"We're back at 90% of our normal volume", says Marco van Zijverden, CEO of Dutch Flower Group (DFG). With 33 individual companies, they supply flowers and plants to all distribution channels, importing wholesalers and the large-scale retail sector all over the world, and when looking at the past, present and future of the COVID-19 crisis, they notice that the flower industry is picking up quite quickly, with a current peak in online floral sales, he explained during the PMA Virtual Town Hall meeting* yesterday.
Marco van Zijverden.
From Covid-19 outbreak till now
After China, several other important export countries for DFG, like Germany, the UK, Italy and Switzerland went into lockdown mid-March. It had a major impact on the floral industry, with 50% of the auction volume being destroyed on March 16. Fortunately, over the last weeks, more and more countries opened up a bit and are now open or partly open for trade, and DFG's sales increased. "In China, we are again back at the volumes we were before COVID-19, and we see Switzerland, Italy, France, and Spain picking up slowly, and Germany faster. Also out of the US, the demand for flowers is increasing again, but airfreight restrictions and the increased cost (doubled) make it challenging to ship the flowers from the Netherlands to there. The same goes for Kenya, where only 25% of airfreight is available. This drives freight costs up and as a result the pricing of, for example, roses."
Online sales skyrocketing
In all channels, DFG is nearly back to normal volumes, except for online sales. "At garden centers, DIY stores and wholesale, we are back at 80%, mass retail at 90%, but online is about 4 to 5 times higher compared to last year. Bear in mind that online is of course still a limited part of the total business."
On the left: Let Hope Bloom campaign.
Campaigns during COVID-19
n the midst of the pandemic, DFG did not sit still, doing their utmost to keep flowers (and plants) top of mind in Europe. On March 27, they launched the campaign Let Hope Bloom together with the Flower Council of Holland, and they joined forces with breeders and growers to bring 150K bouquets to elderly people in the Netherlands on Good Friday (April 10). In the meantime, the Dutch floriculture industry was working hard to receive support from the government, and they are now receiving two ways of support, namely a labor cost compensation and an emergency fund for floriculture, he explains.
Change in assortment
Van Zijverden sees that consumers continue to buy flowers and plants. "They keep their meaning and even with a more positive impact on people." However, the assortment at the wholesale business has changed a bit in this moment of time. "As there are no events, there is less demand for the exclusive flowers and plants, but as there is more focus on home use, decoration and the garden, the mass flowers and plants are in higher demand. In turn, this is reflected in the prices: luxury flowers are currently cheaper in price and the mass flowers receive good prices, and people continue buying them."
Expectations post COVID-19
When looking at the post-COVID-19 situation, DFG expects that floral retail will keep growing at a higher pace, with “discounters” even faster than supermarkets. And as more people will stay home, it is expected that plants and flowers are in higher demand. But will there be enough flowers? That might become a question, due to the current situation at the growers.
Employment is expected to become a challenge as well. "On the one hand, unemployment will be high, but on the other hand, many labour immigrants currently have left, which leaves jobs open."
Also it is expected that companies within the floral industry will go bankrupt, but Van Zijverden stresses that those will only be the companies that weren't in a good situation before the pandemic. They expect 10% of these flower businesses to go bankrupt.
Last but not least, they expect that logistic alternative options, like seafreight, will grow. "Now, we already started to ship more flowers by sea from Colombia to the UK, but also from Kenya. And still then, after 20 to 25 days travelling, our flowers still have a guaranteed vase life of 7 days to consumers."
For more information
Dutch Flower Group
Marco van Zijverden
Email: [email protected]
www.dfg.nl
*Click here to register for the next PMA Virtual Town Hall on May 13.