Cultivating Business

Exhibition, Growers, NEWS, plants, Trade Fair, USATags: flowersOctober 19, 2018

Cultivating Business

The largest floriculture event on the North American calendar was Cultivate’18, held July 14-17 in Columbus, Ohio.

A smallish city in an idyllic Midwestern state, Columbus is within easy reach (600 miles) of 60% of the U.S. population. And attendees can easily visit growers, retailers, manufacturers and distributors in Ohio, Michigan, Pennsylvania, Indiana and Illinois—some of America’s most important floriculture production states.

But while it is a North America-centric event, Cultivate’18 is the most international of U.S. horticulture shows, with 136 of the 650 exhibitors (20%) coming from some 18 other countries. That is reflected in the size of the Netherlands reception on Sunday evening, where at least 100 Dutch attendees and exhibitors met with representatives of the Dutch embassy, including new Agricultural Counselor Marianne Vaes. (pi1), here discussing trade with Jorg Swagemakers of van Krimpen b.v. (Photo by Caroline Feitel of the Dutch Embassy in Washington, DC). South Korean companies had a large presence along the 3400 and 3500 aisles.

Labor shortage solutions

The most-talked-about topic this year? Labor—namely, the lack of it. To help address the labor shortage, equipment manufacturers were showcasing automated solutions—both those that could do the work or those that could make workers more efficient. Cutting sticking remains of great interest; both AutoStix and ISO Group showed off their URC-sticking technology.

RootOStix

Israeli propagator Hishtil (2) showed their own version of an AutoStix-compatible product called RootOStix. It is unique in that it is for rooted cuttings, not URCs. Their packaging technology allows for the shipping of bare-root cuttings, with no substrate, to comply with any phytosanitary rules. Another plus: it eliminates the rooting process. Eventually, it could eliminate an entire step in the production process: the rooting station. www.hishtil.com

Blending your own potting mix

Small growers are being offered tools that let them operate like a large grower. Bouldin & Lawson’s new Low-Profile Incorporator (3) lets a smaller business blend its own potting mix 2 or 4 cubic meters at a time. It can feed any tray or pot filler, and its low height makes it easy to keep loaded with raw materials. www.bouldinlawson.com

Cannabis

Cannabis, either medicinal or recreational or both, is now legal in 23 U.S. states, and many traditional flower growers are exploring the business or are involved in it. That was reflected on the show floor, where we spotted quite a few cannabis-related business and products, most of which were standard equipment, such as structures and LED lighting.

Dehumidification solutions

DryGair Energies Ltd. was established in 2010 in order to design, develop and market an efficient and environment-friendly dehumidification solution to the humidity problem in greenhouses. Working withVolcani Center – ARO (Israel’s Agricultural Research Organization), DryGair Energies developed the DryGair dehumidifiers’ concept which helps reduce the grower’s expenses and contributes to better yield (quantity and quality) using less energy and less pesticides.

Toob O2 infuser

BioTherm’s Toob 02 Infuser and associated products provide a solution for increased dissolved oxygen levels in irrigation water. Systems start with flow rates as low as 2 GPM and are able to scale as high as required. The most popular unit supports up to 18 GPM. The company’s infusion products can be installed in any type of irrigation system and are proven to increase levels of dissolved oxygen providing a broad spectrum of plant health benefits. Installation is simple and well documented, with technical support available before, during, and after installation. www.biothermsolutions.com

Clean irrigation lines

OxyFusion is a machine that produces PAA (peroxyacetic acid) on demand. PAA is a disease control treatment and helps prevent biofilm buildup in your irrigation lines. (biosafesystems.com).

New plant varieties

Of course, new plant varieties are the main draw for many of the 9,000-plus attendees, and the bigger and better New Varieties display, improved last year when the show floor was expanded, did not disappoint. Here, two Cultivate insiders, Mary Beth Cowardin (foreground) and Stacy Buttari, enjoy the fruits of their labor (7). Mary Beth is Vice President of Marketing and Membership Engagement for AmericanHort, the organization that hosts the show; Stacy is owner and designer with Whitespace, the graphic design firm that creates all the signage and other visual elements of the show.

