Etera Is E-commerce Wonder

Nurseryman Grows Horticulture
eBusiness from the Ground up

by Janet O’Mara

Carl Loeb, founder and CEO of Mount Vernon-based Etera, discovered a passion for agriculture in the remote Australian outback. Only in his 20s at the time and armed with a fresh teaching degree in English, the Mercer Island native left the United States with his wife and son to teach at a regional high school. Soon he was spending weekends on his boss’s 600-acre ranch, where they raised wheat, sheep and cattle. It didn’t take long for the agricultural bug to bite hard on Loeb’s spirit — it was a life-changing experience.

“When we came back to the States, my interest was in doing something in agriculture here, too,” he notes. “If I had my druthers, I’d probably be sitting on top of a four-wheel-drive tractor on a wheat field somewhere in Eastern Washington, but that was rather beyond my means then.” Instead, he chose the Skagit Valley to look for opportunities.

“Horticulture at that time was kind of a poor man’s agriculture,” he says wryly. But it served as his ticket into what he wanted to do, which was, as it turned out, not only growing plants, but also building businesses. “I got started in it as something I could do and be my own boss.”

In 1974, Loeb began with a plant nursery in west Mount Vernon. He sold that in 1977 and founded the current Summersun Nursery on East College Way. Along with partners Duane and Joan Melcher, now retired, and his wife, Cheryl, he developed a retail store, a substantial wholesale business and a Montessori day care for employees’ children. It was all successful, but eventually, Loeb was ready to move on to an even bigger adventure — building a new company, a nursery brand and a new way of doing business for the independent garden center.

“I like building a business,” he says with satisfaction. “I like thinking through how things will work better.”

Along the way, he also developed an innovative method of growing perennial garden plants: the patented Etera Growing Process (EGP).

Etera was founded in 1997; in that same year, he sold Summersun’s wholesale division to California-based Color Spot. Today, Etera has four facilities. The Etera Gardens headquarters, demonstration gardens, 13-acre greenhouse, growing fields, and processing and packing facilities are on South Riverbend Road in Mount Vernon. In addition, another, equal-sized perennials production site is located in Eastern Washington, close to Matawa. Etera Networks, home of Internet and other technology development, is located near Burlington, just west of Interstate 5. And Etera Europe Networks and Etera Europe Gardens will be launched in the next six months in Germany.

 

Clear brand focus

“When we started the company, our mission was to create the premiere garden brand,” he enthuses.

“We’ve had a very clear focus on what is the brand, how is it going to be developed, what are its limitations and where can it be applied,” he explains. “Knowing what it actually takes to accomplish those is one of our true strong suits.”

In short order, Loeb’s ideas have attracted millions of dollars in venture capital and a management team with years of cumulative experience. Four horticultural veterans from the Oregon-based Jackson and Perkins decided to move north and join the new company. They are: Roger Heins, Etera’s senior vice president of marketing; Ben LaCrosse, director of financial planning and analysis; John Walden, director of production; and Debbie Paape, director of marketing. On the Etera Networks side, Ken Schneider, president, was transplanted from Microsoft, and there are many other examples.

“My management team is deep,” Loeb explains. “We’ve been very fortunate in attracting good people; we have literally centuries of combined horticultural experience.”

Loeb says attracting that kind of talent complements his management style as well. “I tend to delegate pretty deeply and freely,” he observes. “I don’t really care if mistakes get made as long as decisions are made. That is a good management style if you’re in a fast-growth mode, because it gets the best out of all the people that you have.

“If you start off with pretty good people, you can go pretty far pretty fast,” he adds.

Company culture can be a part of attracting and keeping good people, too, he notes. “People go to work for companies that have a cultural orientation that matches their own, a kind of self-filtering process. Here, we have an open, stimulating, creative environment and attract those kinds of people.”

Abundant experience has been used to nurture both plants and business at Etera. But it’s more than a successful nursery. Etera boasts two major differences from other horticultural companies. The patented, plant-growing process is one; the approach to marketing, distribution and partnerships with independent garden centers is another.

