FloraHolland is going through a turbulent period, with a reorganization on the way as market dynamics shift in favor of direct trade. The Dutch flower auction is drafting a strategy plan for the year 2020, to help figure out its own role and cope with its falling revenues
The annual turnover of the Royal FloraHolland Flower Auction Cooperative for 2013 still amounts to €4.5 billion: an increase of 1.8% over the past year. However, with a volume decrease from 12.5 to 12.4 billion units of flowers and plants bought and sold, that increase was primarily due to an increase in average price.
The FloraHolland company itself booked a loss of €7.4 million in 2013. This loss was the result of a sudden change in the sales method: with growers increasingly opting for direct sales rather than clock sales, auction revenue dropped. Regular business operations were unable to sufficiently cover this loss and FloraHolland therefore implemented a reorganization.
The costs of said reform – which includes changes to costs, services, staff and organization – were approximately €22 million. An appeal was made to the members of FloraHolland to cover these costs, allowing the company to maintain its financial health. Meanwhile, the bankruptcies of two large traders in early 2013 also had a negative impact on the results and land was devalued by €10 million.
FloraHolland has now hired a consultancy company and launched ‘FloraHolland 2020’, in an attempt to figure out and explain, to customers as well as members, where the manifold changes are heading and what that will mean for the auction in the future.