Vitroplus

Vitroplus, a renowned Dutch breeder and propagator of ferns, informed Cultivate attendees about a recent overhaul of its 30-year tissue culture system. The new fern factory is harnessing developments in lighting technology to grow and hardening off fern young plants in multi-tier systems under super-smart LED lights. The production facility offers a controlled environment growing system. Working with lighting company Reveb, Vitroplus grows its plantlets on trolleys fitted with LEDs that maximise available space: production capacity /m3 under low heat generating LED lamps is 20 to 30 times bigger than in a traditional greenhouse. The company’s Ellen Kraaijenbrink told FCI that the company is tapping into a new market: cold hardy ferns.

by Chris Beytes

Angie Duffree

Generation X, Growers, horticulture, Milennials, NEWS, plants, USATags: flowersOctober 19, 2018

International Vision Project

AIPH’s International Vision Project (IVP) has identified the working-age population in North-America as one of the three target groups which have the scale and spending power to reshape global demand. However, the future working-age population in America consists of the Generation X, Millennials and Digital natives. As it is generally accepted that they will earn less than their parents, the question arises whether future Americans will be able to sustain their appetite for luxury items such as flowers and plants? FCI leads the investigation.

The 2030 working-age population has enjoyed a prosperous youth: They live in a wealthier country, enjoyed higher education, a relatively safe society with, by the swipe on their phone, instant access to nearly everyone and everything. Yet, in a monetary sense, they will be poorer than their parents. University and college enrollments are at an all-time high resulting in a total debt of student loans of 1,5 trillion USD, a sum that will constrain spending power for several generations. The youngsters of tomorrow will live with their parents longer, postpone marriage and buying their first home and have children at a later age. All of which will impact their shopping priorities and obviously their demand for ornamentals.

Biophilia

This raises an important question: Will Americans will be able to sustain their appetite for flowers and plants? Part of the answer lies with us as an industry and the way we communicate our value proposition. Income is not the only factor that drives demand for ornamentals. We humans have an innate need for green (called biophilia); we simply thrive better, are healthier and mentally happier surrounded by flowers, shrubs, and trees. A plethora of studies underpins our intrinsic need for green. Yet, we as an industry mainly position our products as luxury items. With this new consumer cohort looming on the horizon we can no longer afford to opt for a luxury positioning only, or we will be among the first items to fall off their shopping lists.

Functional benefits

We will collectively need to promote the functional benefits that plants have on health and well- being. The 2030 consumer will have an appetite to buy plants as a means to reducing their medical bills, improve their kids’ school performance or increase the value of their property. City councils will deploy green spaces to mitigate storm water, to improve safety and increase tax revenue from the increasing value of real estate. Thus, there is an opportunity for the industry to create value off an array of functional benefits. Meanwhile, weddings lavish floral design at weddings will continue to exist, but they will go hand in hand with an increasing demand for ‘functional’ flowers.

Looking a decade ahead

This transition will happen, but not overnight. The IVP research identified quite precisely where and when this will occur. This provides an opportunity to grow our industry, but it also requires initiatives to deal with short-term threats. The USA has had a tremendous shakeout of growers, with 16% fewer growers remaining since the last recession. Main reason; the margin squeeze of around 27%.

And that is today’s contradiction: a strong economy, with good demand, but with growers under considerable margin pressure. That requires courage of everyone in the industry to be visionary, to look a decade ahead and starting to invest today to prepare for that changing demand of 2030.

by Joep Hendricks and Dr. Charlie Hall

Angie Duffree

Airlines, airport, cargo, Cut Flowers, Growers, Logistics, NEWS, USATags: flowersOctober 19, 2018

MIA

Ever wonder what are the two largest commodities passing through Miami International Airport (MIA)? Tourist and flowers!

That’s right after people, flowers from South and Central America arrive in huge numbers every day. In fact, there are an average of 133 cargo flights a day in and out of MIA.

Not all of these flights are full of flowers, but many are and that is why over the last several years 90% of the flowers consumed in the US passed through MIA. That is 253,806 US tons of petals.

Long history in floral

Miami has a long history in floral dating back to the late 70’s when the exports from Colombia began. Back then there was ample freight moving from the US to South America and flowers from Bogotá were a perfect way to fill airplanes back into the US via Miami and MIA.

In those days there was not a lot of infrastructure to properly handle flowers but little by little the industry grew into a huge business and the airport has been trying to keep up with the growth ever since.

Much of the flower industry is located just outside the airport perimeter where warehouses with colorful floral names can be seen lining the commercial areas. Stop at any street corner in this area and most of the trucks around you are floral related.

Uncertainty

The major cargo air carriers of flowers are LATAM, Avianca/Tampa, Atlas Air, UPS, DHL, Sky Lease, and others on a charter basis. Many airlines join the party during Valentine’s and Mother’s Day when the volumes double/triple.

