‘Production always comes first’

The Kunming branch also supplies more than 12 million tulips this spring, next to cut Anthuriums, cut Hydrangea and Gerbera.

Fourth-generation grower Arie van den Berg from Van Den Berg Roses in the Netherlands and China-resident expert, Nic Pannekeet began a rose farm in Kunming, China in 2007. Despite the vagaries of the Chinese market, the enterprise of these two  Dutch pioneers is growing strong. FCI sat down with Arie van den Berg in his home town Pijnacker to get the full story.

The Van den Bergs have deep roots in horticulture.

Hanging on the walls in Van den Berg Roses’ headquarters in Delfgauw is a collection of faded black and white photographs of yesteryear. Long-gone grandparents, snapshots from uncles and other family members, pose stiffly for the camera, wearing a flatcap on their heads, their feet snuggled in the quintessential Dutch wooden shoes. The overall atmospheric settings are overwhelmingly ‘horticultural’ with producers proudly standing between their  vegetable and flower crops.

The photos tell visitors the story of four generations of Van den Bergs who all earned their living in horticulture, growing vegetables in the open field or cold frames in the first decades of the 20^th century, swapping edible plants for cut roses in 1975.

Continuing his father legacy

Arie van den Berg recalls his earliest moments working for the family business, disbudding and sorting roses, using a Jamafa machine. “From the day I started walking; I was out there in the greenhouse with my dad. We grew quite an extensive range of roses including ‘Motrea’, ‘Madelon’, ‘First Red’ and later also ‘Red Berlin’. 2001 marked the year we first started growing ‘Avalanche+’ which proved to be one of our most successful cultivars ever.”

Arie, now aged 41, is the current owner of the company when he took over his father’s business in 2007. Van den Berg Roses is a 16-hectare rose farm in Pijnacker. It is entirely devoted to growing large-headed rose varieties such as ‘Avalanche+’, ‘Avalanche Peach+’, ‘Avalanche Candy+’, ‘Avalanche Pink+’, ‘Avalanche Clarence+’, ‘Miss Piggy+’, ‘Sophia Loren’, ‘Jumilia’, ‘Buttercup Layla+’ and ‘Myllena’. Adding to the growth of this Dutch business, are large scale rose farms in Kenya and China.

Van den Berg continues his father legacy and shares the same passion for the technical aspects of flower growing with production “always coming first”.

But every age has its thoughts, ideas and values. Back in the 1980s and 1990s, father Thijs was a typical ‘clock grower’ at a time when there was still limited interaction between individual buyers and selling growers and a fair deal of anti-import sentiment among Dutch growers. The next generation of growers quickly realised that they could impossibly close themselves off from international trade flows, and was more ready to participate actively in the global economy in an increasingly borderless world.

Opportunities galore

Arie van den Berg.

As such, Van den Berg’s announcement in 2007 of the introduction of a new rose farm to emerge amid the rice fields in the Chinese city of Kunming came as little surprise. “Two years before, I had embarked on a trade delegation to China when I met with Aalsmeer-born Nic Pannekeet who had been living and working in China for quite a long time already,” Van den Berg notes.

He adds, “Nic, is fluent in Chinese and has built up an extensive network working as a sales agent for Dutch flower breeders such as Anthura. His many years of flower trading experience gave me valuable insight into the Chinese market, where I saw more opportunities than challenges for serving local customers.  Labour costs were a lot cheaper, and no professional flower farm was serving this giant market. We had been growing roses for more than 45 years and began to operate in Kenya in 2004. In China, I saw another opportunity to increase our portfolio of growing regions.”

What followed were several other trips to China to find out about the different climate zones, business culture and the best locations for commercial flower growing. Back home, a consultancy firm helped Van den Berg secure PSOM government funding. This funding resulted in a €1.5 million flower farm in Kunming with half of the investment subsidised by the Dutch government and with Pannekeet and Van den Berg owning each 50 per cent of the company.

Trial and error

They started the business in a 3.5 ha poly hoop houses on leased land from the government; however, cultivating roses in Kunming was initially trial and error. Market pioneers develop first-mover advantages, but are also confronted with the trivialities of daily life. Van den Berg recalls, “Trying to decode the Chinese labels on fertiliser bags and learn more about the market availability of crop protection products.”

Business-wise the China branch is the most complex, he says, but it has proven itself and is providing a fair return. “Overall business growth is accelerating. The customer base, the market presence and the organisational structure are clear with three Dutch managers reporting to the two Dutch owners, and there’s a pool of 425 workers among which are very valued collaborators.”

Over the past 13 years, Van den Berg Roses Kunming has added a lot of ornamental crops, some of them successful, others not. He explains, “Currently, we operate from 35ha of plastic greenhouses across two sites, of which 30ha we devote to growing cut roses. In addition, we will also supply millions of tulips this spring, next to cut anthuriums, cut hydrangea,  amaryllis and gerbera. Offering such diversified cut flower product began in the company’s first years of operation when the market was in its introduction phase. Demand was not always apparent, and the industry was highly fragmented. The decision of ‘putting not all eggs in one basket’ was a practical one and helped us to boost business. Now more than a decade later, the industry is slowly but steadily maturing and specialising with some pioneering companies like ours achieving economies of scale and requiring larger volumes of roses and tulips. Meanwhile, we chose to specialise entirely in cut flowers We stopped production of potted plants such as anthurium and spathiphyllum as their market dynamics is altogether different with the epicentre of production in Guangzhou, near Hong Kong.”

The Westland of China

Kunming is the capital of Yunnan sheng (province), and both city and province are centres of the flower industry, sometimes touted the Westland of China. Van den Berg says that although the region isn’t the World’s most ideal growing spot for cut flowers – if such places exist – its climate is one of the best in China and Asia alike.

