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Steve France at Florismart is ending the Dutch monopoly on the flower industry using tech

Steve France at Florismart is ending the Dutch monopoly on the flower industry using tech

Upon reflection, breakfast at the The Ivy Chelsea Garden, abloom with foliage as it is, was an appropriate location to meet Steve France.

The reason it is so apt is that France is chief executive of Florismart, a platform that is challenging, and successfully diminishing, the Dutch monopoly on the cut flower trade by culling layers of bureaucracy and middlemen.

While visions of vast fields of Dutch tulips hold true, the days of the Netherlands being the world’s dominant producer have wilted, making its stranglehold on the market stranger still.

In a time past, those growing flowers needed to be within reasonable distance of consumers, for obvious reasons. But as globalisation brings us ever closer, and technology keeps the product fresher for longer, equatorial nations – where the sun shines and flowers grow more quickly – have rapidly dwarfed European output. Today there is a dynamic, global market, that is expanding rapidly.

And yet, the lion’s share of this output, in Europe at least, goes through the auction houses of Royal FloraHolland. Before they end up in your local florist, the flowers you buy have been passed through a daisy chain of businesses, each taking their cut.

Supermarket sweep

Borne from France’s former frustration – he is the founder of a major online florist, Arena Flowers – his new venture is liberating the industry.

“We were spending £100,000 a week on flowers – that’s a lot of trucks coming over every day. I just did some basic research and I was shocked at how much florists were paying for their flowers compared to us and supermarkets. And the difference is, we’re buying in bulk with great purchasing power and can negotiate good prices.”

The industry has bloomed over the last two decades. In the eighties, an average Brit would spend £8 per year on cut flowers – the number is now around £36, driven largely by the advent of supermarkets selling flowers. As a bouquet became part of the weekly shop, the industry grew to a staggering £2.2bn annually. And yet still the Netherlands dominates the trade.

“Everything goes through Amsterdam – the Dutch flower auction. Growers sell to the exporters, the exporters sell it to the wholesalers, then the wholesalers sell it to the florist. It’s bizarre that flowers go from Kenya to Holland and then through the tunnel into England, when they could just go straight to Stansted.”

Bizarre indeed. Although not as risible as British daffodils, which are exported to the Netherlands, sold at auction, and then transported back to the UK to be sold again. Florismart facilitates a direct link between grower and florist, cutting out sticky fingers and reducing costs significantly.

“The idea is to support florists to run their business better. Florists are creative people, and it’s actually the lowest paid industry in the world, certainly in Europe. So our strategy is to create a platform that helps them with everything: both buying their flowers better and, subsequently, helping them to run their business better.”

Homegrown

Interestingly, although peaking at around 10-15 per cent during summer, a paltry two per cent of flowers sold in Britain are actually British grown – a paradox Florismart is addressing.

“Of course locally grown flowers are best for the planet, but the issue is that, although the British growers want to grow everything, the supermarkets want them to grow five products and lots of it. They don’t have that abundance of different flowers. So the growers get quite frustrated with the supermarkets. It’s regular money, but it’s not very exciting.”

Conversely, and perhaps unsurprisingly, local florists need an array of produce for their arrangements, which at present they struggle to get from British growers. Florismart is trying to encourage local growers to diversify, using some very clever data.

“We spot trends: not only do we have all the growers putting their product on the platform, but we have all the exporters and florists. It gives us a lot of data on the industry. We can see price movement, and so we take data about what florists are buying and feed growers with information about what they should be growing.”

The florists also benefit from the lakes of data – in terms of trends within the industry. France says that seeing what celebrity florists are buying can help their younger counterparts better understand the trade. While his ambition is to educate using this data, it’s also a competitive asset against the Dutch monopoly.

“Growers never knew what was happening more broadly. The growers were just dealing with FloraHolland, and they have no data on the florists, because the data gets lost in the chain. So FloraHolland has no real information. All it can say is: this many flowers went to the UK, this many went to Spain. But it can’t tell you what florists did with it, what they liked, what got thrown away.”

Monopoly

France sits on the board of the British Flower Association, and tells me that Florismart has been broadly welcomed across the industry – apart from by wholesalers.

“The local wholesalers just hate us. We’re like their worse nightmare. Not only because we’re changing the market, but it’s clear that florists shouldn’t buy their flowers from a local wholesale market, it’s insane. That wholesaler has rents, it has fridges, it has staff. And florists end up paying for that.”

Although not loved by wholesalers, a quick Google search confirms the praise from both growers and florists that the platform receives.

“We’re very disruptive,” says France. “I mean, we’re shattering the industry – completely putting it on its head. The industry is currently reliant on these traders buying and selling, and in turn, those traders have become very very powerful within the chain. But actually, in this digital age you don’t need that trading anymore.”

The business is clearly a threat to FloraHolland’s monopoly – has he ever received hostility from them?

“FloraHolland follow us very closely. Actually, they bought a company called Flower Exchange just last week – they were trying to do something similar to us. A similar thing happened a couple of years ago with another company, they just buy it and shut it down immediately.”

Would France ever give in to a takeover bid? “Oh no definitely not. We’re passionate, we want to follow this through – our goal is to help florists. Selling out to FloraHolland who will just close it? …no.”

source: http://www.cityam.com/269835/steve-france-florismart-ending-dutch-monopoly-flower

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