We first published our What Price Flowers feature back in March ’21. Since then, things haven’t got better but in some cases worse as Weddings around the world came back in force and pushed a struggling market yet further.
Weather has been horrendous everywhere … even in the UK growers are struggling … and according to the experts we talk to on a regular basis it isn’t going to get better any time soon.
Yes, you will always find a cheaper price on some lines in some weeks but overall, the market is expected to remain tight.
Indeed, in one week alone Royal FloraHolland, the world's biggest flower auction, reported a 53.2% rise in prices, we’ve heard of florists paying over £6 a stem for Delphinium and to get a white rose was like finding hens teeth … the fact it cost double and triple was a minor detail … at least you had some!!
We look at the reasons behind the rises to discover why ‘saying it with flowers’ will continue to be a more costly affair, the dramatic impact Covid-19 has had on prices around the world since the pandemic started and what you need to know and do to protect yourself.
Headline reasons for price increases
Drastically reduced flower production due to Covid.
Too many buyers – too few flowers.
Poor weather conditions around the world causing shortfalls that can’t be replaced quickly.
Price increase on sundries due to higher manufacturing costs incurred by social distancing/reduced staffing levels.
Price increases on fuel has a direct impact on growers reliant on artificial heat and light
Lack of freight space with shipping costs doubling and tripling in price.
The shortage of HGV is a global problem and there simply aren’t enough to move product around so charges are rising
Brexit paperwork – small by comparison to above but another cost.
The facts behind the figures
As with any commodity supply and demand has always played a role in flower pricing:
In the last 18 months that has been made far, far worse due to Covid and the global impact on the flower growing world.
As a result, flower prices have been rising throughout the world and impacted on every florist and flower vendor, wherever they are. Even the biggest buyers are paying more.
How it began?
13th March 2020 saw the Dutch auction crash for the first time in its history. As the world came to a standstill, retailers, supermarkets, and wholesalers stopped buying flowers and plants and so HUGE quantities were destroyed at a cost to growers who must pay the auction even if a product does not sell.
As lockdown took hold around the world, the UK was the last country standing and in that final week of ‘normality’ was the only buyer in field. Supplies were touch and go as no one was sure if deliveries would or could be made out of Holland but despite some of the most stressful days in flower industry history, they did and in the main every mother received their flowers.
However, seeing the pictures of mass destruction in Holland, understandably growers around the world feared the worse and, given there was no way of knowing how long the situation would last, many took immediate pre-emptive action.
Some growers simply destroyed their crops and laid off workers where they could. Other growers put their greenhouses into hibernation, again in an effort to protect themselves from further losses. For the next three months supplies were erratic to say the least.
Where we are now
Since March 2020 the return to full production has been very slow and the world is still nowhere near back to normal supply levels.
Growers have either not had the confidence to grow in the same quantity, physically can’t grow because Mother Nature requires more time or, in the case of countries like Colombia, Ecuador, Kenya, the ability to ship product isn’t the same as there hasn’t been enough freight space; many flowers are shipped as belly fillers on passenger flights and there haven’t been many of those due to Covid!
In addition, in the first, always more expensive, first quarter (see note 1) weather impacted on all major growing areas adding to the ongoing problem; for example, in the UK 1.5 million tulips from one British grower didn’t happen because it was too cold, growers in Holland lost crops due to snow destroying greenhouses, and whilst Colombia and Kenya had good conditions, Ecuador saw production slow due to inclement conditions … they also had snow in early September which is unheard of and the weather in Kenya recently hasn’t been right either. The knock-on effect has been huge!!
At the same time and since those early days of the pandemic, the global flower industry has seen an unprecedented demand for its product as families and friends used floral gifts to connect with each other when they couldn’t physically be together.
That interest in flowers has not disappeared. It may have dropped off slightly but having got used to flowers, consumers are still buying a lot of them whilst plant sales have never been better.
Demand has consistently outstripped supply and prices are risen everywhere, not just in the UK. As the #1 producing country, The Netherlands supplies flowers around the globe and so every buyer in the world is feeling the pain.
What price Brexit?
Whilst Brexit has and will add to costs for UK buyers, particularly in relation to additional paperwork, the true price is not known yet.
One wholesaler has told us it is a penny a stem, some Dutch wholesalers started adding an arbitrary 10% surcharge to invoices to cover costs from January 2nd (which could be less than a penny a stem) whilst other Dutch companies are still working it out given the many changes that have been going on in terms of dates and expectations.
