EU market for potted orchids recovers as Dutch grow fewer Phalaenopsis

On the eve of Orchid Inspiration Days, which took place from 5 June to 14 June across the Netherlands, FCI surveyed the sentiments in the Dutch orchid industry. The market is displaying signs of a strong recovery due to a 22-25 per cent decrease in product volumes, writes Wilma van Velzen for FCI.

Phalaenopsis, with their vibrant colours and intricate flower patterns, are highly sought after. Their unique floral characteristics, such as candy-striped, speckled, dashed, veined, or dotted, contribute to their popularity in the market.

These epiphytic, evergreen, tropical orchids are commonly kept as houseplants. The Phalaenopsis, or moth orchid, is the most popular orchid commercially cultivated worldwide. Orchid breeders aim to innovate within this plant genus as flower shoppers are always in search of something new and different.

Meanwhile, trade and consumers have been captivated by the natural beauty, originality, and variety found in the group known as ‘Exclusive Orchids’. The Keukenhof’s 35th Annual Orchid Show (21 March—12 May 2024), inside the spring garden’s Beatrix Pavilion, showcased the best Dutch orchid growers have to offer in Orchidaceae. This diverse family of flowering plants comprises around 25,000 species and 880 genera, each with its own unique charm and allure.

Barometer of production and trade

Phalaenopsis are known for their intricate flower patterns.

Apart from its aesthetic value, the show serves as a resilient barometer of Dutch orchid production and trade. “Right before the pandemic struck, it was certainly a bit too much, with supply volumes in Phalaenopsis being larger than demand. Back then, there was an overall consensus among growers to produce less and make potted orchids more valuable,” says Royal FloraHolland’s Middelkoop, affectionally nicknamed ‘Cororchidee/ ‘Corchid’. Middelkoop, with a proven track record of more than 20 years leading market development at what is arguably the world’s largest trade hub for potted orchids, demonstrates the industry’s ability to adapt and thrive in challenging times.

He says Covid-19 took the industry by surprise, with retail florists remaining closed while supermarkets were allowed to continue selling flowers and plants. Phalaenopsis traditionally has a strong presence in the European mass market product mix, leading to a surge in sales.

However, this was followed by a severe energy crisis, causing a significant drop in production. The irony of the soaring energy costs is that it automatically solved the problem of oversupply.

Signs of recovery

Cymbidium in lime green.

The potted orchid market is showing signs of recovery. The mood within the industry is relatively upbeat, particularly among Phalaenopsis growers.

Middelkoop notes, “Since the end of 2022, approximately 12 growers have stopped production altogether, leading to between 22-25 per cent fewer product volumes in the market. Simultaneously, the share of orchids sold through the auction clock has decreased between ten to 12 per cent. This situation causes higher prices in the day-to-day market, eventually also benefiting pricing in direct Phalaenopsis sales.”

The energy crisis emptied a sizeable number of Phalaenopsis-filled greenhouses. Therefore, the group of Exclusive Orchids seems to be in the spotlight more. Middelkoop puts things into perspective. “Nine of ten sold potted orchids still is a Phalaenopsis. In that respect, little has changed.”

Mass market orchids

The orange colour is somewhat rare in Phalaenopsis.

The mass market retail suffers most from product shortages in ‘retail-worthy’ Phalaenopsis, which inevitably drives up consumer prices at the retail shelves at a time when many European consumers are suffering one of the biggest cost-of-living squeezes in many years.

By contrast, other supermarkets did not adjust their orchid prices or stopped selling the flowering houseplant altogether. Middelkoop comments, “Overall, supply and demand balanced each other.”

The numbers

Phalaenopsis in pure white.

The glasshouse area used for commercial Phalaenopsis growing in the Netherlands has fallen from 230ha in 2022 to 175ha in 2024. Market analysis by Royal FloraHolland suggests there are 30 Phalaenopsis growers in the Netherlands, down from 44 growers in 2021.

Middelkoop says, “In the Exclusive segment, the decline of growers was less significant with only four growers having ceased operations over the past two years, notably in Dendrobium and Cymbidium.”

