It’s been another wild, crazy and fascinating year in the floriculture industry. We’ve seen ground-breaking improvements in the science of flower farming and breeding, money- and time-saving evolutions in shipping and packaging ideas, and, perhaps, most of all, continued changes in how flowers are purchased and delivered.

According to the “U.S. Floral Gifting Market – Industry Outlook and Forecast 2018-2023,” by Research and Markets, it’s a rosy outlook for the industry. The report finds that the U.S. floral gifting market is expected to reach values of around $16 billion by 2023, climbing at an average rate of more than 6 percent each year.

So what’s next in 2019? In our fast-paced constantly changing world, we asked industry leaders to give us their thoughts on what’s next in the flower industry.

CHANGES COMING IN OUR INDUSTRY 

Farbod Shoraka, co-founder and CEO of BloomNation, an online flower marketplace based in Santa Monica, Calif., predicts that we will see a lot of consolidation on the retail side and a clear movement into the “studio production” model. “There will be more and more florists who set up shop in a production studio with no retail presence, putting their entire focus into e-commerce. Cheaper rent, less overhead, less spoilage and more margins,” Farbod says.

Alex Frost, founder of QuickFlora POS, a technology and marketing services provider for retail florists, based in Ft. Lauderdale, Fla., says that continued improvements in the way perishable products from nontraditional companies (such as Amazon and direct shippers from outside the United States) are delivered are sure to open up new options for consumers.

Outsourcing and specialization are the most significant changes our industry will see in the next two to five years, according to Bisser Georgiev, founder and CEO of LiveTrends Design Group, a specialty plant décor company in Apopka, Fla. “I believe that each sector of the industry will become more specialized in one or two key areas. A company simply cannot be great at everything, and if it tries, it will deliver mediocre results. The future will belong to companies who will excel at one or two key areas and have the ability to coordinate global supply chains of key partners.

Diana Roy, flower farmer and creative director at Resendiz Brothers Protea Growers, says that how future style trends come about and how they are influenced will be a big change. She feels that the major influencers will no longer be the big companies with the most advertising dollars. “It will be the smart, savvy, creative designers, retailers and farmers – or a group of them all – who aren’t afraid to share their knowledge and unique products in every way possible who will be the influencers,” Diana says.

CHALLENGES FACING OUR INDUSTRY

Challenges are a part of life. We all have them, and we all do our best to overcome them. Alex Frost says that one of the biggest challenges he sees is in the ability of retailers to deliver flower products the same day. He sees that smaller stores are not able to keep up with companies such as Amazon and Target and can be reluctant to change the way they have been doing business for decades.

“The traditional retail florist must embrace a new way of servicing retail customers with better and faster customer service and technology,” Frost says.

The “U.S. Floral Gifting Market” report foresees that innovations in delivery models and leveraging digital platforms to attract more consumers will positively impact purchasing decisions and drive sales in the market. The demand for bouquets and DIY concepts will create new opportunities for leading vendors in the U.S. market, the report states.

On the import and wholesale side, Tim Dewey, vice president of procurement, quality and e-commerce at DVFlora, a wholesale supplier of cut flowers and supplies, based in Sewell, N.J., says that one of the major challenges is the lack of capacity available to transport product from South America to the United States. “What is needed is more freight capacity to transport flowers from these regions,” Tim says. “Another option would be an increase in [the size of] shipping container volumes.”

Farbod Shoraka sees that flowers are being replaced with other goods by companies like Amazon and Postmates, and this is a huge challenge in the industry overall. “Flowers used to be one of the only things you could have delivered the same day or next day, so they were the perfect last-minute gift,” says Farbod. “Now consumers have a ton more options in terms of what they can have delivered in a matter of hours.”

Bisser Georgiev acknowledges the challenges of transportation, politics, tariffs, labor rates, but he believes our industry’s most important challenge is not fully understanding consumer behavior and demand. “We operate in the largest economy in the world with the highest income levels in years, and, yet, the consumption of flowers and plants is still lagging behind the rest of the world,” he points out. “We all need to invest in finding out what exactly people want, when they want it and why they want it. This will lead to innovations that will make our products and services attractive to a much larger base. We need to refocus our strategies from “needs” to “wants,” which deliver much more desirable products with emotional value, higher prices and better margins.

