There have been reports of supply issues from Kenya recently, where a lot of your flowers are grown. How has your business and the wider industry been affected?
Ian Michell (IM): The challenge has probably been overcome now but the industry was definitely affected in September, October and November. The Kenyan Bureau of Standards were looking at the quality of fertilisers coming into Kenya. They put things on hold and they didn’t have enough staff to check everything to the right standard. They ran out of options and therefore nobody could import any fertiliser into the country.
It created a significant reduction in production, which meant there was less product arriving in the EU from Kenya. In the UK, the shortages didn’t really start to bite until November and it’s still having an impact now, but most of the impact has been felt in Europe rather than the UK. Flamingo imports direct from Kenya and we have a strong procurement plan with suppliers so we were unaffected.
There are still problems with some British companies not being able to get hold of enough Kenyan product, and the impact will probably be seen by the industry in Kenya for the next two or three months because a lot of the crop won’t have received any fertiliser during that period.
What are the other main talking points in the British flower sector at the moment?
IM: The number-one talking point at the moment is still Brexit. Nobody really knows what will happen with plant passports in the future because a lot of flowers controlled under EU guidance will retain that EU guidance and controlled status. If they come from Holland, then they may be cleared in Europe, but they will still have to pass through another border control to be cleared in the UK.
We assume we’ll adopt the same principles of control but 100 per cent of all products will have to have plant passports, whether they come from the EU or outside. That will possibly cause some concerns, but at Flamingo we are making contingency plans to continue to land product directly in the UK, so our product only has to go through one border control.
A high percentage of our product comes from our vertically integrated supply channel anyway so we’re not going to have to change any of our plans dramatically. It’s more about shoring up our existing supply model.
Has Brexit already had an impact on the UK flower industry?
IM: A decrease in general discretionary spend has affected the market for flowers lately. People are starting to think about spending less because of economic uncertainty linked to Brexit. Usually, discretionary items are the one that fall off the shopping list. Sales are a little bit lower in some areas than we’ve seen in the past. It has dropped off by a few percentage points.
The other challenge for us is ensuring we have enough labour to manage sales peaks like Valentine’s Day and Mother’s Day. This has been more challenging for us since the referendum. At Flamingo we plan quite a long way ahead, and we’ve got multiple sites, which gives us an opportunity to spread risk, and it means we’re not solely reliant on one source area for labour recruitment. We can spread our labour provider risk adequately across our main sites.
But there is generally less desire to work in the fresh produce sector than there used to be and we’re having to compete with businesses like Amazon in the online sector that are thriving and challenging for skilled employees. Most of the challenges in the UK flower sector in the next couple of years will revolve around labour for picking and bouquet making.
The fact that some of our labour demand comes at different times means we’re not competing for labour as much as the soft-fruit and topfruit teams, which are looking for pickers at exactly the same time. Again, our policy of having multiple sites helps because it allows us to spread risk.
What are the main trends driving flower sales at the moment?
IM: Seasonality is still a big driver. Seasonal flowers – like sunflowers, daffodils, tulips, Sweet Williams and peonies – are getting more fixture space and they’re really being supported by retailers since they provide a unique offer in store. It’s always an opportunity to freshen up the fixture, which drives footfall and higher sales. It’s an easier conversation to have.
Away from the shop floor, online retail is thriving. It’s driving a very strong position for gifting and generally people are buying good volumes online as well as in store.
In terms of varieties, roses are still a strong year-round performer and peonies still perform very well seasonally. We’ll see how daffodils do this year. Last year, they had some challenging times and this year the weather’s very mild, so I imagine there’ll be an awful lot of daffodils coming through very fast in the next couple of weeks. We are not sure if there’ll be enough people there to pick them all.
What work is being done in the flower sector around sustainable packaging?
IM: Some new packaging solutions have come out. Unfortunately they’re made of plastic, but there are some new modified atmosphere packaging (MAP) solutions that are now available. That’s providing some new opportunities. We’re seeing at least two to three extra days of shelf life at the customer end, but the look and feel is still a bit of a challenge. Technology is moving on at quite a pace and I’m sure that’ll develop over the next six to 12 months.