The top four export markets for Dutch-grown potted orchids are Germany (31 per cent), France (15 per cent), and the UK (14 per cent). Domestic sales represent eight per cent.

Brexit bruhaha

Artisan Vanda orchids are much sought after.

Not all that glitters in the UK market is gold. The new Brexit Border checks pose a challenge for growers and exporters alike, particularly for those dealing with Exclusive Orchids such as Cambria, Brassia, Zygopetalum, and Miltonia. For the import, export, or re-export of these artisan orchids, the UK Animal and Plant Health Agency requires a permit or certificate under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

Apart from the additional costs, the phytosanitary certificate issued by the Dutch authorities is valid for eight days only. That time frame results in a time that is way too short when exporters also need to apply for an import permit in the UK. The entire process also involves heaps of paperwork, as for each shipment of speciality orchids, the Dutch exporters need to specify how many of which genera are on board.

The bottom line is that only the larger UK retail chains with selling points across the country can continue to order speciality orchids, such as three Danish trolleys of Miltonia, to reduce costs and shipping time.

From 30 April this year, consignments of Exclusive Orchids coming from mainland Europe (the EU) are physically inspected at the UK’s new border control points (BCPs), where sanitary and phytosanitary (SPS) checks take place. The problem, however, is that there are not enough BCPs for flowers and plants in place to maintain the country’s biosecurity. So, to avoid chaos, most of the high-risk and medium-risk plants passed the border without being checked in the first weeks of May.

Phalaenopsis, an extremely popular orchid with a significant and stable ranking in the UK market, is not on the CITES list, and neither are Vanda, Dendrobium, and Cymbidium. The reason for this, authorities say, is that they are less endangered in the wild compared to their speciality counterparts in the exclusive orchid range. Green professionals, however, rightly stress that greenhouse-grown Cambria, Miltonia and all other specimen orchids are propagated through tissue culture and, as such, are not wild plants.

Pricing

Most growers and exporters (Phalaenopsis often make up 25 per cent of their revenues) agree that pricing in the run-up to Valentine’s Day, particularly for International Women’s Day, has been ‘extremely good’.

Prices increased by an average of 19 per cent in the Phalaenopsis Overall category, that is, all pot sizes and stem gradings combined.
The first quarter of 2024 marked a 17.5 per cent spike in price and 15 per cent less in supply volumes compared to the same period last year due to the sizeable number of growers who stopped producing in 2023. More generally, fewer single-stemmed Phalaensopis were on offer.

Middelkoop notes, “Anticipation for Q2 is now building as fewer product volumes are expected to enter the market again compared to 2023. With the arrival of summer, the market is expected to return to a new, more stable normal. Most growers desperately need better prices for their potted orchids as commodity prices and labour have increased dramatically.”

MASS MARKET RETAIL SALES VERSUS TRADITIONAL WHOLESALE

License to operate

Hopefully, somewhere down the line, growers will still have some earnings left to invest in their business if only to maintain their ‘licence to operate’ and comply with the strict regulations the sector will face in the coming years.

Collaboration and knowledge sharing in such a challenging business environment are key, says Middelkoop. “To date, around 95 per cent of all pot orchid growers are MPS or MPS-GAP certified. This gives potted orchids a head start on other product groups. During a recent visit to breeders, I learned how breeders and researchers are committed to creating varieties with a shorter crop cycle. Phalaenopsis cultivation requires a lot of energy, such as gas and electricity. So, this is actually a good step towards cost savings and sustainability.”

Orchid campaign

Keukenhof’s Annual Orchid Show makes orchid aficionados feel like kids in a candy store.

At the same time, the unified Dutch orchid industry has launched a new campaign highlighting the extremely long shelf life of potted orchids, particularly Phalaenopsis.

Middelkoop concludes, “The truth is that the plant requires much energy during greenhouse cultivation, but if you offset this with a long shelf life, Phalaenopsis is much more sustainable compared to, say, a bunch of flowers.”

During the annual Pot Orchid Product Day this autumn, growers will again vote for the transfer of PSP (Product Specific Promotion) funds for the period 2025-2027, which can be used to continue the collective promotion of potted orchids.

This article was first published in the June 2024 issue of FloraCulture International.