“Rising between 1,600 and 1,900 above sea level, our two production sites enjoy warm days and cool nights. At such altitudes, the summer is hot, but winters are cold, forcing us to heat the greenhouses. Monitoring and maintaining adequate heat and ventilation during winter are crucial in managing botrytis. And gives us a competitive advantage to local farmers.”

Same latitude as Cairo

The announcement in 2007 of the introduction of new rose farm to emerge amid the rice fields in the Chinese city of Kunming came as little surprise.

In line with Dutch and Kenyan production methods, Van den Berg Roses Kunming grows its roses hydroponically with self- produced young rose plants planted onto raised gutters filled with coco peat from Sri Lanka. Water from a nearby river is the primary water source for irrigation. Irrigation water is recycled using gravel filtration and UV systems. The reuse of water is not only beneficial for the environment but also impacts on operating costs.

The greenhouse structures, with a 6 metres post height, are made in China. In contrast, the essential running equipment such as greenhouse control computers, gas heaters, vents and valves and pipe paint and cultivars come from the Netherlands. Inside the greenhouse, 45 mm tubes serve to heat the greenhouse and to guide harvest carts.

Since last year, plastic pipes delivering CO² to the rose crop have been in place. It is delivered in liquid form and stored onsite. Van den Berg admits, “It would be cheaper to use the flue gas from the gas boiler, but we only heat in winter and CO² is needed all year round.”

In terms of lighting, Van den Berg is happy that Kunming is more or less at the same latitude as Cairo and so it is bathed in natural light. “Naturally, additional lighting helps to increase yields. However, in Kunming we would need only the fifth of the hours needed in Holland with light demands mostly limited to November, December and January, making it difficult to gain profitability.”

There’s no single Chinese consumer profile

At Van den Berg Roses Kunming, the large-headed roses from Dümmen Orange rule supreme. “Ours is a selection of thirty European rose cultivars, among which are spray roses, mostly creations of Dutch breeder Interplant.”

Van den Berg acknowledges there are issues regarding the protection of plant variety rights, and there is a sizeable number of PBR protected varieties in China, but many are royalty-free. He says, “I trust Dutch breeders are adequately addressing these problems.”

Van den Berg talks about consumer preferences in Europe versus China; they may not be dramatically different with ‘Avalanche+’ being a firm favourite worldwide. He says, “This rose has a high yield in summer and winter, excellent shelf life and transports well over longer distances. The same applies to the blood-red ‘Hot Blood’ rose from Dummen Orange. There is no single Chinese consumer profile. The only difference I note is colour demands for the  pink and pastel tones are stronger in China.”

Wholesalers, bouquet makers and florists make up the company’s customer base. However, according to Van den Berg, wholesale in China has a different significance compared to Europe. He explains, “Trade flows are much more direct with fewer middlemen.”

It is no secret that China’s digital economy is rising and Van den Berg attributes a growing percentage of the company’s turnover to income from online sales. He says, “Our online store offers a group of 2,000 florists the possibility to order 24 hours a day, and in the future, we expect more and more business to happen online. In a vast country such as China, the logistical infrastructure is a challenge. “We deliver the flower under Ex Works from Douan to the airport of  Kunming with the customer organising and paying their transport.”

Unfortunately, it is hardly possible to secure the integrity of the temperature-sensitive flowers during transportation. A current logistical problem Van den Berg regrets, “Up to 99% of our customers don’t have a cold room. Roses are dry-packed in boxes as in Kenya. Yes, it can be frustrating that as a company you live up to the highest quality standards, and in the end, your product end up in rather untidy flower markets.”

Retail sales

Colour demands for the pink and pastel tones are strong in China.

Van den Berg casts scorn on programmes designed to drive floral export sales to China, such as Royal FloraHolland’s 2015 World Flower Exchange. He says as a long-time member of the cooperative; he finds it somewhat weird that neither board members or programme-makers ever approach him to share their plans or to participate. “Occasionally, we met in Shanghai but they never asked me in what ways this programme could help me nor did they explain its value to my business. The costs of the entire exercise must be equal to its benefits. For me, the World Flower Exchange is an example of window dressing designed to divert attention for the serious challenges the auction faces. And that’s too bad as the Chinese market undoubtingly has growth potential, especially in terms of retail sales.”

When asked why so far very few Chinese supermarket have ventured into the sales of flowers, Van den Berg says, “I believe it all boils down to logistics. In Germany, for example, you’ll easily find a large number of different supermarket stores in a 35km radius while in China supermarkets density is not so high, and procurement challenges bigger. Here, the procurement systems and logistics are less developed and not as centralised as in Europe. More recently, we started a trial with a big box store selling mono bouquets of roses and tulips. There was interest in them, so I guess sales have been pretty good so far. However, it’s still too early to say something about the outcome. The good thing is that we have two production sites on different altitudes with the lower one supplying flowers which are ideally suited for mass merchandising. At the same time, the higher location caters for a mix of exclusive and premium quality flowers.”

In 2019, Van den Berg Roses Kunming added 5 ha greenhouses to its business and there are plans to construct another 3ha greenhouse this year.

Van den Berg maintains a pragmatic tone when asked if there are more plans for expansion. It depends on the economy, “The social and economic impact of the coronavirus (COVID-19) is huge with the government ordering companies to temporarily shut down including the flower market in Kunming. Some of our employees are confronted with travel restrictions and are stuck at home. In terms of flower sales, we just had the best January ever, but this February may as well be the worst on record ever.”

Update April 2021: In 2021, Arie van den Berg and Nic Pannekeet sold their China flower farm to long-term business partner Lynch Group from Australia.