Carlo Vijverberg and Alex van der Goes are the directors of Florca, a company specialising in exporting cut flowers and potted plants by air. The early days of the pandemic nearly halted their operations, but now they see a sharp rebound in demand. In FloraCulture International, July-August 2021. they look at ornamentals’ global production and trade, commenting on economies of scale, digital transformation, and niche flowers’ prominent role.
The new corporate identity of Florca was launched in December 2020. Before initiation, the new-look Maurits Cornelis Escher inspired logo had been pinned to the office wall, awaiting comments and views from the organisation’s entire staff. As a draft image, even then recalls Florca’s sales director Alex van der Goes, “It felt right, right from the beginning. The pictorial logo identifies our company at first glance: flowers, global business and aeroplanes. It was greeted with great enthusiasm by the entire team.”
Van der Goes and managing director Carlo Vijverberg founded Florca in 1999. From small beginnings in a Naaldwijk packing shed, the USA and Canada were their sole markets. Then in 2003, Florca became part of the Dutch Flower Group (DFG). Since then, the company has grown in leaps and bounds over the past two decades with a turnover that ranges between 15 and 20 million euros and 1.6 million kilograms of goods traded in 2020.
Vijverberg attributes 80 per cent of the business to the export sales of cut flowers, 15 per cent to potted plants export and five per cent to hardware/horticultural supplies.
The export company employs 30 staff and operates from a modern location, annexe packing hall and cold storage facilities situated only a few hundred metres from Royal FloraHolland’s silvery office tower in Naaldwijk. Florca’s customer base includes floral distributors, wholesalers, florists, event planners, hotels and super yachts in 60 countries worldwide, including regions and continents such as North America, the Gulf region, Asia, the Caribbean and Africa.
“An unwritten rule in our business is to never bypass the wholesaler and distribute directly if your customer has built a strong relationship with an importing wholesaler. In new markets, we will strive to sell B2B as directly as possible, always focusing on value-added services,” explains Vijverberg.
Florca is quintessentially a service wholesaler and a specialist in exporting flowers and plants by air. Drawing a parallel with more traditional floral wholesale is, therefore, tricky. Van der Goes elaborates, “Our philosophy is less a pull strategy. We do respond to actual demand, but also want to build lasting customer relationships and use push strategies that are driven by projections of customer demand.”
In their recently refurbished office, Vijverberg and Van der Goes take a brief look at the overall impact Covid-19 has had on the floral industry and where their business stands today. Vijverberg says, “Compared with the rollercoaster events in the early days of the pandemic, today’s market remains firm and has recovered remarkably well and quickly. One year on, we can frame things in a better perspective. In March last year, we had no idea how the global health crisis would impact our lives and business. In many countries flowers and plants were not deemed essential and governments ordered florist shops and garden centres worldwide to close. By mid-March we were losing 80 per cent of our turnover.”
Van der Goes adds, “We all had many questions and there was uncertainty over how long the pandemic would last. Fortunately we frequently met online with other co-directors within the DFG group to share our experiences.”
Within five weeks, retail sales started to pick up, but for a speciality wholesaler such as Florca, whose proportion of customers are hospitality and event planners, the recovery was slower. Van der Goes explains, “Several countries continued being under lockdown, with only a few places open to international tourists.”
Vijverberg notes, “The irony of the coronavirus pandemic is that in the long run it turned out very well for nearly all segments of floriculture. Initially, the negative impact was comparable to a combination of the losses and disruption of 9/11, the 2008 financial crisis and the 2010 eruption of Iceland’s Eyjafjallajokull volcano. But the recovery was amazingly quick. The summer of 2020 was by far the best ever thanks to end-consumers taking an interest in home decoration and styling. This trend translates into high-prices and increased product volumes. Last summer, accounting for 60 per cent of our sales, was the wealthy Gulf region staying at home when they normally would travel to fancy places in Europe, such as the Côte d’Azur. To date, demand in the Middle East continues to be strong with the Sugar Feast in May being a big floral holiday this year. However, several island vacation destinations are still closed and the event industry is largely halting in its track, which is of course less beneficial for our business.”
As Florca’s parent company DFG led its more than 30 businesses through the initial fog of the pandemic, the main focus was on creating a more efficient organisation. As a result, DFG companies Hamifleurs (Florca’s neighbour next door at Trade Parc Westland) and Aalsmeer-based OZ Export joined forces, combining their assets, logistics operations and office supported functions. The newly combined organisation OZ-Hami performs purchasing activities for Florca. According to Van der Goes, the working relationship between the three is a meaningful and effective one. “We know each member of the procurement team personally. They consider Florca as their specialised air freight company, giving us full attention and understanding with the time sensitive issues and specific demands involved in shipping flowers and plants by air. In the past, it was common practice to purchase your own flowers and plants at the auction clock but that ship has now sailed. A more centralised purchasing enables more efficient inventory control, lower staffing costs and fewer overheads. Plus it allows us to concentrate on distribution, customer acquisition and building stronger relationships with our customers.”
