ABOVE ALL FLOWERS

By David Kaplan aka “Floradamus”

Are you wondering if you should really trust this Floradamus man?

Let’s take a look at the first article that Floradamus published in October 2010 on Flowers & Cents, and see what’s happened since then.

Changes and Challenges for the Flower Business for 2011

THEN: As most of the Flowers & Cents contributors and readers can tell, the flower industry is currently in a great deal of flux, turmoil, and some scandal for lots of reasons. 

NOW: Mostly true but with less scandal.  

THEN: For the first time a major recession has had a great impact on what used to be viewed as a recession proof business. 

NOW: No recession, and hopefully one does not come! 

THEN: World economic conditions now impact North America more than ever. 

NOW: Even more true today!

THEN: Some of these reasons go back to the problems of the USA Floral and Dole purchases and eventual sales. (All at discount prices)  Not to mention outside capital propping up the industry such as AIG. 

NOW: We are definitely in an age of mergers and acquisitions at the retail, wholesaler, importer, and grower level. 

THEN: In many cases we have been left with a fragmented and challenged industry that does not always work logically in the economic sense.

Exchange rates, which used to be a profit center for farms have now forced many growers to reconsider why they are even in the flower business. 

NOW: Exchange rates continue to rattle growers especially from Colombia where rates have dropped to the 3700 and change rates per dollar in November of 2025 from the 4500 rate in April of 2025.  

THEN: Bankruptcy is pushing many farms out. Some of the surviving farms are cutting corners that result in less than stellar quality. Weather issues have also been a major factor in resulting in lower productivity in Central and South America not to mention the massive storms the United States had during Valentines.

Breeders are avoiding markets that are becoming more and more financially challenged. Many breeders cannot collect royalties due to the large amount of farms that are under financial protection. Only a small percentage of Colombian growers are planting new varieties and maintaining their farms in a manner that will produce high quality product. These are the growers you must support in order to see the business stay viable. The old constant over supply may become a thing of the past.

THEN: Airlines are challenged as well. Volumes and schedules have been off as they find other commodities in other locations are willing to pay more per kilo than flowers. 

NOW: Freight rates have recently increased to the states from South America and for many airlines other markets have recently become more appealing. 

THEN: We all agree (as many posters comment) how essential the cold chain is.

THEN AND NOW: So what does the future need for future success at all levels? 

THEN: We have to analyze the current distribution network and make it more efficient. In this last recession all kinds of businesses restructured the way they operate. This is often painful in the short term, but if we do not fix the inefficiencies the flower business will shrink to a model that only appeals to a small percentage of the population. 

NOW: We continue to improve this but lots of work still needs to be done!

THEN: The Flower Industry was “fat” at all ends for many years in the last century. Growers made money – even with latent over production. Distributors and wholesalers made money – even with costly physical structures, extremely high overhead, and inefficient models. 

NOW: It’s very hard to make this happen today with inflation and the labor market.

THEN: What do we have to do to restore the Gleam back to Flower Industry? NOW: Great question!

1) Become more efficient at all levels   NOW: Still very true

2) Shorten the “distance between producers and end users” NOW: This is happening more and more. Increase education to buyers with hands-on interaction  NOW: This needs to happen more.

3) Everyone has to realize that in the long-term it is better to give producers a fair return that allows the farm a chance at survival and provides its owners with an investment that makes sense and is practical. NOW: This still needs to happen to keep a level playing field.

4) Revisit how flowers are sold throughout the chain and fix inefficiencies, reduce overhead, allow the industry to grow, NOW: Again, this must happen continuously.

5) Reduce the high cost of distribution with better logistics, technology, and packaging-old fashioned distribution at the grower and some wholesale levels has to be reinvented. NOW: Continue to become a more sustainable industry.

6) Retailers as well as mass markets need to be more committed to handling quality product and varieties. This will keep their customers coming regularly rather than being disappointed on occasional events. NOW: This is happening as the variety of novelties and high quality flowers continues to increase.

THEN: It is not just the grower or the buyer that has led the market to evolve to today’s state.

All sides have been guilty to some degree. We have to have an industry that allows all sides to win. 

NOW: A win-win has to be the way, including for the consumer.

THEN: Retailers are squeezed more and more everyday. 

NOW: This continues, just check how many retailers have closed in the last 15 years. 

THEN: The percentages they pay order gathers and “wire services” keep increasing. This results in the consumer being provided with less value because the retailer cannot make money without skimping. So less repeat business and a declining market for everybody in the chain.

Everyone can see the numbers of how many fewer retailers there are now as compared to 10 years ago. Many retailers also have issues that are unrelated to the flower business as well. The current residential and commercial real estate market makes it extremely challenging for retailers to downsize their physical location if they own their building because they cannot afford to take the hit. Declining business has resulted in many retailers being in a building too large for their needs. Some foreclosures have resulted from this economic dilemma.

Many wholesalers have structures that only work when they pay low prices and are able to make large margins. Many distributors have large overheads and have to pass these costs on. The current situation is starting to unravel as we read on Flowers & Cents about all the changes and some scandals. Some wholesalers are closing or selling because they are finding it difficult to make money and collect money. 

NOW: Today with ACH and credit cards collection should be a non-starter and collecting money should not be an issue.  

THEN: Some distributors are downsizing and moving into more economical warehouses in order to be able to survive. 

NOW: Another reason why we are seeing wholesalers buying a location in a city they may have a location already.

THEN: Growers are able to get better prices by shipping to other world markets (some times much higher). 

NOW: This continues today sometimes due to exchange rates, freight rates and market conditions. 

THEN: Some of these markets pay almost immediately while others have very little credit risks. North American markets have to become more appealing or we will become a secondary market in the supply chain. 

NOW: With Russia and Ukraine, North America became more attractive but as Europe and Asia’s economy strengthened we are seeing more competition.

THEN: As some of the posters have pointed out recently that most farms cannot live on the large low-end mass market and big box pricing models. In some cases this downward squeezing has driven out some supply and distributors. 

NOW: With costs increasing, mass market pricing has risen but is still much cheaper than traditional retail. Often florists are using some mass markets to buy certain colors and items instead of purchasing from their usual wholesaler.

THEN: High quality mass markets with good customers counts are providing farms with good returns and volumes. Innovative products in all forms have attracted a large segment of the buying public to these stores. 

NOW: For example, no one would believe the amount of items like dahlias, garden roses, and peonies being sold at the mass market level now.

THEN: I will leave the subject of e-commerce for another editorial. 

NOW: E-commerce has grown immensely in the last 15 years.

THEN: To summarize:

This industry has to get more and more efficient. 

NOW: Yup, this is happening through technology and will continue more with the evolution of AI. 

THEN: General Motors knew what it was doing wrong for many years. It took a crisis for them to eliminate brands and downsize. They knew if they did not change they would disappear. Fix the flower model or it will become a bigger problem in the future! 

NOW: A lot still holds true for that statement. 

NOW: I leave everyone with one thought. Will history repeat itself like it did very early in the 2000’s and the large consolidations fall apart like Dole and USA Flora or will they be incredibly successful and continue to grow?

See you in the future,

Floradamus

For more on the economy, logistics, inflation, and more, see The Wizard’s Wand News!

To contact Floradamus through Above All Flowers 

Email: aboveallflowers@mac.com

Call: 401-486-0525