All these airlines rely on cargo to fill their planes and this is where the whole game, of having the right plane, in the right place, at the right time, to secure the best load, begins. Cargo traveling to South America is no longer filling enough planes so these days flowers, which were once the perfect backhaul, are now having to compete with other cargo from other countries. This dance to move the cargo and make money finds airlines literally, flying around the world to get the best loads.

This leaves growers and cargo agents struggling to move this very perishable product to markets around the planet. Uncertainty has pushed some cargo agents to begin using sea containers from certain markets. Containers of flowers and greens have been leaving from South and Central America on a weekly basis for years now and have been very successful. The challenge is to have enough product to fill a whole container.

Managing growth

As a correspondent of B2B magazine FloraCulture International, I was able to take a VIP tour of the MIA cargo area with my guide, Emir Pineda from the Miami Airport.

Being in the flower business all my adult life I have spent most of that time in and around MIA and the flower industry. A concern that many in the industry have is: How will MIA manage growth as more and more passengers compete with cargo for valuable airport real estate? I posed that question to Emir. “We have a cargo development plan called CORE (Cargo Optimization Redevelopment Expansion) which will take us from our current 2.3 million tons of cargo to approximately 4.3 million tons by 2030. It is estimated to cost around $1 Billion. It will be done in phases…near-term optimize (fix) current cargo facilities, mid-term redevelop/build new facilities and long-term buy land and continue development west of the airport.”

Like many major city airports MIA is in a very populated area surrounded by neighborhoods and therefore has limited growth opportunities. Emir told me that building up was one way to get more space on an existing piece of land. So, expect to see taller buildings as you fly in and out of MIA over the next 10 years.

Africa

I asked about flights from Africa. Emir states that while they have spoken often with Kenyan Airways there is little hope of getting any Kenya planes landing here anytime soon. It is no secret that Kenyan Airways is not in good financial position and expansion is not possible at this time. However, Ethiopian airlines, with one of the newest fleets in the world, is more likely see MIA as a destination before other African nations.

Many other major US airports over the years have tried to attract the flower business out of Miami with little success. Why? MIA and the floral importing community have spent many millions of dollars on infrastructure specifically for flowers and working closely with the multiple government agencies have created the perfect place to import flowers.

MIA and US Customs and Border Control Protection agencies have worked with the importing community to minimize red tape and streamline the clearance process. This has resulted in some ground-breaking programs that are the envy of some other US ports.

When flying in or out of MIA stop to enjoy a Cuban coffee and pick up some flowers.

Best Airport in North America for cargo logistics

This year, Miami International Airport was named Best Airport in North America at the 2018 Asian Freight, Logistics and Supply Chain (AFLAS) Awards ceremony in Shanghai. MIA achieved its best year ever for freight tonnage in 2017, with 2.24 million total tons – a three-percent increase over 2016. A global freight hub, MIA offers service to over 160 cities on four-continents with dedicated freighter service to 106 global destinations. MIA handles 83% of all air imports and 79% of all exports to/from the region. 2017 rankings show MIA as the leading airport in the United States for international freight (1.93 million US tons).

by William Armellini

Angie Duffree

172

Cut Flowers, Growers, Minds, USA, wholesaleTags: flowersOctober 19, 2018

Mayesh Takes the Extra Step

When a floral wholesale company has been around for 80 years and is thriving, you can be certain there’s a reason. In the case of Mayesh Wholesale Florist, there are actually many reasons.

The family-owned, Los Angeles-based company employees 360 full-time staff, many of them second and third generation members of the Dahlson family. Back in 1978, Roy and Gerrie Dahlson purchased the then-40 year old company from Jack Mayesh and have steadily expanded to include 17 branches and a stake in Flower Cargo, a cargo agency and handling facility based in Ecuador. Once flowers from South America arrive in Miami, Florida, Mayesh handles all transport thereon out. Approximately half of Mayesh’s flowers are sourced from South America, mainly Ecuador and Colombia. The other half are from the US and other countries known for their superior flowers such as the Netherlands. Mayesh sells in excess of 100 million stems per year.

Fine-tuned cold chain

Being one of the top five floral wholesale companies in the US is a testament to the vision of CEO Pat Dahlson, Roy and Gerrie’s son, and his eight siblings. The company’s mission statement is “We take the extra step.” And indeed they do. Their commitment to quality is apparent in everything they do: from their close relationship with farms both at home and abroad until the moment their cut flowers are delivered to customers. To ensure the highest quality, all product is purchased directly at partner farms so that Mayesh can control not only quality but the entire cold chain. Dedicated trucks that make no other stops (and thus keep a constant temperature) are part of the process. Flowers remain in buckets continuously until their delivery rather than dry-packed in boxes as competitors do. Every step along the cold chain has been fine-tuned for optimal quality.