So, whilst we hate being wishy-washy it’s hard to give a precise position at this stage.
Our feeling is that the full impact will not and cannot be known or felt until the full process comes into play – delayed yet again and now scheduled for July 2022 - and a full understanding of the system is clear.
Only when all companies find their feet, learn new systems and the inspection process comes into full effect in will it be possible to say what the true cost of Brexit is, if any, given there are alternatives!
However please read this article as well to make sure you are fulfilling all your obligations FLOWER INSPECTIONS & PAPERWORK DELAYED. What about Plants
Sales continue to be amazing …. the garden centre association is reporting a 50.42% rise in 2020 and it shows no signs of abating.
The RHS Chelsea Flower Show had a first time ‘street’ of houseplant installations and the interest was immense whilst big name garden centre Dobbies are now opening ‘Little Dobbies’ in trendy high street locations.
Therefore, whilst the whole process of buying plants has settled down in terms of availability and price you still need to be market savvy to make sure you both keep up with trends and pricing.
In terms of record keeping as long as your supplier puts their Plant Passport number on the invoice florists are fine given they have to keep all records for 6 years anyway.
Will prices go down?
We wish we had a decent crystal ball but word on the street is that whilst there may be some adjustments and there will always be product that can be swapped in, in general higher prices are here to stay for the foreseeable future … especially as we gear up to the next round of peaks.
The weather continues to play havoc with supplies and big chains, especially in the US, have pre-bought entire crops for 2022 so there is already a squeeze on supplies and given growers simply can’t add production overnight the tight market is expected to carry on.
As such we would rather say ‘No they won’t’ than give you false hope
What can I do?
As we have been saying for months you MUST revisit your mixes and pricing policies and look at alternative suppliers as simply cutting the margin/markup is not the solution.
In the UK the minimum wage has already gone up, costs in other areas are rising as well and you need to be sure everything you do is profitable.
NOW is the time to review, re-price and re-design your ranges to make sure it makes you money and always push ‘Florist Choice’ rather than guaranteeing a specific mix. Explain to customers why things are different and pretty much all of them will appreciate your advice and helping them get the best value.
Change your buying habits
Since the Brexit changes first took place one of the most dramatic changes was the 8% tax levied on 3rd world sourced flowers sold via Dutch suppliers … for example South American roses, Israeli flowers, and foliage’s etc
Remember though that 8% DOES NOT apply to anything grown in Holland/EU countries nor product grown in 3rd countries that are shipped directly to the UK. Even if they are 'in transit’ - be that via Schiphol, Madrid or Frankfurt etc – they should be tariff-free under agreements already made.
Only if they go through a Dutch clearing system/are sold on should that tariff be applicable under the country-of-origin rule and therefore it should not be automatically added.
However, there are alternative sources. South America/Kenyan/Israeli products have always been brought into the UK directly which means many UK based cash and carry wholesalers are able to sell these key lines at a zero-tariff price and often cheaper than a Dutch grown equivalent.
That said, and to get the full basket of flowers and choice required by consumers, florists around the world need the Dutch grown range because it is so wide.
As such – and given only having one or two suppliers isn’t always a good move - UK florists need to factor this in over and above all the other price rises and decide if they should be splitting their buying across a number of suppliers – i.e., a mix of Dutch and UK based suppliers to get the best prices.
Put your prices up
We know it’s hard but our final advice would be
1: Never be afraid to put your prices up … you are not running a business to lose money
2: Never try to compete with the supermarkets … as a small independent you can’t
Remember, as our friend Claire Mitchell says, “One person’s ‘How Much!!!’ is another person’s ‘is that all?’” … make sure they are your customers not the ones that want everything for nothing.
** Why the 1st Quarter is so hairy!!
The first quarter of every year is a higher price time for flowers because it contains three peaks., Christmas, Valentine’s, and Mother’s Day. In addition, International Women’s Day is becoming increasingly important as a flower-giving day and that adds to the pressure.
Russia is one of the biggest buyers for this celebration and in 2021 took a large proportion of the flower capacity. With just 3 weeks between IWD and UK Mother’s Day 2022 (ours is determined by the Church Calendar and Holy Week which is why it moves around so much) there is only a short time for another flower flush, so supplies may well be under pressure.
