How the global floriculture industry is emerging from the pandemic

FloraCulture International had a conversation with Sylvie Mamias, Secretary General of Union Fleurs – the International Flower Trade Association, to take stock of the past two years and look at what challenges and opportunities lie ahead for the international floriculture value chain.

Union Fleurs is the international umbrella organisation representing and promoting the interests of national associations and companies active in the floricultural trade, including cut flowers, cut foliage and potted plants. Union Fleurs was founded in 1959 in Brussels and now has members in 20 countries worldwide, spanning Europe, Africa, Middle-East, South and North America, and Asia.

Within its membership, Union Fleurs gathers over 3,000 companies worldwide. Members account for more than 80 per cent of the total value of the worldwide trade of cut flowers and potted plants. The Union Fleurs Board of Directors is composed of Richard Fox, President (Kenya Flower Council); Frank Zeiler, Vice-President (BGI / Germany), Matthijs Mesken (VGB / the Netherlands), Augusto Solano (Asocolflores / Colombia), Peter Larsen-Ledet (FloraDania/ Denmark) and Paolo di Massa (ANCEF / Italy). Sylvie Mamias has been Secretary General of Union Fleurs since 2011.

FCI: We are now two years from the start of the Covid-19 pandemic, which caused massive disruption to the global floriculture industry. Where are we now, and what have been Union Fleurs’ major achievements in helping the sector navigate the rocky waters of this global health crisis?

Sylvie Mamias, Secretary General of Union Fleurs – the International Flower Trade Association. Photo: Saskia Vanderstichele.

Sylvie Mamias: “The international floriculture industry has been an outstanding example of a highly integrated global supply chain making a very significant socio-economic contribution to developed and developing economies worldwide.

Increased globalisation has driven greater efficiency in the supply chain. It has stimulated efforts across the floriculture industry to ensure businesses are socially and environmentally responsible.

But it is precisely because of this intrinsic interdependence that this industry suffered during the worldwide escalation of the Covid-19 pandemic. The build-up to the first peak of the pandemic and the consequent strict lockdown measures implemented across the globe triggered an unprecedented and massive ‘domino effect’ throughout the floriculture supply chain.

However, after the initial shock, the floriculture industry demonstrated its resilience with a steady upturn in sales throughout 2020 and 2021. This uptake was thanks to consumers rediscovering the importance of having flowers and plants in their daily lives. Although some segments of the industry, particularly hospitality and events, have continued to suffer due to restrictions on public attendance adopted in most countries.

During the initial stages of the pandemic, Union Fleurs’ activities focused on three main strategic areas. Firstly, to give visibility to governments and policymakers on the specific challenges the ornamental supply chain was having to deal with in its globality due to the implementation of lockdown measures and the sudden closure of supply chain linkages and sales outlets. Secondly, to stimulate cooperation across the representative organisations of the supply chain to work together; and thirdly, to promote the sense of wellbeing that floriculture products can bring to a society spending a lot of time in lockdown.

Union Fleurs, with its unique and comprehensive cross-sector supply chain profile, was able to secure, together with a coalition of national, European and international organisations representing the various segments and sub-sectors of the ornamental industry, the attention of policymakers to create awareness of the specific needs and unique challenges of the sector during the Covid-19 crisis. A unique survey carried out with members across the EU revealed estimated losses of 4.12 billion EUR for March and April 2020 arising in 17 EU countries across the four sub-sectors of cut flowers, potted plants, bulbs and nursery stock, accounting for close to 10 per cent of the annual total EU market value.

National governments’ lack of coordinated action, with only a few countries granting direct financial support to the sector or other meaningful measures such as classifying the sector and sales outlets as ‘essential’, demonstrated governmental intervention’s limitations. It also triggered discrepancies that have substantially impacted the functioning of market structures and sales channels.

The major supplying countries in Africa and South America faced immense logistical challenges resulting from a sudden and substantial decline in demand. Consequently, a reduction in scheduled flights and reaction by international cargo operators to re-allocate their services to the movement of goods related to the pandemic efforts continues to be recognised to this day.

One of the very tangible lessons of the Covid-19 crisis has been the importance of cooperation and collective work throughout the supply chain to increase the visibility of the sector and address challenges as they arise.

Sylvie Mamias says: “Further educating consumers on the dynamics of the floriculture supply chain has its value as it helps them make informed choices. But it is not to say that value-based or ‘moral’ assumptions should drive the market.” Photo: Saskia Vanderstichele.