Luxe Blooms

Consistency and quality are the hallmarks of Mayesh. Several years ago, the company introduced Luxe Blooms, high-end flowers from artisan growers. Barbara Montes, Sales Manager of the Phoenix, Arizona branch states, “We try to get the best product available from anywhere in the world so that we have a consistent offering to meet demand.” Luxe Blooms will often have unique grading or varieties that set them apart. FloraHolland provides Mayesh with the majority of flowers for this endeavour, including Astilbe and Astrantia. Other Luxe Blooms include Protea from Africa, Cymbidium from Holland most of the year and New Zealand in the summer and Ranunculus and Anemone which, depending on the time of year, come from either Holland, Japan, Chile or California.

Community commitment

Mayesh stays engaged with the larger horticulture community by being very active on social media. Besides visibility and a great way to showcase their flowers, social media also speaks to a new generation of millennials and younger florists. Their Instagram page has 50,000 followers and their YouTube videos have more than one million views. Another way to stay connected is the Design Star Workshop. Each year, one competitor is chosen as that year’s Design Star. They showcase their talents at weekend workshops throughout the year in select cities. The increased exposure often propels these Stars to new heights within the industry and the greater community. The goal of all of these endeavours is education. As Pat Dahlson states, “This is a great opportunity to promote the industry” and educate the public about the importance of flowers in daily life. Showcasing their beauty, versatility and meaning is in Mayesh’s DNA.

Each year Mayesh works with the Memorial Day Foundation in the US to honor military veterans. Mayesh partners with a corporate sponsor and send tens of thousands of flowers to veteran cemeteries throughout the country where volunteers help place flowers on the graves of military veterans. This year, CEO Pat Dahlson flew to Arlington Cemetery outside Washington, D.C., the resting place of many notable people including John F. Kennedy, to help distribute flowers and be part of the greater community.

On a daily basis, Mayesh is also actively involved in their local communities. In Phoenix, for example, two of their full-time employees are from a local organisation called Gompers which trains and finds employment for people with disabilities. The goal is to assist these workers attain the highest level of independence possible. Both employees work together in the warehouse and are well-respected. Per team member Krista Hamas they have “become such a valuable part of our staff.”

Dipping toes in new water

Mayesh is symbolic of many modern-day, success stories: though older and established they’re nimble and not afraid to dip their toes in new waters. Not willing to sacrifice quality or consistency, they are willing to experiment with new ideas and concepts. Pat mentioned that once supermarkets began selling flowers in the late 80s/early 90s, it had a direct effect on traditional bricks and mortar florists. Pat mentioned that new entrants in the world of cut flowers “are coming from the world of interior design and art. I believe these flower artists can be successful as owner operators. I think we will see retail shops and studios owned by this new breed. They have always been in the business, but there will be more.” As with prior changes, whatever the new model, be certain that Mayesh will thrive.

Angie Duffree

Cut Flowers, florist, Floristry, Growers, Meetings, USA, wholesaleTags: flowersOctober 19, 2018

WF&FSA

The Wholesale Florist Florist Supplier Association (WF&FSA) last month announced Ben Powell has been appointed as President effective October 1^st. FloraCulture International sat down with him to discuss the current state of the floral wholesale business in America, the raison d’être of trade associations and future challenges.

FloraCulture International: Ben would you please briefly introduce yourself.

Ben Powell: “I have had the pleasure of working in the floral industry since 1993. My first exposure to the industry was through a year-long consulting project in Colombia with the Boston-based strategy consulting firm, Monitor Group. I became fascinated with the flower industry and joined the spray rose and mini-carnation grower HOSA. I was in charge of HOSA’s Miami business for 5 years before making a leap into the roll-up venture Gerald Stevens. For the past 13 years, I have served on the management team of Mayesh Wholesale Florist where I now serve as President.”

What is the current status of the U.S. floral wholesale industry.

“In 2016, the USA was the third world importer of ornamental products after Germany (including live trees, plants, bulbs, roots, cut flowers and cut foliage). Total import value in 2016 was $2160 million, more than twice of 1997 ($972 million). The wholesale segment of the U.S. floral industry is mature and consolidating. Like the traditional retail florist, U.S. wholesalers have seen a drop in the number of locations and a flat to declining revenue base in the aggregate. That said, progressive wholesalers competing well in the healthier segments are performing well. We believe there are approximately 600 wholesale floral locations in the U.S. Wholesalers employ a variety of strategies to source their products, including direct purchases from growers, importers and exporters. Many wholesale florists use a mix of the aforementioned sources.”

