The Changing Floriculture Industry: Fourth Edition
Executive Summary
SAF's fourth edition of The Changing Floriculture Industry: A Statistical Overview, tracks industry sales, production levels and trends for each segment of the industry. Updated and expanded in 2007, it contains more than 60 information-packed pages filed with charts, maps and tables -- twice the data of the previous edition.
A research firm would charge you thousands of dollars for a statistical overview of the floral industry containing this level of detail, but SAF members pay only $49.95 (non-member price: $499.95).
For $19.95, SAF members also can purchase a CD-ROM containing "PowerPoint(tm)-ready images of all the report's charts and graphs.
Floral Consumers by Gender (click image to view). Females comprise three-quarters of the consumers of floral products, according to the FloralTrends Consumer Tracking Study. However, when the product bought is considered, there are variations in what each gender buys. The full report contains a new chapter which presents a full profile of the floral consumer.
Floral Consumers by Life Stage (click image to view). Affluent empty nesters are the most active consumers of flowers and plants, according to industry research. They are responsible for almost 20% of consumer transactions. Which lifestyle group makes the fewest purchases of flowers and plant? Answer: DINKS – those couples with dual incomes and no kids. In the full report various demographics are examined in relation to their floral purchasing.
Holiday Occasion Purchasing by Floral Segment (click image to view). Ever wonder how the major holidays break down by floral segments purchased? Some are clearly fresh flower events, like Sweetest Day, Valentine’s Day or Bosses Day, while others are more evenly distributed like Grandparent’s Day, Mother’s Day or Halloween. The full report presents a breakdown, by floral segment, of sales by calendar and non-calendar occasions which can help you plan your purchasing and promotions.
Cut Flower Imports in Units by Year (click image to view.) Imports of fresh cut flowers are on the upswing beginning in 2002 following a three year downturn. About 3 billion units of fresh flowers were imported in 2005. In the full report, additional tables and charts display the proportion of imports versus domestic supply reflected by the major cut flowers over time.
Sales of Floriculture Crops by Year (click image to view). Domestic production of floriculture crops was valued at more than $5 billion, up 4 percent from the year before. In the full report, see how floriculture sales fared when adjusted for inflation.
The U.S. Department of Commerce's Bureau of Economic Analysis estimates the size of the floriculture industry at retail to be about $19.4 billion. Other estimates exist, the variations dependent on what is included in the "floral" category and the alternative methodologies utilized to determine value.
Typically, floriculture is defined as cut flowers, potted flowering plants, foliage plants, bedding and garden plants, cut cultivated greens and propagative materials. Floral industry sales at the retail level, depending on who is counting, also might include potting soil, seeds and related products. The per capita spending at the retail level on floral products in 2005, assuming about $19.4 billion in retail floral and plant sales, comes to about $55 a person
At the production or grower level, the industry is larger than most realize. The production value of nursery and greenhouse crops was the third largest part of crop agriculture in the United States, according to the most recent U.S. Census of Agriculture conducted in 2003 - surpassed by only corn and soybeans. This agricultural segment is larger than wheat, cotton and tobacco. Of all U.S. agriculture production (plant and animal), floriculture (nursery) plus greenhouse crops was the sixth largest agricultural segment, comprising about 7 percent of total agriculture sales. In 2005, the floriculture production segment alone contributed $5.4 billion in production value. Most retail consumer floral transactions take place at retail florist shops, supermarkets, garden centers and discount chain stores. Internet sales of floral products, particularly of fresh flower arrangements, have expanded in the past few years. Internet portals that offer a broad array of services and resources, including online shopping, in all likelihood will become increasingly significant in the future. While the industry and this report tend to focus on consumer consumption of floral products, a considerable segment of industry business occurs in the "business to business" arena. The so-called "B to B" component of the industry makes up about 15 percent to 20 percent of a retail florist's business. This includes sales to restaurants, meeting facilities, hotels, corporate functions, business client gifts, etc.