One important issue that is often overlooked in the U.S. is how flowers are perceived. “Flowers are considered by many as a gift item or something designed for special occasions, basically a daily nonessential,” Diana says. This mind-set obviously has a big effect on sales, funding, lawmaking and every aspect of the industry. “Flowers bring joy to peoples’ lives and make them happy. That message needs to be replayed over and over again,” Diana continues.

SOCIETAL AND CULTURAL TRENDS

As for current societal and cultural trends and how they may affect the industry, Alex Frost says, “As fresh flowers become more of a lifestyle product, as they are in many European countries, the total market for flower consumption may double or triple in the next decade. People love flowers; they need better reasons – quality, price and convenience – to buy more flowers every week.”

Farbod Shoraka agrees. “With the growth of social media, flowers will become more and more in fashion. People are sharing photos of their gifts and home décor more and more often, which often include flowers and plants. This exposure should drive our industry forward as long as we continue to push the design aesthetic forward.”

Trends such as urbanization, smaller living spaces, renting and aging are driving the demand for smaller, long-lasting products, offers Bisser Georgiev. “At the same time, consumers’ hyper-awareness of design, fashion and color trends are leading them to look for products that have a designer feel and look. The DIY is being replaced with MIY (make it yourself); it is much sexier, crafty and Instagrammable.” Georgiev adds that e-commerce will continue to play a huge role in when and why people will buy floral. Convenience will replace low price, and innovation will replace efficiency, he projects.

Tim Dewey sees that with a boom in the economy and the transition of millennials back to the cities, coupled social media and other Internet marketing, we are seeing an increase in interest in the floral and plant category. “Everyone I have spoken to in the last year at the wholesale level has mentioned the increase again in green plant sales.”

And speaking of millennials, the industry is indeed facing a generational shift. According to a survey this year by Greenhouse Grower, many growers and retailers are retiring or closing their doors. In the survey, several say they’ll be retiring in the next two to three years. Only about half of growers report that they have someone ready to take over for them, so we may see the shuttering of even more businesses by 2020.

MAJOR TRENDS

Farbod Shoraka says that preserved roses have exploded in popularity, and that fiddle-leaf fig (Ficus lyrata) plants have grown in admiration as many blogs and fashion/interior design magazines have pushed this plant onto consumers. “As far as hard goods,” Farbod says, “we are seeing a lot of the hat-box designs as well as acrylic boxes.”

Diana Roy believes that consumers are looking for new, unique and special flowers and foliage like Proteas, vines, branches, Kalanchoes, and new types of amaryllises and bulb flowers.

As far as plants, the terms “new” and “unusual” also apply for both houseplants and landscape plants. Exotic plants that are compact and easy to care for, and that are suitable to smaller spaces, will be in demand. Nurseries and garden centers will be offering a more extensive array of cacti, proteas and Australian wildflowers, especially in parts of the country where they can be grown in pots or in landscaping.

CONSUMER PURCHASING OPTIONS

Alex Frost feels that the advent of 24-hour intelligent automated kiosks linked to local delivery options for perishables will dramatically increase flower consumption in ways we can’t imagine today. “These new types of kiosks will lower costs and increase quality for consumers across the board,” he says.

Tim Dewey agrees. He finds that in the mass market, more people are making daily purchases of flowers. As flower shops evolve to a more millennial model, with younger owners who have new, fresh ideas, this will only increase. Mass-market outlets that do a good job with their floral programs will reap these rewards.

Farbod Shoraka foresees that consumers will make more and more purchases online, which will cause some florists to thrive (those who focus on their e-commerce now) and some to fail if they’re too late to adapt.

“I see the new ways of purchasing as very positive,” Diana Roy shares. She says that young consumers want quick and easy ways to purchase the items they’re looking for. Online purchasing allows them to find what they want more easily and gets it to them or their chosen destination faster and fresher.