What causes the number of floral wholesalers to decline?

“The principal reason many wholesalers have struggled is the historical dependence on traditional florists, who have been impacted by the decades long gains by supermarkets and mass retailers and by B2C e-commerce penetration by large national players. Wholesalers who fail to respond to these challenges will continue to swim upstream. Those who identify attractive customer segments and serve them well will prosper.”

A good wholesaler brings value to the buyer; a good trade association brings value to its members. How difficult is that?

“WF&FSA has approximately 250-member companies, plus additional 225 branch locations. This includes both supplier and wholesaler members. The association represents more than half of the wholesalers operating in the U.S. No organization – including trade associations – can last for long without bringing value to its constituents. WF&FSA brings value to its membership through education and networking. Our largest event is the Floral Distribution Conference (FDC) held in Miami where we bring together almost 900 industry professionals representing all facets of the wholesale floral marketplace: wholesalers, growers, importers, transportation, logistics, hard goods, greens etc. This year we have been working hard to attract new suppliers to the Conference, including African growers, greens producers and others. We represent a diverse membership and we want to ensure our event reflects that.”

What’s the biggest challenge you feel your WF&FSA faces?

“We need to make sure WF&FSA provides benefits beyond the Annual Conference to ensure our members see the year-long value of joining the association. We provide exceptional networking and education during the Floral Distribution Conference, but we also need to make sure we are providing other services as well. We currently offer multiple research products, additional educational opportunities, blogs, newsletters and more and we want to make sure our members are taking advantage of these services and seeing the value.”

What does the accelerating pace of digitalization/online mean for your business?

“Many florists have been slow to adopt technology. That is a fact. And the same goes for wholesalers. But e-commerce is inevitable. Any company who thinks they can survive without it is making a big mistake. I believe it is one of the key success factors for the future.

Order gatherers have done some damage to traditional retail florists. This disruption has been going on for two plus decades and has been the source of frustration for some people in our industry. But it is a reality. It should be noted, however, that plenty of retail florists have built their business models and marketing in a way that FTD and 1-800-FLOWERS are a non-factor.”

What would you say to someone who questioned the need for wholesalers?

“There will always be people who question the value of the “middle man”. Customers who buy from the “middle man” and suppliers who sell to the “middle man” will even question the middle man’s value. But the fact is that logistics, distribution and the last mile will always play a crucial role in the supply chain. Just in time delivery, robust local inventories, knowledgeable sales professionals, the ability to complete complex wedding and event orders with flowers sourced from multiple regions of the world. These things have value. I don’t see that changing.”

What are the top trade policy and market access concerns for the WF&FSA right now?

“WF&FSA has not, at least in recent times, made trade policy or lobbying of any kind a priority. We have enjoyed mostly free and unencumbered flow of imported cut flowers for decades. Wholesale florists, our customers and the end consumer benefit immensely from free trade and we expect and hope this will continue. While we love domestically grown flowers, I believe our industry should be very clear that unimpeded imports are good for us.”

What is being done to floral consumption?

“Promoting more flower consumption overall is something I feel the entire industry can get behind. Many industry leaders have been discussing collaborative efforts to stimulate primary demand for flowers. I look forward to working hard on this in the months ahead with other associations. In the meantime, it is on all of us in the industry to focus on quality products and to do what we can, especially through social media, to promote that wonderful products we sell.”

How supportive is the current government of the floral sector?

“The current government has been neither helped nor harmed our industry in any direct or material way. We do, however, benefit when the consumer is healthy and spending money and when unemployment is low. Today, that seems to be the case.”

Does America First means that Domestic Production is back on the radar?

“American grown flowers are on our radar 365 days a year. While imports play a valuable role in our industry, we benefit immensely from great domestic flowers. Consumers, retailers and wholesale florists all need our domestic flower industry to remain dynamic and innovative.”

To conclude, tell us something more about your forthcoming conference (Miami. October 18-20.

“WF&FSA made a lot of changes for this year’s FDC. Firstly, we made the event members-only to ensure that all companies doing business with WF&FSA wholesalers have been properly vetted through our membership process. We also built a program to maximize time in the Table Tops to conduct business with suppliers and provide the best networking experience process. Lastly, we have built an exceptional educational panel this year which brings together flowers experts from around the world to discuss the future of the wholesale floral industry. I know I’m personally really looking forward to this year’s event and seeing all it has to offer.”

by Ron van der Ploeg

Angie Duffree

137

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