While the Russian economy has slowed more or less to a standstill, FlowersExpo (September 10-12, 2019) held at Crocus Expo in Moscow, was a buoyant show with plenty of business activity and an extensive educational programme.
If you want to take the pulse of what’s happening in the Russian flower industry, there’s no better destination than FlowersExpo. Helped by good weather to get people out, this year’s show attracted over 16,000 attendees who were kept engaged by 250+ exhibitors from the moment they entered Crocus Expo to the moment they left.
Set across two halls, Russian exhibitors (40%) –representing the big names in Russian rose farming- occupied a prime location near the entrance. Truly an international event, FlowersExpo offered a trip around the world of ornamentals in three days with impressive country pavilions from Ecuador (roses), Colombia (roses and summer flowers), the Netherlands (cut flowers and potted plants), Germany (nursery stock, young plants, seed technology and supplies) and Poland (trees, shrubs and conifers). Royal FloraHolland, which in recent years has been one of the bigger exhibitors at the show, was absent this year. In turn, there were individual participants galore from 30 countries. While Spain, Singapore and Sri Lanka were among the newcomers, rose grower Gulshan from Uzbekistan and Anthurium producer AgroMiranda from Venezuela (!) were present for the second time.
A nation of flower aficionados
That Russia is a nation of flower aficionados is mirrored by UN Comtrade and ITC statistics which rank the country as the world’s sixth largest cut flower importer, representing a value of nearly 40 billion dollars. In terms of consumer spending, figures by the Rabobank point to €15to €20 per head.
Roses continue to be a firm favourite with Russian consumers who consider the ‘queen of flowers’ to be the most exclusive and prettiest flower and the ultimate gift for the country’s most popular floral holidays: International Women’s Day (8 March), Knowledge Day (1 September) and new year. A quintessential, low ranking filler flower, Chamomille (Matricaria) is hardly ever talked about. However, it is Russia’s national flower and in consumer panels often mentioned as one of the most cheerful flowers next to the tulip and Acacia dealbata.
In terms of volumes, roses also dominate flower imports (59.8%), followed by Chrysanthemums (18.9%), carnations (13.5%), lilies (1.0%) and orchids (0.3%). Flowers in the miscellaneous category account for 6.7% of imports in 2018.
Between 2014 and 2018, imports of cut flowers to the Russian market grew by 3.3% from 1.34 to 1.38 billion pcs. Official graphs by BusinesStat show a clear drop in imports between 2015 and 2016 followed by an increase in 2017 and 2018. The reduction was primarily induced by the decline of flowers imports from the Netherlands in 2015, as well as a decrease in supplies from Ecuador, Colombia and the embargo on Turkish carnations in 2016. The devaluation of the ruble by the end of 2014, along with a decrease in real incomes of Russians, caused a drop in demand and subsequently a decrease in imports.
Dramatic drop in Dutch exports?
FlowersExpo hosted a debate entitled ‘Russian market of cut flowers: current status and development prospects’ during which Russian consultancy firm MegaResearch referenced that in 2016 flower imports from the Netherlands basically came to a standstill after the Plant Health Inspection Service of the Russian Federation received signals of Dutch flowers being seized because of the presence of Frankliniella occidentalis (Western flower thrips). The Netherlands’ pro-active approach, which included temporary approval of specific crop protection products for the control of thrips and post-harvest disinfestation by controlled atmosphere treatments went unmentioned.
Against the backdrop of MegaResearch’s Power point graph showing a steep climb in imports from Belarus and a dramatic drop in Dutch exports, Dutch-based flower wholesaler but Russian born Ilya Dombrovskiy stepped on to the stage to help put things in perspective stressing that the Netherlands is the world’s second largest agricultural exporter after the US, adding that the country of tulips and windmills is also the world’s largest flower exporter of cut flowers, houseplants, bulbs and nursery stock produce with around 600 wholesale companies generating an export value of €9.2 billion in 2018. “There was a time when Russia dropped out of the top 10 importers of Dutch flowers but it is now firmly back up in the sixth or eight spot. Russia is one of the hardest countries to export to, with a notoriously complex flower industry characterised by a highly volatile market with lots of bureaucracy and geopolitical and currency risks.”
Russia is also known for its policy of import substitution and self-sufficiency in agriculture, which gained momentum in August 2014 when the country imposed an embargo on food imports from the EU, the US and some other Western countries, in response to sanctions over Ukraine. In its aftermath, large greenhouse complexes for the production of fresh produce emerged near the bigger cities across the country for the production of fresh produce. In a ripple effect reaching ornamentals, albeit to a lesser extent, money was also invested in new rose farms. According to Russia’s Association for Greenhouses, Russia has to date 140 ha of ornamentals under glass, of which 90% are dedicated to roses.