Etera’s patented growing system, EGA, starts perennials in the greenhouse they spend their first growing season in outside fields, planted in bottomless plastic pots. This enables them to develop an ultra-strong root system, according to Loeb. The perennials are then harvested during winter dormancy, plugged into Etera-developed, plantable, trademarked, fibrous pots made from coconut husks, filled with an enriched coco-peat planting medium, and placed into a warehouse-sized freezer for a short time to extend dormancy. As retailers place their orders, the perennials are then finished in Etera’s 13-acre greenhouse, equipped with radiant-heated floors, to also encourage root growth.

 

Dressed up for market

Each plant leaves the greenhouse only when it has produced its new spring growth. Dressed up for market, it is packaged in the colorful Etera hexagonal wrapper with comprehensive information specific to that plant and an embossed metal stake for the customer’s garden. The process produces plants that “thrive and bloom with a huge head start,” thanks to the vigorous root system, the company claims.

In addition to a large inventory of quality plants, Etera partners with independent garden centers to share Internet technology, built-in marketing and nationwide distribution. Independent Etera retailers enhance their sales — and Etera’s — with in-store promotional materials; an online, customized Web site with training; and online gardening tutorials and product information. The dealer’s in-store inventory is augmented with a “virtual inventory” of not only Etera products, but also those from other national suppliers. Garden centers do not have to stock, ship or bill for all products sold on their Web site, but they receive a net margin on each sale. Garden centers can thus stay independent, but compete more effectively against the national, “big box” companies for sales.

It is an Etera-described “click and mortar” approach — Internet capabilities combined with a sophisticated information and distribution system working in partnership with local, established, trusted nurseries. “If we were just a dot-com, we would have already blown up,” Loeb remarks.

“We’re creating a capacity for independent garden centers to access and use our multimillion-dollar technology platform to bring e-business into their everyday activities,” he explains. “We’re turning small businesses into multichannel retailers.” One of Etera’s slogans for its dealers is: “We want to help you grow,” he says, adding, “Because it’s so horrendously complicated and expensive to build and maintain this stuff, they need a partner like Etera or they don’t get there.”

“This is not something that has been done before,” Loeb explains. “It’s an application of technology that is more challenging than just building a Web site. Because we’re creating so many infrastructures and an entire commerce back end, it probably is more like building a telephone system or a railroad.”

 

Still growing slowly

Even fast-moving companies like Etera sometimes temporarily progress a little slower than their managements prefer, Loeb admits. “The adoption rate by individual garden centers is a little slower than I thought it was going to be,” he muses. “And the current version of the Web site is only about 70 percent of what I had intended.”

Still, Etera has enjoyed phenomenal success in just three years. The Web site is up and running, featuring 1,400 garden centers across the country. By spring, more than 2,000 garden centers will be online, in every state. More than 10 million plants will be shipped this spring. Etera also just added point-of-sale scanning systems for its dealers, complete management systems for sales, inventory and accounting.

At the same time, no expense has been spared to produce a complete line of informational materials, advertisements, in-store promotions, plant labels and catalogs. Not satisfied to begin life in black and white, Etera’s lush, full-color catalogs have been award winners from the very beginning, with photographs of every plant and abundant reference information. Pronounced not just beautiful, but “truly useful” by the Catalog Age judges, one added, “I suspect every copy . . . is used over and over to answer questions for customers at garden centers throughout the country.”

In addition, this spring, all Etera plants will be shipped by trucks cross-country to distribution points for quicker shipment. “Another capability that our garden centers will be able to access is that we will have wholesale inventories of growers from around the country,” Loeb explains, “and those products can be special-ordered and quickly delivered, even just one, to any other garden center.”

Those who know Loeb have no doubt that Etera will continue to succeed. Former partner, Etera shareholder and friend Duane Melcher says, “It doesn’t take too long talking with him before you know this is a guy with whom you want to be associated.” Melcher says one reason for Loeb’s success is the ability to deal with the unexpected. “He has an uncanny ability to take anything negative, think it through, and turn it around to make it positive,” he says.

“Carl Loeb is the smartest and greatest entrepreneur I’ve ever known,” he enthuses and he confidently predicts that someday, “Etera will be the largest perennial operation in the world.”