The fresh cut flower industry is a dynamic, fast-growing industry. The origin of production, product varieties, production techniques, retailing arrangements, and markets are undergoing continuous change. This challenges the adaptive ability of the elements involved. Today, producers try to remain ahead through innovation and diversification and by increasing productivity.
Overview of this Global Market
The fresh cut flower trade runs at a global level. For over 200 years, the Netherlands is the center of the global trade in cut flowers. Today, the global market of cut flowers is running on a large scale and is increasing day by day. In the United States alone, the industry of ornamental flowers and cut flowers was worth 1.3 billion pounds in 2018. Around 90 percent of these cut flowers are imported, where the vast majority of them come from the Netherlands.
Meeting the demand for flowers in the world involves a delicately balanced and intricate supply chain of farmers, workers, airlines, wholesalers, cargo ships, florists, traders, and supermarkets. It is quite a daunting technological feat to get a delicate bunch of flowers from one continent to the other without them being wilted or crushed.
Cut flowers need to be quickly transported with a cold-chain that involves a range of refrigerated facilities on lorries, farms, boats, and planes. This cold-chain puts these flowers into the dormant state so that they remain fresh. This enables a quick transfer from farms to shops within 24-48 hours if transporting by plane.
The biggest consumers of fresh cut flowers are the US and the EU. However, the biggest exporters and growers are the Netherlands, Colombia, Ethiopia, Ecuador, and Kenya. The most popular flowers are chrysanthemums, roses, and carnations.
In the United Kingdom, 80 percent of the cut flowers arrive from the Netherlands. Also, a significant proportion comes from Kenya. Several Kenyan flowers arrive straight from Nairobi to the United Kingdom on direct flights, where whole terminals at specific airports are devoted to flights carrying blooms.
In particular, Kenya is an important source of roses. The country exports one-third of all the roses sold in the EU. In Kenya, cut flowers are the second-largest export after tea, which contributes about 1 percent of the GDP of Kenya. These flowers are even one of the largest sources of employment in the country, having 100,000 citizens working in the flower industry directly and around two million indirectly.
Conditions that Affect Fresh Cut Flower Trade
Despite significant barriers to entry like the requirement of capital, infrastructure, and know-how to name some, the fresh cut flower industry is attracting new entrants continuously. Ecuador, Zimbabwe, and Kenya are the rapidly growing exporters to their new competitors in India, China, Malaysia, the Republic of Korea, Mexico, South Africa, and many more.
The successful growing of flowers needs various elements like great physical conditions, such as abundant water, good climate, clean soil, and high light intensity, appropriate planting material and seeds, productive labor, expertise in planting techniques, capital, good organization and management, infrastructure, heating energy, pesticides, other chemicals, and good knowledge of post-harvesting chain.
The established non-European flower suppliers are blessed with favorable natural weather conditions but they are quite far from the main North American and European markets. Flowers are highly perishable items. Yet the efficiency level that they achieve in this industry is such that these suppliers despite various logistical problems do better and can compete with several European suppliers who are much nearer to the principal markets.
Flowers are really sensitive to the process that they undergo once they have been cut. To deliver an attractive item to the market, strict control of temperature, air quality, and humidity are essential. Growers heavily rely on an effectual post-harvest chain of storage, transport, and handlers. Indeed, if there is no ‘cold-chain’ process, it is quite impossible even for the most efficient suppliers to trade their produce on the main markets.
Thus, organization is the only key to success in this global market. That’s why countries like Kenya and Colombia, who have no ample domestic market of their own, managed to get remarkable production growth and rank among the top flower exporters in the world.
In the fresh cut flower trade, pricing could be affected by problems associated with weather that affects growers in a particular region, and by supply and demand challenges. There is a huge demand of fresh cut flowers on celebrations like Mother’s Day, Thanksgiving, birthdays, and more. The pricing of fresh cut flowers is even affected by hikes in transportation and fuel costs. So, all of these significant factors determine the success of a florist.
Consumption of Flowers
Carnations and roses are the chief traded products, with the share of the latter mounting steadily and staggering for carnations. New entrants into the fresh cut flower trade concentrate more on the rose. Today, consumers buy flowers for different reasons, as a gift for special days like Valentine’s Day, Mother’s Days, Thanksgiving, or birthdays, for funerals, weddings, and for their own use to brighten up their homes. Out of these, giving them as gifts is the most stated reason to buy flowers.
The preferences of flowers differ by country markedly. While roses remain the most popular flower, mixed bouquets are also gaining popularity everywhere. In Italy and the United Kingdom, carnations are the most popular fresh cut flower.
At the retail level, fresh cut flowers are being sold through various outlets, including garden centers, traditional florists, market vendors, street vendors, and supermarkets. The number of florist supermarkets has increased and so the quality of the fresh cut flower for sale.
The fresh cut flower trade is in a state of flux, where drastic changes keep on happening underneath the slow growth of global sales. New markets like Russia emerge and almost disappear overnight. At the same time, new exporting countries like Kenya, Ecuador emerge to discover that other countries like the Republic of Korea, China, and India are pushing hard for becoming the next generation of established emerging exporters. Thus, competition in the global flower industry looks likely to turn more intense and more international.