12 A sea of flowers at 2011 Pack Trials - Floraculture International

Floral wholesale
are mainly targeting Europe, but
Florimex Ecuador, in addition to
their trade flows to Europe, has
kept strong business relations with
the USA and Canada.”
Challenges
All floral wholesale companies are
more or less facing the same challenges,
says Mr Falk.
“Florimex’ follows a customer-driven
strategy. It’s the customer’s wish
to see where the product originates
from. The same customer decides
which intermediary will take care
of storage and transport. Margins
are under pressure; new competitors
are entering the market with
lower cost structures. The economic
crisis has caused a significant drop
in flower and plant sales over the
last years.”
According to Florimex’ CFO,
the future belongs to companies
which are able to professionalise
and to meet the growing customer
demand for guiding and advice
as many large retail chains are not
really familiar with the flower and
plant business. “This means you
need to have very reliable and open
contact with your customers and
only then will they allow you to
take care of this specific type of
business. When new retail chain
such as DIY stores set up a flowers
and plants sales division, we can
teach them a lot. What you really
need is a team of professional employees
in a professional wholesale
company.”
In search of the necessary product
information, an increasing number
of supermarkets are contacting
the grower directly. “They want to
speak with the product specialist of
the nursery level.”
Germany as
economic engine
The year 2010 showed improving
sales especially in Germany. “We
experienced a strong growth in
the beginning of this year and we
expect further growth for the rest
of 2011. Germany is considered
as the economic engine for floral
consumption in Europe. Nobody
can tell if the reported growth
in Germany will be structural.
Germany has a strong tradition in
manufacturing, providing a strong
base for the present growth.”
When asked about the future, Falk
foresees a further diminishing in
the number of flower and plant
wholesalers. “Luckily, we have
witnessed only few bankruptcies.
Blumex was the first really
huge floral wholesaler to collapse I
expect further consolidation of the
business, with more increased cooperation
and mergers. Something of
which we should be more aware is
that our industry hasn’t gained a
good reputation amongst bankers.
They often consider the risks
too high and banks are extremely
careful. Cash flow in our industry
represents a problem. On the sales
side, we have to take enormous
debtor’s risks and on the purchasing
side, the auction forces us to pay
at once. Wholesalers are the biggest
clients at the auction, but our
mutual relation needs to change. In
future, we would like to become
a real partner of the auction and
not just one of their many clients.
While the auction should remain
focused on sourcing, the wholesale
business has to concentrate on sales.
At Veiling Holambra in Brazil,the
auction started in banking to
finance trade and give support to
their customers. Perhaps, also here
in Holland, the auction should step
into these activities to keep a strong
network of sales companies.”
Moderately optimistic
Falk is moderately optimistic about
the future “I hope we can achieve a
more structural growth in the years
to come.”
Consolidation of the business is
set to be an ongoing process, both
on the growers and the traders’side.
Falk concludes, “No more than a
hand full of large trading houses
will survive along with some
smaller-sizes companies specialised
in niche markets. Also Ciccolella is
on its way to become an important
player in the market. For Florimex
too, a good future lies ahead. Our
major shareholder, however, at
some point will exit and therefore,
there will always remain uncertainty
about who comes next!” |||
June 2011 | www.FloraCultureInternational.com 23