A straightforward result of this collective work has been unlocking an emergency budget by the EU of about two million EUR for the generic promotion of flowers and plants to consumers. It was activated in the pan-European campaign Shine On carried out in the Spring of 2021 by a consortium of our members across several EU countries.

This campaign highlighted the benefits to wellbeing that flowers and plants bring to our daily life. Joining forces across the industry to sustain the consumer market and make it grow as a whole ultimately positively benefits all operators along the supply chain. This message is an important outcome from the past two years that the floriculture industry should take on board and continue to stimulate, and where trade associations at national and international levels have a crucial role to play going forward.”

Recently released reports (AIPH & Union Fleurs International Statistics Flowers and Plants 2021; Rabobank World Floriculture Map) shows a fairly overall stable pattern for the main floriculture markets despite the effects of the pandemic. Therefore, the big picture demonstrates the resilience of the floriculture industry, but what about the impact of several internal and external factors that may influence the industry’s performance going forward?

“As we hopefully begin to exit the pandemic, the industry must recognise the areas of vulnerability in the supply chain and the irreversible consequences that the pandemic has imposed on the industry.

Beyond the pandemic, the climate change imperatives and the increased scrutiny from society, consumers and governments on sustainable supply chains will continue to be high on the agenda. International supply chains must address inconsistencies, and businesses must continuously question and optimise their ways of operating if they wish to maintain their licence to operate.

The continued geopolitical tensions and trade frictions worldwide combined with a growing regionalism, rising temptations of protectionism, and increased pressure from plant health and biosecurity concerns in some key destination markets are issues that the floriculture industry cannot ignore. These are the new realities, whereas economic imperatives and the globalisation agenda largely prevailed in the past. Market fragmentation and the more complex market access conditions that result from this new global ecosystem can seriously disrupt the viability of international supply chains, create imbalances in the previously established level playing field and impact the seamless flow of products along the chain.

The volatility of exchange rates and the threats of economic recession and inflation also cast potential shadows on the perspectives for floricultural consumption in the years to come. After all, consumption of flowers and plants has traditionally demonstrated elasticity and is directly linked to economic development and disposable income per capita. Has this paradigm now changed with the impact of the pandemic on national economies? How can the industry seek to build on the formidable sales of 2020 and 2021? The upturn in e-commerce and online flower delivery services has been one of the remarkable developments observed during the pandemic. It will be interesting to see if their growth can be maintained. How they will potentially impact logistics and traditional routes to the market, and whether they have created additional demand by bringing in new categories of consumers or taking market share from conventional outlets. How can these platforms be used to encourage the younger digitally-driven generations to buy more floricultural products?”

From the onset, Covid-19 caused delays in several merger and acquisition processes, but economists say that M&A activity has rebounded. What is the situation in worldwide floral?

“Internally, the floriculture industry is being faced with increased costs at all levels, resulting from the inflationary pressures on logistics, shortage of freight capacity and increased energy costs. In the past two years, the increase in market prices does not sufficiently compensate for the higher costs level to ensure profitability and continued investment. The rise in digitalisation, both within internal supply chain processes and at points of sales, also requires standardisation and high levels of investment. These external pressures certainly partly explain the current trend of consolidation of businesses and enhanced vertical integration that were started before 2020 but which have greatly accelerated with the pandemic.”

What can you tell us about the coronavirus’s impact on supply chains and logistics?

The pandemic has reignited the interest in sea freight as a viable alternative for some types of products.

“The pandemic has highlighted the vulnerabilities of the traditional reliance on airfreight from the major producing areas in Africa and South America. It has reignited the interest in sea freight as a viable alternative for some types of products. To benefit from the cost and environmental advantages of sea freight will require adjustments to how traders and markets manage their supply bases from the hitherto just in time benefits offered by airfreight. Developing alternatives to single-use packaging materials and industrywide solutions for plastic trays and pots used in the flower and plant supply chain are also underway. Those various initiatives require a level of standardisation to avoid unnecessary duplication and market fragmentation and sufficient investments, capacity, and consensus for the market uptake to be successful.

Union Fleurs has an essential role in all these developments as they are closely related to the key objective of the association, namely facilitating seamless markets and trade. We can positively contribute by raising awareness, anticipating regulatory or reputational issues and facilitating dialogue within the industry. By bringing together industry players from our membership and wider network, we can collectively explore how to embrace changes and address issues and challenges responsibly, coordinated, and participative. With our members, we can seek to optimise and shape the enabling environment to benefit the floriculture value-chain, but we cannot enforce market solutions; they remain in the hands of industry players and require consensus at the market level to be successful.”

