Counter positions on Floral Board

[Williee Armellini]

Comments about Floral Board.

Hope you all are doing well.  Pat and I have reflected on Charlie’s “open letter” and are taking the liberty of sharing our thoughts.   We believe Charlie articulates some very good reasons to be skeptical about an industry marketing order.  Mayesh does not support this effort for the reasons below, some of which are part of Charlie’s paper:

 

• Unlike other ag commodities supported by marketing orders, our industry already has highly recognized national consumer brands (FTD, 800, Teleflora, etc.) and thousands of important local retail brands who are actively marketing flowers to the end consumer, differentiating their brands and working to promote flowers.   Unlike the brandless commodities supported by previous orders, flowers benefit currently from hundreds of millions of dollars (likely $500 – $700 million) in existing advertising and promotion investments.    A marketing order of $19 million would be immaterial relative to what is already being spent.   And this does not even address the untold amount of dollars represented by magazine, television, film and social media images featuring our products every day, representing many billions of “consumer impressions”.    This is very different than a commodity like avocados that literally went from Zero advertising to $50 million or so, the moment their marketing order began.
• As Charlie notes, there are many marketing orders that have not been effective, even those with substantial dollars invested.
• The study referenced in Charlie’s Open Letter indicates that the $9.3 million (2021 Dollars) test performed 20 years ago represented a mere 9% of the country’s population (at most).  One would need $100+ million in promotion to replicate that program nationally.   And it really provided NO indication that lasting increases in demand would result from this investment.
• There is no evidence to suggest that benefits (should there be any at all) would be spread evenly across channels.  If benefits fall unevenly, one segment of the industry could subsidize a competitive channel.
• There seems be a belief among some advocates that we can all simply pass the costs of a marketing order on to our customers.   Why do we believe this?  Is there any evidence?  Can we all just pass any and all costs, no matter what they are and how large they are to our customers?    We do not believe so.

• The cost associated with a marketing order may well represent a small portion of our revenue.   But we believe the costs should be measured as a percent of our existing marketing budgets or more importantly against our profits.   Looking at the “investment” in this manner makes the rationale very difficult to justify, especially in light of the prior points in this email and the highly speculative nature of the project.

• Mayesh is as committed as any company in the industry to marketing.   Our investments have been substantial for many years and we are confident that our marketing efforts have advanced the cause of our industry, not just our company.  We will continue to make these investments.   We do not believe a committee will have the ability to invest our dollars more effectively than we can invest them ourselves.

Mayesh enthusiastically supports our many industry associations and collective initiatives.   We believe the motivations driving interest in a marketing order are sound.  We simply don’t believe that it is in our interest or the industry’s interest to pursue the marketing order.

Ben Powell, President

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