01 June 2022
FCI interviews: Phil Whelan, CEO and founder of MM Flowers – one of the largest suppliers of cut flowers to the UK’s high street in the June 2022 FloraCulture International
Before finding his love of horticulture, he worked for the accounting firm KPMG working in the fast-moving consumer goods, but now he’s ‘fascinated by the complexity of the flower industry and its global, fast-moving activities’.
With a turnover of £250m, MM Flowers, a Cambridgeshire-based company, supplies blooms to several of the UK’s biggest supermarkets, including Marks & Spencer, Waitrose and Tesco. It also serves customers elsewhere in Europe, including The Netherlands, Switzerland and Denmark. In November (2021), work began on a £10m building extension at its headquarters in Alconbury (near Huntingdon) to accommodate the firm’s expanding presence in the digital world.
Phil Whelan: “After completing my history and politics degree at the University of Liverpool I worked for the accounting firm KPMG for six years in the FMCG (fast-moving consumer goods) space. From there, I went to Marks & Spencer (M&S) Simply Foods where I was invited to be a buyer for horticulture. That was when I found my love of horticulture. I was proud to have introduced orchids to M&S when hardly anyone else was considering them. I just knew that orchids were going to be a big business, and so it has proved. Since then, I’ve been fascinated by the flower industry – the complexity of it, its global nature, and the fast-moving events. I’ve got a busy brain, so it really suits me. In 2007 I joined MM Flowers and we’ll be 15 years old in April.”
“Sixty per cent of the flowers we sell we grow ourselves. Three companies own us: a Kenya-based VP Group, the largest flower grower in Kenya; Columbia-based The Elite Flower, the largest flower grower in the world and Spain-based AM Fresh. We have some 300 hectares of production in Columbia, Ecuador, Kenya and Ethiopia, which we utilise to service more than half of our orders. Sixty per cent of our supply is from the equator, 15 per cent from the UK, 18% from The Netherlands, and the balance is from the rest of the world.
Our owners now account for 15 per cent of the global production of flowers. That means that we can be confident in our security of supply, which is a key consideration for any retailer. We also use a blockchain-type model – a continuously updated record that essentially gives the consumer and our clients’ end-to-end transparency for each of the four main traceability aspects – quality, cost, ethics, and environment.”
“The overall demand for flowers is very buoyant. Changing working patterns in some of the world’s biggest flower markets, such as the US, alters consumers’ relationship with cut flowers. People are spending more time in their homes and therefore have more desire to dress them with our products. The industry is also benefitting from a collective desire to seek refuge from the relentless technological acceleration of life. Flowers are a very accessible way to feel reconnected with nature.
This buoyancy is also due to the rising demand for online shopping. We see this in two different ways – the bubble that has been Covid and the underlying demand that had started to increase before the pandemic. We don’t prescribe to the dizzying online shopping growth numbers that some publicise, but we are predicting a gradual, double-digit, 10-20 per cent increase in demand for online purchasing over the next ten years.
For this reason, MM Flowers is expanding its digital presence. We are doing this for two reasons: because of steady, underlying growth in the digital market and, secondly, because of the lessons we learned during the UK’s first lockdown (in 2020).”
“The biggest strain on the sector was when the bricks and mortar market [retailers] reduced their demand for flowers. This was partly because of consumer demand – people were not going shopping – or partly because retailer chains were under such duress (due to consumers’ distressed purchasing habits). Unfortunately, flowers were deemed to be non-essential and therefore deprioritised.
The consequence for us was pressure on production. We already had the flowers, but the market had dipped. It took us between eight and ten weeks to recalibrate the business following the first UK lockdown in the Spring of 2020. And we did that thanks to a combination of a pivot to digital and the acuteness of the retailers’ response to non-discretionary [essential] items settling down. Our strategic conclusion from the pandemic was that we needed to grow our multichannel offer.”
“The digital service will not be an interface for end-consumers – that’s not what we do. Rather, we will provide a platform for our partners (whether they be e-florists or retailers like M&S) to do their digital marketing, and we will fulfil their customers’ orders as per their specifications. In this way, we intend to be able to serve in excess of a million orders for Mother’s Day.”
“Consumer trends over time will pivot the industry that way, but I believe there will always be a robust market for physical retail in the fresh flower space.
There’s still some work to do on the digital value proposition for the consumer. If you buy a £15 lily bouquet, for example, from Tesco, you will get 15-16 fantastic flowers.
If you then transpose this into the digital space, even with some of the more value-orientated digital players, you are probably in the realms of £29.50 to £35. Therefore, I don’t wholeheartedly buy the concept that millions of digital orders a week are the future. If we buy wine for Christmas online, we certainly don’t expect to spend more than we do in-store. The consumer is used to that, but it doesn’t work the same way with fresh-cut flowers. The industry hasn’t quite solved that conundrum yet, but I’m sure we will.”