What is your take on the growing connection made in the public opinion between the sustainability agenda and local-for-local sourcing?

“The Covid-19 pandemic contributed to unveiling to the wider public the strong dependence of the floriculture supply chain on international sourcing. That there is now a greater awareness of the intrinsic complexity of the supply chain behind flowers sold in shops or supermarkets is not bad. It fits with consumers’ growing and legitimate curiosity to understand what is behind the products they buy.

The basic assumption that seems to echo in the public opinion is that ‘local’ necessarily means ‘sustainable’ is rather striking. ‘Local’ doesn’t say anything about the sustainability of a flower or a plant, neither on its production methods nor on its overall environmental and socio-economic performance nor its value at the point of production. It simply indicates that products have grown closer to where they are sold and implies that the steps along the value chain are shortened and the number of intermediaries reduced.”

Does it mean that it is better than sourcing flowers or plants from other production places in Europe or beyond?

Claiming that imports are detrimental does not give justice to the reality of the modern international floriculture industry and the socio-economic contribution it brings to producing countries in Africa and South America, which are prime examples of economic development through diversification and international trade.

“Not necessarily. Mode and length of transportation are only two of the many elements that contribute to the environmental footprint of a product. It is essential to look at the complete cycle of production and supply to get the actual full picture of the environmental impact of a product. Life Cycle Analysis (LCA) models help identify and quantify these variables along the chain from production to final disposal. This reason is why Union Fleurs has engaged since 2019, together with other industry stakeholders and organisations, in the development of the FloriPEFCR methodology, a voluntary sector-led effort focused on the development of an environmental footprint methodology adjusted to the specificities of flowers and plants. Once finalised, it will pave the way for a consistent, comparable and verifiable approach to measuring the environmental performance of flowers and plants as a product category. The FloriPEFCR, based on internationally agreed standards and references, will benefit from the official validation of the European Commission, which will facilitate its acceptance as the required norm in the future at both EU and international levels.

Responsible sourcing has grasped the attention of the international flower supply chain for many years, and operators have not been sitting idle to take stock and adjust. Many initiatives have been fostered, such as the multi-stakeholders Floriculture Sustainability Initiative (FSI), to precisely stimulate greater transparency and accountability regarding the respect of acceptable internationally benchmarked environmental and social standards across the floriculture supply chain and wherever the place of production. These initiatives also push for a greater share of responsibly produced and traded flowers and plants on the market, more and more with the help of structured data and reporting and effective measuring tools. Operators themselves have fully integrated these requirements in operating and sourcing flowers for retail or flower shops.

Flowers and plant assortments put on the market are usually the results of optimising the responsible sourcing available throughout the year and the seasons to offer the best of locally and internationally produced flowers and plants as they are available.

Further educating consumers on the dynamics of the floriculture supply chain has its value as it helps them make informed choices. But it is not to say that value-based or ‘moral’ assumptions should drive the market. Claiming that imports are detrimental does not give justice to the reality of the modern international floriculture industry and the socio-economic contribution it brings to producing countries in Africa and South America. These are prime examples of economic development through diversification and international trade. There is space for everybody on the market in a complementary way rather than antagonising one origin against the other. Joining forces to address inconsistencies or weaker points along the supply chain will prove a more constructive strategy for all operators. Instead of discrediting a whole industry and limiting the actual market update of sustainable flowers and plants by pointing fingers and making unsubstantiated and unverified claims.”

Any final thoughts to share?

“If there is one thing that we have all had to learn with the Covid-19 pandemic, it is to deal with uncertainties and adapt quickly to changes. The floricultural value chain is no different. All industry players’ entrepreneurial and innovative capabilities across the floriculture value chain have been heavily tested in the last two years and will continue to be challenged. But the floriculture industry has also shown its immense resilience and capacity to rebound through uncertain times, adjust to rapid changes and capture new opportunities. The interdependence and partnership that define this industry will greatly contribute to its continued strength in overcoming the numerous collective challenges still ahead. All walks of the supply chain should keep joining forces to recognise those challenges and work on them together in a pre-competitive manner. Embracing changes proactively and responsibly will ultimately stimulate collective growth that will benefit everyone in the floriculture industry and beyond. The challenges laying ahead of this industry are not small, and it must remain vigilant and keep demonstrating its case with reliable data to withstand misperceptions. Greater transparency and accountability will ultimately benefit everyone in the supply chain. It’s all about being part of the solution, not contributing to problems.”

More information on Union Fleurs – the International Flower Trade Association is available at: www.unionfleurs.org

This article was first published in the April 2022 FloraCulture International.

↑ Back to top