Who says romance is dead? February 14 is one of the busiest days of the year for the fresh flower market. Blooms are the preferred gift over chocolates, champagne and jewellery, according to the Flowers & Plants Association (F&PA), and more than 1.5 million loved-up men and women give fresh flowers on Valentine’s Day.
But while love is in the air across the UK, the flower trade gets down to the hard graft. The explosion in demand, which sees vast volumes of flowers on the market, a serious logistical headache and competition hotting up on the high street, means that the run up to February 14 can be a nail-biting time for the trade.
Flower producers are the first to feel the heat as they prepare for the massive one-day demand by planning for the right volumes and aiming to meet strict standards. But the market can be difficult to predict.
The European flower trade is under pressure to supply demand this year after harsh winter weather in the main production regions in Holland, Belgium and Germany caused a shortage of product across Europe. The shortfall, which has seen the price of flowers jump 50 per cent up on 2006, has opened doors for more far-flung producers.
Israeli exporters plan to airfrieght 100 million flowers to Europe for February 14, with an expected revenue of NIS150 million (£18m) - significantly more than the returns received last year, says Chain Hadad, secretary general of the Israeli Flowers Growers’ Association.
A streamlined infrastructure has been set up by Israeli exporters in order to supply the market efficiently, using two cargo planes loaded with flowers that fly daily to European sales destinations. “Flowers picked in the morning reach the sales points in Europe within 24-36 hours of harvesting,” Hadad explains.
The Valentine’s Day demand is mostly for red roses, but the market has also opened up to other varieties. Israeli exporters will airfrieght red gerbera, lisianthus and gypsophila.
The Colombian industry also has high expectations for Valentine’s Day 2007, according to Proexport Colombia, although the organisation is aiming to boost exports throughout the year. Sendings to UK wholesale markets are steady throughout the year and the market share within supermarkets is also growing steadily. “The relationship between growers, packers and supermarkets has become stronger,” says a spokeswoman. “Colombian flowers fulfil customer expectations with their colour, the size of their heads and shelf-life, as well as the fact that they are grown with social responsibility - a very important point for consumers.”
So who buys into Valentine’s Day? Around 90 per cent of the flowers sold around February 14 in the UK are bought by men, according to F&PA figures, and they prefer to shop for flowers online as they are used to purchasing other items this way. This marks a turnaround on the rest of the year when it is mainly women who buy flowers. An increasing number of women are buying flowers as love tokens for men, although this makes up only five per cent of sales, according to the F&PA, perhaps indicating a potential area for growth.
There are still 47m unlucky UK adults who will not receive any flowers,” says Andrea Caledcourt at the F&PA. “This is why the F&PA continues to promote the idea of regular flower-buying all year round, and why we don’t carry out any active promotion to encourage the public to buy flowers on Valentine’s Day,” she says.
But Brian Wils-Pope at the British Florists Association is upbeat about prospects for the 2007 occasion. “We are hoping for a better Valentine’s Day than last year because it’s on Wednesday this year, which means that, while we will able to deliver to offices and places of work on the day, fingers crossed the Valentine’s theme will be extended until the following weekend,” he says.
Florists must hone all their strengths - the top-quality products, creative flair and personalised service - in order to stand firm on the Valentine’s Day market. But a number of problems face the flower business in the lead up to such high-profile events.
The rocketing demand for flowers on February 14 alone sends prices sky high and tightens profit margins across the category. “The wholesale trade needs to address the fact that prices on the market will probably triple, forcing retailers to at least double theirs,” says Wils-Pope. “The high price of red roses tends to put people off. But margins are squeezed at this time - with proper mark-ups, consumers would have to pay £6-7 a head.” Generous lovers will have to dig deep for a hand-tied bunch of red roses, which will retail at upwards of £40, according to Wils-Pope. “Some customers have been known to spend around £200 on red roses alone,” he says.
One of the ways that florists can alleviate the price pressures of Valentine’s Day is to channel the traditional demand for red roses towards alternative choices, mixed bunches in particular, says Wil-Pope. Tulips and lilies should also be considered as an alternative to red roses, he adds. “Many flowers, mixed carnations for instance, won’t go up in price, and this means that neither the florist nor the consumer will be ripped off,” he says. “By pushing mixed bunches, rather than the more sought after red roses, retail florists can sustain their mark-ups.”
The F&PA also aims to encourage people to look outside the traditional dozen roses. “Our consumer surveys show that many people now view this gift as old-fashioned, lacking in imagination, and a bit cheesy,” says Caldecourt. Opting for alternatives to red roses also goes some way to alleviating the one-day demand for the flower, she adds.
Add-ons such as chocolate or champagne, which can add around £20 to the sale, can also help florists to cash in on the short-term demand.
Profitable retailers are at the centre of the trade because, without them, the rest of the supply chain, including wholesalers and relay companies, would struggle to survive, says Wils-Pope. “The relay companies in particular have a responsibility to ensure their florists will have profitable margins,” he says. “They have to fix their price to the consumer much earlier than the florist and they must take profitability into consideration when they do so.”
The complicated logistics needed to move around the sheer volume of fresh flowers on the market in February mean that distribution, and home deliveries in particular, poses challenges for the sector. “Florists have to plan ahead to ensure they are in the position to offer a good service, with a strong delivery service in particular, as Valentine’s Day is a good time to show that they can have a better delivery service than the couriers,” Wils-Pope says.
But the number of firms that allow logistics to dictate business is surprising, says Robert Ingram, business development manager at Enterprise Rent-A-Car. “If a florist had enough vans for Valentine’s Day with the vehicles they use on a day-to-day business, they are doing something wrong, as that is too many for the rest of the year,” he says. “The most important thing is that the fleet is flexible. Hiring vehicles is the solution at peak times. No one wants to be in a situation where they have enough supply but no means to deliver it.”
The rental firm, which has 300 locations in the UK, has access to 35,000 vehicles.
Ingram says the ability to deliver as promised is key to building business. “To create loyalty for the rest of the year, florists have to be able to say yes to every situation, and then figure out how they are going to do it,” he explains.
But most small and medium-sized retailers have not thought through the idea of what they can achieve, Ingram adds. “People’s perception of renting a car generally comes from hiring one at an airport, which can be expensive,” he says. “But hiring extra vehicles is essential for seasonal businesses so that they can react quickly and respond to peaks in demand. It’s no good to be out and about on the February 15.”
The stakes are high in the run up to Valentine’s Day, with independent florists competing against the likes of massive department stores, as well as supermarkets, which are steadily improving their flower offer. “Florists are finding it harder and harder to compete with the multiples on Valentine’s Day,” says Wils-Pope. “Tesco sold 12 red roses for £5 last year, and with these kinds of offers around, the situation is becoming increasingly difficult.”
The competition on the high street this year is no different. Tesco and Sainsbury’s are both taking online orders for 12 red roses at under £20, while Asda is offering a free box of chocolates for orders of more than £20.
UK consumers now know the difference between the long-stemmed roses with large heads sold at florists and the supermarket rose, with a shorter stem and smaller head, and buy accordingly, says Caldecourt. But it is not surprising that retail florists are critical of supermarket promotions at this peak period. “The supermarkets are doing the industry a disservice because they are cheapening the value of red roses at a time when people are willing to pay a bit extra. And why shouldn’t the multiples get good value as well?” Wil-Pope asks. “You don’t see good restaurants cutting their prices on Valentine’s Day - most restaurants put their prices up.
“The supermarkets are damaging the industry by pushing prices down at one of the most crucial times of the year.”
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