Reacting to the association’s remark about the hardship, the lack of state support and the competition that domestic flower growers encounter from the import flower business – adding that home production will hardly ever be able to satisfy the huge demand in the market – Dombrovskiy said that floral wholesale companies are facing more or less the same problems as the Russian growers with an overall worsening of the market. “In terms of regulation, I am not entirely positive but there is good news. The Russian love for flowers is unprecedented. It’s something I haven’t experienced in any part of the world. Not even in Germany, Europe’s largest consumer market.”
Many roads lead to Russia
As there are many roads that lead to Russia, Dutch agricultural counsellor Meewes Brouwer says analysing trade data can be tricky because it can potentially misrepresent the situation in daily life. However, he thinks it is pretty safe to say that for many Dutch horticultural businesses, Russia continues to be a major export market with a notable 25% increase in 2018. In cut flowers, it is currently ‘smooth sailing’, while in bulbs, fruit trees, perennials and young plants – plants imported for growing- Rosselkhoznador’s (Russia’s Federal Service for Vetinary and Phytosanitary Surveillance) stricter biosecurity requirements have caused relations with the Dutch authorities and trade organisations to be somewhat rocky.
Meeuwes said that nonetheless “commercial activities in the ornamental sector between Russian Federation and the Netherlands continue to expand. Last year, the Netherlands exported €250 million of ornamentals such as fresh cut flowers, bulbs and potted plants to Russia.” He has seen the ruble relatively stable and overall this is good for consumer’s confidence. “In the run up to 8 March, I visited several floral wholesalers in St Petersburg together with a group of Dutch tulip growers and saw boxes of the most expensive flowers. So among consumers there’s still a willingness to pay a higher price.”
Shorter stemmed roses to the detriment of Ecuadorian roses?
That’s good news too for Ecuador-based flower farms as the majority of roses are sourced from here. The country has 5500ha dedicated to commercial rose farming and large flower heads and long stems as its most important USPs. It is difficult to determine whether there’s a growing trend towards shorter stemmed, cheaper roses from Kenya and Ethiopia, which can be increasingly found on the Russian marketplace. Speaking with rose breeders, growers and traders, the common view was that both products serve different market segments with limited risks that African roses take away market share from the existing Ecuadorian product line. At this moment, Ecuadorians presumably have bigger concerns. Not long after FlowersExpo had closed its doors, Ecuador’s President Lenin Moreno declared a state of emergency following days of violent protests. At the time of printing the crisis in Quito continued, impacting the flower business as flower growers faced problems getting their products to the airport and ensuring a safe environment for their workers.
The show was held from September 10 to 12. As such, it was no surprise that talk on the 20,000m2 exhibition floor was dominated by the spending habits of Russians in the days leading up to Knowledge Day (День Знаний). The celebration is also known as 1st of September, the day all children in Russia go back to school and present their teachers with flowers. According to the Russian press agency Interfax, Knowledge Day sales have been annually decreasing by 10 to 15%, based on an analysis of the Russian Association for Greenhouses. One of the association’s members told the press agency that Russian consumers are tightening their purse strings as school clothing and equipment and the actual education become increasingly more expensive. Floral wholesalers present at FlowersExpo agreed that this year’s sales were somewhat disappointing with Russian parents splashing more cash on cards and charity goals and purchasing fewer flowers per child.
Next year’s FlowersExpo will take place from September 8-10, 2020
Cutting ribbon ceremony with second from left Julio Cesar Prado Ecuador’s Ambassador to Russia and Meeuwes Brouwer (first from right), agricultural counsellor of the Netherlands’ embassy in Moscow.
This Russian beauty illustrates that FlowersExpo is a perfect showcase for new Chrysanthemum varieties. Wouter Jongkind, market manager at Dutch breeding company Royal Van Zanten shares Braat’s optimism by saying the show has gone well for them. “Traditionally the most frequently asked question from Russians was if they can buy direct. On the other hand, from the Russian side, there was interest to buy starting material while we were equally pleased with the number of Russian florists who came to see us. Our main goal was to promote our line of Chrysanthemums and Alstroemerias and fuel demand among Russian flower professionals. While a few years ago little thought was given to the assortment, florists now clearly understand that novelty flowers help to sell more. Typically strong in Russia is the presence of flower schools and floristry courses with which we are also in good contact.”
