Navigating in a Changing World

The world is changing rapidly. With developments happening so quickly, it seems that nothing can be taken for granted. As this poses major challenges to growers worldwide, we dedicate a series of articles to zoom in on the topic in collaboration with businesses and entrepreneurs, researchers, and other stakeholders. Innovation and development are two of ICL’s core values, so we feel a responsibility to help our community of growers. In these inspirational industry stories we aim to give growers new ideas and perspectives to help them navigate in a changing world, now and in the future. 

High energy prices are creating huge challenges for greenhouse farming in western Europe. Many nurseries are forced to change their growing strategy or are even leaving their nurseries fallow this winter. To keep the costs as low as possible, Phalaenopsis nursery Ter Laak uses the power of optimization. The nursery raised its ambitions to become more sustainable, while at the same time saving as much (energy) costs as possible.

Richard Ter Laak cuts to the chase when he says that 2022 was an eventful year in more ways than one. “It actually began back in September 2021; that’s when energy prices started to shoot up. Luckily, in collaboration with our consumers, we could still manage,” explained the business owner. He is leading the orchid nursery together with three other board members – among whom his brother Eduard – and a management team. The nursery in the Dutch village of Wateringen grows phalaenopsis on a total 17.5 hectares, spread over two locations.

The Ter Laak nursery grows orchids on 17.5 hectares

Things really went awry in February 2022, when Russia’s invasion of Ukraine sent energy prices through the roof and Ter Laak Orchids lost part of its market. “We used to sell about 15 to 20% of our orchids to Russia, Ukraine, and other Eastern countries. Our market vanished practically overnight, and many other nurseries found themselves in the same situation. These products needed to be sold in other European markets, which added to price pressure. Although this situation did stabilize somewhat over time, 2022 was still a challenging year.”

Investing in LED

Ter Laak Orchids was by no means shielded from the challenges posed by high energy prices in 2022, despite having made considerable investments in sustainability in recent years and enjoying a reputation as a sustainability pioneer. The business had already purchased heat pumps and solar panels and, a few years ago, created the ‘DaglichtKas’ (daylight greenhouse): an innovative greenhouse concept that uses energy from sunlight for heating. “We’d also replaced some of our SON-T assimilation lamps with more energy-efficient LED luminaires,” explained Richard. “We accelerated this transition last year by investing heavily in LED lamps. We’ll do the same this year, which means that our entire company will soon be fitted with LEDs. This will save us about 45% in power costs compared with SON-T lamps.”

The innovative roof uses sunlight to heat the greenhouse

A Thousand-Piece Puzzle

 Electricity for lighting is generated using a gas-fired combined heat and power (CHP) unit, which can generate heat and electricity at the same time. Ter Laak will still have some gas reserves until 2024 but will need to purchase some gas on the day-ahead market. “We want to avoid doing the latter as much as possible, since day-ahead prices are high. That’s why we’re taking a critical approach to our growing strategy. The incubation phase now involves less lighting and a bit less heating. As far as possible, we feed the power we generate from our CHPs back into the grid, preferably at times when electricity prices are high. All these factors mean it’s a question of monitoring, taking action, and adjusting.”

The company is also closely monitoring its production planning, as it wants to be able to continue supplying its customers and have sufficient stocks at key times such as Valentine’s Day and Mother’s Day. “It’s a thousand-piece puzzle. To be sure all the pieces fit, we schedule regular meetings between the board, management team, and growing team.”

The Regulation Bottleneck

 Richard Ter Laak is confident that his company will get through the energy crisis. However, he stresses the need to always look ahead and pursue sustainability. “We want to be completely fossil fuel-free by 2030. That ambition is about more than just freeing ourselves from erratic energy prices; it’s also about the social responsibility we must live up to. Our plan is multifaceted and involves investing geothermal energy and starting to using green electricity. One thing holding us back is the SDE subsidy for geothermal projects, which is linked to the price of natural gas. So, right now, that subsidy is zero. At the same time, you pay a huge amount of tax on the power you buy. Current regulations are a significant hindrance; they’re actually blocking sustainability.”

Even with all these challenges, Richard Ter Laak is positive about the future for ornamentals growers in western Europe. “We have so much drive, knowledge, and experience that we should be able to make our sector future-proof, especially if we tackle the challenges together as growers, ideally at area level. This goes beyond issues related to energy and also concerns water supply and so on.”

Sights Set on the Goal

 Lastly, Richard explains how the ‘changing world’ has a huge impact on his day-to-day operations. “As I mentioned, it’s a question of being flexible and making changes. Although I’ve always tried to think long-term, I do that now more than ever. I strive to keep my sights set on the goal and work toward it. That could be investing in sustainability, or looking for ways to further reduce our use of plant protection products. We need to do this if we’re going to keep the public on board.”

The grower acknowledges that this poses quite a challenge, but mentions that growing without using common plant protection products also requires a mindset change among retailers and consumers alike. “They have to be willing to accept that produce may have the occasional spot or minor damage.”

More Challenging Playing Field

 Ter Laak is also focusing on ensuring an efficient, well-organized business and a motivated team. “This is crucial if our company is going to become and remain future-proof. That’s why we’ve invested heavily in the business in recent years. We’ve got a strong board and management team to keep things in balance. We can weather those heavy storms. And, of course, we want to continue delivering top-quality plants – nothing is more important than that. All in all, the playing field in the ornamental sector has always been tough, but it’s become even more challenging in the past year.”

Phalaenopsis grower Richard Ter Laak