01 January 2023
The new year is only four days old, and the weather is typically dull, grey, and gloomy. Strong winds push my car along to Wommelgem, which is around 8km east of Antwerp. Here I meet Dirk Mermans inside his newly built greenhouse complex packed with tropical foliage plants. He shows a high degree of New Year optimism; tropical foliage plants have yet to reach peak popularity, and while rising input prices will test his resilience, they will also lead to improved market equilibrium.
The Christmas tree still occupies pride of place in the entrance hall of the company’s new office building. But while Twelfth Night traditions will seal its fate, Dick Mermans’ tropical houseplants may be the answer for many homes looking for greenery to brighten up the place.
On 19 November 2022, the Flemish hortipreneur finally gathered business associates, friends and family to celebrate his 50th birthday. For the now 52-year-old, it was also the day to host a grand opening of his new greenhouse and office building, just in time for January’s boom in houseplant sales.
“It continues to be a peak price period,” says Mermans. “We have had two very unusual years with crazy trading. However, over the summer of 2022, the industry saw the first oversupply of Monsteras and Alocasias. I feel that the energy crisis will eventually lead to a shakeout, consolidation, and a more balanced supply and demand. At the same time, we see that consumers are tightening their purse strings as the cost-of-living crisis continues. So, I am not sure what this all means for 2023. As we speak, garden centres and cash and carry stores across Europe are filling their shelves with tropical foliage plants, but the pertinent question is whether this will translate into repeat sales. Ideally, the post-Christmas peak is followed by several smaller peaks throughout the year. Only then, we may conclude we are on the track.”
Mermans refuses to lie awake, thinking of a crisis. “Between 2007 and 2008, a crisis engulfed the global financial sector; we have seen periods with less demand for foliage plants. Currently, global prices for natural gas and electricity are soaring while Russia is waging its war against Ukraine. Basically, in life, there is always a crisis. I prefer to live on my own terms, be as independent as possible regarding harvesting my own cuttings and focusing on quality to keep things going.”
The good news, says Mermans, is that houseplants have yet to reach peak popularity. “The green revolution is still ongoing, at a slower but still steady pace. Trends always make a return. So, it is interesting to look at the 1970s and 1980s when people lavishly decked out their homes with houseplants. So far, we still haven’t reached that level. Trends usually last for 10 to 15 years, so considering that the houseplant boom began around 2017, there is room for growth. And all trend- talking aside, there is always a market for green foliage plants. The only thing that happened was that people were thinking: the sky is the limit, and everyone can grow a decent houseplant. This put pressure on the market.”
Situated on land a century ago dotted with cold frames in which smallholder farmers grew their vegetables, Mermans now stands here as a fifth-generation grower. His business now ranks among Belgium’s top large-scale tropical plant growers. He says, “There’s a handful of smaller plant growers, but in terms of decades-old heritage nurseries, there are only a few of them in Belgium. Small and large growers combined; I reckon there’s between 12 to 15 ha dedicated to growing tropical plants.”
Dutch constructors completed the company’s newest greenhouse in January 2020, with Mermans now ready for the next good challenge. He explains, “As a tropical plant grower, I am caught between two realities; the eternal quest for something new and original and an industry which is not particularly famed for its breeding breakthroughs. The most common practice is done by modern plant hunters who collect plants in the wild, try to tame them into the pot and subsequently protect them with breeders’ rights. I want to do things differently by actually breeding new houseplants. It certainly will be an endeavour, and no success is guaranteed within five years. I consider it more as a long-term investment.”
Mermans knows it will not be an easy job. “When reproducing foliage plants, you will need flowers. Then, if your extensive breeding work has resulted in a new tropical foliage plant, it will have to prove itself more than a flowering plant, as there is no additional benefit of colour. For example, an exciting new colour in Gerberas, automatically means a new Gerbera.”
To speed up his plans in plant breeding, he will soon meet some of the country’s plant scientists to establish a partnership. Business expansion in breeding requires additional space, which is why more recently, Mermans acquired a part of the neighbour’s land on which he hopes to build yet another new greenhouse.
Other important investments include a new co-generation plant; and a new double-energy screen installation. The future of the energy market is hard to predict, he says. “One advantage of being a Belgian grower is that you’re entitled to subsidies for new co-generation plants. All-in all, I would say that if you manage to operate your co-generation plant smartly, and if there’s no need to lighten your crop, you may be able to keep your energy costs under control reasonably well. But this means that you need to keep an eagle eye on the daily prices for energy products when selling electricity to the grid.”
Mermans grows around 230,000 houseplants per year, including Monstera, Clusia, Strelitzia, Philodendron, Tetrastigma, and Schefflera coming into pot sizes between 12-38cm. His customer base includes garden centre chains and cash and carry stores across Europe. Up to 70 per cent of his houseplants are soil-grown, and the remaining are hydroculture plants.
In the latter range, he needed to increase his prices slightly. Prices for soil-born plants have remained unchanged so far. “I’ve told my customers that I am willing to bear the first brunt by not raising my prices. If things start to get out of control, I will be back to discuss a new pricing strategy with them. No one wants to end up in a situation where you price yourself out of the market. That is when your plants at the final point of sales become too expensive and remain unsold.”
Speaking of outrageous prices, Mermans is happy that his life as a plant grower has snapped back into pre-pandemic normalcy. “Bids were made for €300, €400 up to €1,000 for extremely rare plants.”
Pondering over the current economic climate, he says that despite the myriad of crises, there is too much money in circulation with private equity firms focused on increasing the value of their investments. “Even within our sector, private equity buyouts have involved entrepreneurs at the forefront. How this will work out in the future remains to be seen. The fact is that these transactions deserve my admiration because they are proof of clever entrepreneurship.”
The semicentennial says he is still too much of a doer who is always questioning how things can be done better. His webshop Plantlovers.eu, launched in the spring of 2020, represents approximately 10 per cent of this turnover but is volume-wise less significant.
The webshop is now ready to grow into a more mature business venture. “That is an online plant delivery service which sells not only Monstera variegata but a wide range of different quality houseplants, supported by an even better back office and marketeers. If there’s gold in these online pixels? It’s not only bling-bling in online plant delivery. Successfully engaging with the end consumers can be a pain, requiring a lot of patience and energy. Plus, there is a delay with plant health certificates at UK customs post-Brexit, and then there are the time-consuming packaging, labelling, emailing, and shipping. As a result, you cannot earn money by putting a €5 euro plant in a box. As a grower, you really need to put value in that box. Why do luxury car brands earn money while others do not? Because they sell much more value for money.”
Mermans concludes by saying that from all the aspects of plant growing, the entrepreneurial part is what attracts him most. “My competitive spirit motivates me to hold steady in the face of adversity. We all know that online sales dropped significantly last year. Back in 2013, the market for tropical houseplants was sluggish. Even then, I loved to swim against the current. The good thing about the current testing business environment is that it will speed up the energy transition and single out the young boys from the mature ones. One will quickly realise that you cannot produce just blindly with the thought that one day you will be selling your products. It would help if you had products, customers, stock, and customer liability. I want my customers to think that when ordering at Dirk Mermans, the quality, price and service are good, and there are no problems.”
This article was first published in FloraCulture International in January 2023.