"2024 was generally a smooth year for us, but we expect 2025 to be full of more challenges", explains Ben van Wingerden of Color Orchids. The company, which recently became the largest orchid supplier in the U.S., now operates 25 acres of orchid propagation across three locations. In this article, he discusses the state of the U.S. orchid market, the growing challenge of seasonal demand, and the obstacles ahead, including the anticipated impact of the tariffs.
© Color OrchidsBen, his wife Catherine, and their family in the Texas greenhouse.
U.S. orchid market
Orchids continue to be the number one potted plant in the U.S. Founded in 2011, Color Orchids has established itself as a key player in the domestic orchid market, specializing in the cultivation of Phalaenopsis orchids in various pot sizes. Recently, they even became US largest orchid supplier as they acquired Floricultura Pacific earlier this month. When looking at the orchid market, the dynamics have remained relatively stable over the past decade, van Wingerden explains. "The supply is very consistent because few, if any, new growers enter the market and many suppliers have stopped for various reasons. It's not a high margin crop and the investment to start is so large that the barrier to entry is quite substantial."
Demand becoming more seasonal
Van Wingerden notes that the demand for orchids is becoming more seasonal, leading to several challenges. "There is oversupply during summer and fall. This is a challenge for a number of reasons. It is very difficult to peak with orchids because of the 2 year growth time. Growers who fail to peak are selling orchids cheap during the summer and fall which pushes the price of orchids down. The best way to tackle this problem is to reorganize your business to produce more when the demand is higher and less during the off season."
© Color OrchidsPlants at Floricultura Pacific.
Market preferences
Is there a particular orchid in high demand? "The demand for different pot sizes within the Phalaenopsis category is fickle. This changes based on what's happening in the economy or buyer's preferences or directives from the powers that be from the customers. In some ways, the assortment hasn't changed at all if you look at the past decade. It's possible to say that the smaller pot sizes are increasing in numbers but then we also see increased demand on the higher end for larger orchids and gardens. Also one of the beauties of orchids, they cover a wide range of retails."
Preparing for Mother's Day
Mother's Day is the most important day for orchid sales, and Color Orchids is no exception, Van Wingerden emphasizes. "As demand for orchids peaks around this holiday, meeting production and packing demands becomes a significant challenge. To ensure sufficient staffing for packing operations, the company must attract additional employees well in advance." Orchids are a two-year crop, so Color Orchids is always focused not only on the upcoming Mother's Day but also on those for the following years. "The nature of orchids means that we must plan ahead for several seasons at once, which makes staffing and logistics even more crucial."
© Color OrchidsWhite orchids in the Texas greenhouse.
Strategic growth and acquisition benefits
Color Orchids recently acquired Floricultura Pacific and according to Van Wingerden, it brings significant advantages to the company. "There are many advantages for Color Orchids but the most substantial is that the company suddenly doubles its knowledge and begins to focus on the exact same goal. Floricultura Pacific is an excellent grower and very efficient. This makes Color Orchids an even better grower. It's a big step forward to becoming the low cost producer in the US with the highest quality orchids. Color Orchids will continue to expand. We will leverage our increased bargaining power from the acquisition to lower costs to avoid price increases so we can become increasingly more competitive. The retailers will put significant pressure on the growers to fight inflation and that pressure will just keep traveling down the chain."
2025 will be full of more challenges
Whereas 2024 was generally a smooth year for Color Orchids, Van Wingerden expects 2025 to be full of more challenges. "The tariffs and other unknowns will keep us on our toes. I think the biggest challenge will be to keep prices down despite what's happening on the supply side."
For more information:
Color Orchids Inc.
info@colororchids.com
https://colororchids.com/