Florca does not rely entirely on the auction for its flowers and plants. Other sources come directly through the standard Virtual Market Place (VMP) with Dutch, Belgian, German and Danish growers bringing breadth and depth to the product portfolio. Florca’s role is to ensure that the delivery of clients’ products match their customers’ demands for quality, specification, and shelf-life. For more global sourcing of, for example, tropical flowers, the company makes use of DFG’s Coloríginz company.
Looking at the global production of cut flowers and plants Vijverberg, born the son of a lily grower, sees that growers are expanding their businesses to benefit from the economies of scale. “More recently, three Dutch lily farms merged, forming a big player in the global lily market, growing around 20 million stems on 12 hectares of greenhouse areas in multiple locations. Another example is grower alliance Zentoo representing 87ha of chrysanthemum production.”
Ten years ago, almost all cut flowers were sold through the daily auction, while today, the cut flower trade is increasingly modelling on long-term supply contracts for the delivery of tailor-made retail orders. What’s more, cut flowers are selling more and more online, which automatically means smaller product volumes. “So, several cut flower grower groups in the Netherlands have opened subsidiaries at the auction for same-day delivery to exporters. Both production and trade seek collaboration. Growers because they want more security of orders and exporters because they want to oversee their supply chain,” says Vijverberg.
He and his companion see the benefits of more vertically integrated production but don’t think it is wise for wholesalers to embark on flower production. “Just stick to what you’re good at. A grower is an expert in growing. To excel, Dutch horticulturists often grow a single crop instead of multiple species.”
Large-scale flower farms at home and abroad is one reality. But out there are still many small to medium-sized growers who produce niche flowers, which Vijverberg and Van der Goes say, are essential for a diversified product offer.
“In air freight flower and plant exports, you see that local wholesalers purchase their bread-and-butter products close to home. In the Far East, this often means China. More mainstream products arrive from Kenya in the Middle East, while in the USA, these come from Latin America, Canada and California. However, new varieties and more rare flowers are frequently imported from the Netherlands through companies such as Florca.”
Vijverberg and Van der Goes’ fear is that these niche flowers will become increasingly scarce now that digital transformation and mandatory eco-certification creates uncertainty for smaller growers. “The Floriday platform, for example, is, in essence, a good initiative. But digital transformation is a gradual long-term process, and change does not happen overnight. Our main concern was that of Royal FloraHolland becoming the new Amazon in flowers and plants. But we are happy with how the auction responded to the protests,” says Van der Goes.
He adds that Florca is also in a mid-digitalisation of processes expanding their webshop year on year, the webshop’s speed and diversification product being the most significant challenge. “Its inventory is linked to our partners in the global value chain. But you don’t want a situation in which customers see the same product five times but offered for five different prices.”
Van der Goes believes it is good to care for the planet and its people. “Cut flower prices may have shot up in the past ten months but we should not forget that for many years profit margins for niche flower growers have been thin. We believe they deserve to be cherished because they are a key factor in the Netherlands’ success in global flower trade.”
With rising demand for variegated, patterned tropical plants, cacti and succulents in export markets, Florca’s potted plant exports grow significantly, even if using air freight is a costly exercise and comes with much stricter plant health regulations.
Vijverberg says, “Currently, there is such a strong demand for exclusive indoor plants that the product value is way bigger than the cost of airfreight. A much bigger concern is the availability of products. Even if you are willing to pay one euro per plant, there is still not enough production. Many products are sold out with growers kindly asking you to re-contact them in three months. In terms of importing country requirements, they vary depending on the country. It is a given that in the USA and Canada plants should be bare-rooted with no growing media attached to the roots, which excludes both markets for our indoor plants.
Overall, you need more discipline and paperwork in airfreight plant exports, but we don’t like to say no to our customers, so if you can bring them into the country, we will include plants in our shipments.”
In a floral supply chain with a tendency to cut out the middlemen, developing, nurturing and maintaining the buyer-seller relation is more crucial than ever.
Vijverberg elaborates, “Pricing is a basic factor. Get it wrong and you will lose the customer’s interest. If the price is right you need to go the extra mile because customers don’t buy on price alone. We have found that customers are willing to pay a higher price as long as the customer service and product quality is reliable and consistent.”
To keep the Florca quality promise, Florca installed an outside vacuum cooler in front of their premises in Naaldwijk. Vacuum cooling improves the product quality. The technology takes away the heat from the flowers, which cools them down through and through within half an hour. So when the flowers leave Florca’s premises, they are better prepared to withstand the long haul trip by plane. This cooling preserves and extends the freshness of flowers.”
Asked about Florca’s next step, Vijverberg and Van der Goes conclude by saying that they aim at a minimum of ten per cent growth in sales year on year, with cut flowers accounting for 70 per cent, houseplants 25 per cent and sundries five per cent of their international sales in 2025.