Jose “Joche” Smith

Photo courtesy of Costa farms

In January, Miami-based Costa Farms announced the acquisition of Battlefield Farms, a Virginia-based grower with a 40-plus year history and a product line of more than 700 varieties of annuals and perennials. Costa CEO Jose “Joche” Smith calls it a strategic acquisition that will enhance Costa’s market share and significantly extend its geographical presence and footprint in the horticultural industry.

“We are eager to welcome the Battlefield team into our Costa Farms family,” Smith says. “Battlefield’s reputation, knowledge, and esteemed team complement our mission of ‘Team, Solutions and Growth.’ We are thrilled to integrate the Battlefield team’s experience and legacy into our operations.”

Battlefield leadership echoed the sentiment.

“This is a proud moment for us at Battlefield,” says owner Bobby Van Hoven. “We’ve always been committed to horticultural excellence, and we believe Costa Farms’ extensive reach and resources will enable more top-quality plants to reach even more homes and gardens.”

Battlefield operates 45 acres of greenhouse production and 20 acres of outdoor production.

We caught up with Smith in January to learn more about the deal.

Greenhouse Management: What precipitated the conversation of a possible acquisition between Costa and Battlefield?

Jose Smith:

Bobby and I have been friends for a number of years, and we’ve talked about the possibility of doing something like this but didn’t get serious about it. Toward the end of 2022, Bobby reached out to me and the conversation went from ‘what about’ to getting serious about an acquisition. And we’re not new to acquisitions. From 2010 to 2020, about half of our growth was fueled by acquisition. We’ve always been a company that has been growing and expanding.

However, 2022 was the only year Costa lost money and we first needed to right the ship. We were certainly interested, but we had some work to do first. The reason 2022 was a rough year begins in 2020. After the first month and the shock wore off, things opened up like gangbusters, and we had to put any thought of acquisitions on the back burner. We continued to hit the pause button in 2021 because there was so much organic growth.

There was so much demand in ‘20 and ‘21 but not enough product, and all of our retail customers were asking for more and more. We put up a lot of infrastructure and product, then the demand fell off in ’22 and we were stuck with excess capacity.

2023 wasn’t a banner year either, but it was a much better and profitable year. When we started thinking about acquisitions again, we had to consider if it was going to somehow help us with our excess capacity.

So we resumed the conversation with Battlefield in the fall of 2023 and closed the deal in January 22, 2024. That’s a relatively short time to close the deal. And that is due in part to some great people. We have a phenomenal partner, Markel Ventures, which is a specialty investment firm that owns the majority of our shares. They’ve been super supportive of our growth and investing in our business. I am thankful for Bobby and his team and Markel to get this done.

GM: What are some examples of how Battlefield conducts their business that attracted Costa to this deal?

JS: Generally speaking, the core values of the organization are very similar to ours. Battlefield has a humble group of leaders that want to do better for the industry. Since our team has been working the last month on the transition at their place, they feel like they’re at home. And we’re getting the same word from Bobby.

They’re an annual and perennial supplier, providing product throughout the Mid-Atlantic and the north.

Combining these resources will improve our perennials offerings. Battlefield also has a large cooler space for bulb sales.

We have an annuals facility in Ashville, North Carolina, and a perennials facility in Trenton, South Carolina. One of the things we look for in an acquisition is logistics. Is their facility close enough to one of ours so they can help each other out? With Battlefield in Rapidan, Virginia, all these facilities will lean on one another. This will be better for our retail customers. That’s not going to happen in ‘24, but it will happen in ’25.

GM: What’s next and do you know what the transition looks like yet?

JS: In terms of operations, nothing really changes. Bobby and his brother Anthony are going to continue to run that business, and their father Jerry is still involved. We value leadership in a big, big way.

There’s a lot of collaboration on product offerings, but it’s really about the people.

GM: Talk about Costa’s growth (past and future), as well as your assessment of the current horticulture market.

JS: Over the years the industry has gone through some softness in the economy, but we’ve done well.

We’re not trying to sell refrigerators — we’re selling $10 and $20 plants, so we’ve done ok. Sales have been flat since the Covid rush wore off. But we’re pretty bullish about spring. After all, buying plants at springtime is an emotional thing and consumers aren’t giving up on that.

We’re concerned with those shoulder months — aside from mums and poinsettias since they’re staple — but we’re trying do everything we can to put more value in our offerings. Overall, we’re not bullish that there will be a lot of organic growth this year. So the way to grow is through acquisition.