Hector Rodrigues Castro from Venezuela explained that he grows Anthurium in Miranda, one of the 23 states of Venezuela and home to the capital Caracas. “Russians have major investments in Venezuela’s oil and weapons industry”, he says, “however, they are unfamiliar with Anthuriums from Venezuela and this explains our presence here.” He dubbed his country the ‘second largest anthurium producer of South America’(the continent’s Anthurium production is mostly dominated by Colombia and Brazil), benefiting from fertile soil, intense sunlight and well-oiled logistics served by three airports and a railway network. “Our production is year-round and we offer an incredible range of colours present in the flowers, almost the entire rainbow.”
It is not the first time Venezuela tries to tap into the flower industry. Back in 2012, the State made millions of dollars available to transform the productivity and agility of the country’s modest cut flower industry. Expansion of Miranda-based flower farm company Doña Adela, a brand new perishables centre at the international airport Simón Bolívar de Maiquetía, the establishment of a Venezuelan-Russian distribution company Orquídea S.A, a chain of flower shops in Caracas, a flower shop in Moscow and a half finished promotion campaign appeared later to be a costly exercise as only two shipments of lilies were sent to Russia in 2012. Seven years later Orquídea went bankrupt while Doña Adela continued to serve the local market. Its participation in FlowersExpo under the flag of export consortium AgroMiranda (flowers, cacao, fish and plastics) is a prove that Venezuela is ready to try its luck in flowers for the second time.
‘Literally rosy’ is how Perivar Braat (first from left) Area Manager Rose at Dümmen Orange, dubs the overall business outlook with a number of Russian rose growers completing or planning an expansion of their greenhouses. “The show has gone very well for us with significant interest in our new product lines. It’s about establishing and nurturing relationships. People who have come to visit us, existing customers or new leads, tell us about their market channels and traditionally ask for sturdy stems, large flower heads and vibrant colours, criteria we can perfectly cater for.”
A lesser but still significant amount of roses sold on the Russian market originate from Colombia with rose farm Jaroma Roses being one of the major suppliers. Owner Jaime Rodrigues Andrade is back at FlowersExpo after an absence of four years. “By the end of 2014 the ruble collapsed causing volumes and prices to drop,” he said. “We are now back on track and slowly growing our Russia-destined volumes from 15 to 20%. However, exporting flowers to Russia is not an easy task, there’s a language barrier and often it is a challenge to cash your money.”
Now in its 9th years, FlowersExpo 2019 was a buoyant show. According to show organisers Ms Grigorieva and Ms Zarubina this year’s FlowersExpo attracted 12,428 visitors with a registered single entry, 18,000 visitors came in twice or more. Both ladies are the face of FlowersExpo and have a proven track record in trade show organising relying on their international network of business contacts. They deserve credits for giving the global flower industry an opportunity to network, learn and…to have fun.
Director Rustam Mannanov from rose farm Gulshan in Uzbekistan told FCI his rose farm opened in 2014 and boasts state-of-the- art Dutch technology. His country is currently transforming into an open economy with room for a private sector-driven economy. Gulshan was built with the help of a private investor who is also active in the potato industry. Mannanov says, “Uzbekistan is an emerging market with over 30 million inhabitants who have a clear preference for long stems and large headed roses.”
In the past, the country was heavily reliant on import roses from Ecuador. “Our company has now fully substituted the market,” he says while pointing to a wide range of 50 different rose cultivars in his stand, bred by a variety of Dutch breeders. “They were harvested two weeks ago. Look at the quality and judge for yourself,” says Mannanov, who sees his presence at FlowersExpo as an excellent opportunity to shake hands with his Russian customers from, for example, Omsk and Samara. Uzbekistan shares common floral holidays with Russia but additionally has its own flower-sprinkled Now Ruz celebrations; the Persian new year that heralds the arrival of spring on March 21. “However, in Uzbekistan there is no comparison to the Russian fondness for flowers,” Mannova notes.
Russian rose growers use high pressure sodium fixtures to promote crop growth and yield. However, Wilco Verkuil and his colleague Marjon van Kralingen say that it is with great interest that the Russian rose farms follow the different LED lighting trials at Dutch rose farms and research institutes. The value which LED lights deliver has been carefully weighed but, so far, they prefer HPS lamps as these generate both light and heat.
Danziger’s new Gypsophila variety ‘Inzignia Cloud’ featuring sturdy stems and large, ‘cushion-like’ flowers with an excellent shelf life was awarded FlowersExpo Gold Medal in the show’s new flower and plant awards. This new Gypsophila is the fruit of an exclusive collaboration between Danziger and Ecuador-based growers Florsani, Florequisa, MuchFlowers and Malima. The second Gold Medal was awarded to Petunia ‘Queen of Hearts’, which star is rising the global Petunia market.
Benary showcased its newest said-raised bedding plants.
Russia: a nation of flower aficionados.