holding steady when compared to last year. Still, revenues for Altman are increasing over 2004, she said, because the company now holds a larger percentage of the market share. She declined to disclose specific revenues or market share information.

McCarthy said the company was worried when sales slumped before Thanksgiving.

"We can see now that it's going to be a great year," she said. "It's been very brisk since Thanksgiving. We're almost sold out."

In 2003, California growers sold more than 8,500 potted poinsettias at wholesale, according to the U.S. Department of Agriculture. Florida and North Carolina were the second and third most productive states, respectively, with not even half as many sold as California.

Poinsettias are the top selling potted flowering plant in the United States, according to USDA figures. In 2004, Americans spent $248 million on poinsettias compared with $194 million in 1992 , a jump of almost 28 percent, according to the agency.

More than 90 percent of business at Ecke Ranch comes from selling starts, or cuttings, to wholesalers. Ecke said less than 10 percent of his business extends from blooming, potted plants.

Ecke is the only major breeder of poinsettias in the county, creating such trademarked varieties as Plum Pudding, known as the first purple poinsettia, and Strawberry Punch.

Ecke and Altman still find traditional red poinsettias are the top sellers.

"Ironically, although we love the new colors and forms, at the end of ranch tours, when I offer a free plant to visitors, guess what they always pick?" Ecke said. "Red is absolutely the king."

New this year in the United States, say growers, is painted poinsettias , some with sparkles or glitter. McCarthy said the trend has been gracing Europe for a few years. According to her retailers, blue is the top-selling painted poinsettia.

Altman Specialty Plants uses a spray-painting machine that covers thousands of plants at once. The special poinsettia paint is formulated not to be visible on green stems and leaves, McCarthy said.

The doctored flowers retail for a couple dollars more than natural plants, she said. While a naturally colored plant retails, on average, for $6, she said, a painted plant can garner an average of $8.

Each year, poinsettias account for 8 percent of Altman's profit, but in November and December, they make up 80 percent to 85 percent of its profit, she said.

In 1992, Ecke said the ranch was forced to alter its homegrown tradition when a couple of German growers began selling poinsettias for a lower price.

To compete, Ecke Ranch took many of its growing facilities to Guatemala, where today nearly all of the company's starts are grown on two farms. But he said about 20 percent of the poinsettias Ecke grows in Guatemala come back to Encinitas to be rooted in the greenhouses. The remainder is sold to growers unrooted, or simply in a bag.

"When you're in business as long as we've been in business, there's always going to be change, and if you don't change, you'll die," Ecke said.