PURCHASING CHANNEL GROWTH

As the mass market begins to push further into arranged flowers, this will continue to erode advantages that local brick-and-mortar flower retailers have presently. It started with order gatherers by phone, moved online, and then expanded to overnight shipping, and now we will see the mass-market players leverage omnichannel retail to expand mass-market sales to levels unimaginable today.

“Remember, 30 years ago supermarkets sold zero flowers,” Alex Frost points out. “Today, 23,000 outlets sell more than 6 billion stems a year. That number could quickly go to 10 or 15 billion, as all these factors converge at the right time.”

Bisser Georgiev expects the most significant growth in 2019 will be in the mass-market segments. “Grocery retailers are becoming better and better with this category,” he notes, “and many of them recognize the draw value of well-designed products that have instant draw effect on purchasing.”

Farbod Shoraka predicts that online will have the strongest growth as consumers are shifting online at a macro level. He shares that BloomNation’s model is built for this movement and its focus on e-commerce will empower the florists who leverage that platform.

Diana Roy believes that if we are creative, fun, computer savvy, and willing to constantly update and refresh, we can continue to develop a strong online platform that will draw wholesalers, retailers and consumers. “The sky is the limit,” she says.

THE GROWTH IN ONLINE PURCHASING

Alex Frost notes that QuickFlora is seeing more and more clients merging their point-of-sale, website and inventory control systems to maximize sales and minimize waste. He believes this trend will only continue and put smaller retailers at a considerable disadvantage.

At BloomNation, online purchase growth has allowed the company to help more and more florists with their technology. They give local florists a custom-tailored e-commerce experience, powering independent websites, handling all their retention marketing (e.g., email marketing) as well as giving them new online revenue channels. “We are positioned to help grow all the local florists we power websites for,” says Farbod Shoraka.

“The growth of online purchasing has had a big effect on our Protea sales,” Diana Roy shares. She believes that despite Resendiz Brothers’ consistent marketing efforts, there are still many wholesalers and florists throughout the U.S. who do not purchase proteas on a regular basis or consider them an inventory staple. When Resendiz Brothers gets calls from consumers who want to purchase proteas, there are often no outlets in the consumers’ cities for Resendiz Brothers to recommend. “So, we created TheProteaStore.com, where consumers can purchase proteas online,” Diana points out.

THE EFFECT OF U.S. AND INTERNATIONAL ECONOMIES IN 2019

Economically in 2019, Bisser Georgiev says the consumer price index will continue to rise. “It’s inevitable. The new tariffs on many packaging materials used in the floral industry will increase costs by around 20 percent,” he suggests. “The cost of capital, transportation, and labor also are going up. All this leads to inflation and eventually to economic slowdown. Higher retail prices and a slower economy will lower demand for our products. The good news is that our industry generally does well in times of recession: We still offer an affordable luxury that people can enjoy in gloomy days.”

Offering a slightly different opinion, Farbod Shoraka predicts that 2019 will be a strong, prosperous year. “I am highly optimistic that consumer spending will continue in a big way,” he offers. “When it comes to the U.S. economy, if something does not change with labor and labor costs, farming will become more and more difficult,” relates Diana Roy. That could mean higher wholesale and retail prices and, possibly, some less financially secure farms going out of business or being absorbed by competitors.

Internationally, Alex Frost predicts that the continued expansion of new growing regions, such as Kenya and Ethiopia, and improvements in ocean shipping will dramatically lower flower prices for consumers in the next decade. He notes that in 2017, there was one ocean container with fresh flowers from Colombia to Miami each week, and this year, there are 15 a week. This will only continue to rise due to the increases in air cargo shipping rates, and eventually, there may be hundreds of containers per week from China and Africa hitting the U.S. ports, Frost says.

EMERGING MARKETS

Alex Frost states that the flower market in China is growing dramatically and will soon exceed the U.S. flower market in size. “Growers without a presence or partnership in China will be at a significant disadvantage,” he says. “Once the Chinese refine the cold-chain export process as it relates to ocean shipping, they will begin to dominate the world market for flower stems.”

Farbod Shoraka adds that technology is enabling growers and manufacturers to sell direct more easily, which he says will become a bigger part of their businesses in the coming years.

Reprinted with permission from super floral magazine, Vol. 32, no.12.