The traditional market channels of the floral industry are dynamic, in flux and are adjusting to change. For example, if a consumer uses an online search engine to research any consumer occasion, such as "weddings," along with the word "flowers," a range of sales portals appears. Those portals may be linked to growers, importers, wholesalers or retailers, all willing to sell flowers to the end buyer. Undoubtedly, this blended supply chain confuses consumers; however, these hybrid channels are among those experiencing growth because entrepreneurs and established businesses can easily enter them, utilizing the marvels of today's transportation and technology, moving this industry forward in channels never contemplated before. That is not to say that traditional floriculture market channels are outdated. The traditional grower to wholesaler to retail market channel is alive and well among many industry members. Many, if not most, of the flowers and plants consumers purchase follow this long-established path to the end user. On the other hand, these channels are changing in an effort to meet the demands of the consumer and competition in the industry. That channel shifting is affecting the floriculture industry, and some players are reacting by embracing technology to remain competitive in the midst of the changing needs and wants of consumers. They are, however, holding steady in what they do well and in those niches where they have been successful and the new competitors can't encroach, such as weddings and sympathy flowers. Much has changed since the previous edition of this report. A large rollup of retail florists failed and many of those former owners repurchased their shops. A consolidation of floral wholesalers fell apart. Many of the Internet businesses that some experts claimed were going to revolutionize how the "backward" floral industry conducted business succeeded only in going under. After each major incident, the core industry survived. Such is the nature of the floriculture industry. Since the previous edition of this report, there has been considerable consolidation at the three traditional levels; domestic growers, wholesalers and retail florists. Total sales, however, continue to climb, with survivors taking more of the sales channels and profiting from increasing average sales. Total sales at retail for the floral industry have climbed from about $18 billion in 2001 to almost $19.5 billion in 2005.
Where some lament an oversupply of product, others see a bounty of opportunity for marketing and selling. If the industry can keep flowers on the mind's of consumers, it can successfully compete with the other gifts available for special occasions and everyday use. Nearly everyone agrees the industry needs more consumers, which would allow the industry to maintain healthy margins and negate its historical tendency to compete on price, a problematic strategy that turns its most popular offerings into little more than commodities. The floriculture industry always has dealt with uncertainties, be it weather, pests or increasing costs of goods. As the supply channels change, new challenges affect how the industry conducts business. For instance, the industry today must adjust to fluctuations in the value of currencies and political changes in foreign lands, international trade agreements negotiated by the U.S. Congress, immigration issues and changing energy prices that affect delivery costs, chemicals, container prices and more. Still, this industry has weathered changes before -- hurricanes, diseases and non-traditional vendors. Many insiders and experts say it will do so again and again.
More changes loom. Businesses are cooperating to be more competitive, forming logistics coalitions and alliances, linking up to maintain quality in the transportation of flowers from farm to retailer (while maintaining the cold chain), marketing the value of flowers and plants to the consumer and educating consumers in the use of these products. Technology is being incorporated into the flow of products from point-of-sales systems to the use of global positioning systems (GPS). Where hospitals are cutting lengths of stays, florists are advertising "Get Well" flowers rather than "Hospital" flowers. As funeral services become shorter and less elaborate, florists emphasize "Sympathy" arrangements rather than "Funeral" arrangements.
Floriculture is not immune from many of the larger issues facing the nation. The worldwide green movement affects floriculture more than most industries, and yet the industry, so far, has failed to reach consensus on key points relating to that movement. Internal squabbles about definitions of "organic" or "green friendly" products only confuse the consumer, instilling doubts about the industry's products into potential buyers' heads. The declining use of pesticides and the positive changes, such as education and health care benefits, that some industry members provide to their workforces that supply fresh flowers from overseas need to be communicated to a media all too willing to hop on the bandwagon of negativity toward the floral industry. Immigration issues that affect domestic labor must be resolved, as this industry requires a predictable labor force to harvest its products.
In addition, new and exciting university research into the benefits of flowers and plants in the home and workplace is making headlines. University studies, conducted between 2000 and 2005, point to the psychological, emotional, behavioral and environmental benefits of flowers and plants. Flowers have immediate and long-term positive effects on emotional reactions, mood, social behaviors and even memory for both males and females. The presence of flowers triggers happy emotions, heightens feelings of life satisfaction and positively affects social behavior - far beyond what is normally believed. A study on the effects that flowers have on senior citizens showed benefits including better moods and improved memory. It demonstrated that flowers ease depression, inspire social networking and refresh memory as we age. In a recent empirical study on flowers in the workplace, researchers concluded that workers' idea generation, creative performance and problem-solving skills improve substantially in workplace environments that include flowers and plants. The latest study shows the importance flowers can play in home ecology. It demonstrated that people feel more compassionate toward others, have less worry and anxiety, and feel less depressed when fresh cut flowers are present in the home. And those feelings carried over to the individuals' work environment.
Many believe that as long as flowers and plants make people feel good and research enumerates additional benefits, the industry will do well. The floriculture industry is a mature, stable market. When it comes to selling emotion affordably, few products can compete. What the floral industry does well - such as making people feel good, providing customer service and catering to special life events -- it does very well. But those business owners that resist the slew of changes affecting the industry and cry out for the "good old days" may not survive. Those who react appropriately to those changes will grow and prosper.
For $19.95, SAF members also can purchase a CD-ROM containing "PowerPoint(tm)-ready images of all the report's charts and graphs. )+',top='+(screen.availHeight/2-(271/2))+',width='+(300+10)+',height='+(271+75)+'');)
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