While the Netherlands' share in this sector has been under pressure for several years now, the country continues to be the largest player with a 52% share in global exports of flowers and plants. This is also shown on Rabobank's World Floriculture Map 2015 that was presented in conjunction with FloraHolland at the International Trade Fair for Plants (IPM) in Essen, Germany.
As the largest trading platform and knowledge centre, FloraHolland provided valuable input required to draw up the World Floriculture Map 2015. A total of USD 20 billion in flowers, plants and propagation materials were traded worldwide in 2013. For the transport of cut flowers, sea containers are increasingly being used instead of transport by air.
Mapping trade flows
Rabobank and FloraHolland teamed up to create the 'World Floriculture Map', a graph showing all major trade flows for flowers and plants worldwide. Lucas Vos, CEO of FloraHolland, and Ruud Huirne, Director of Food and Agri Netherlands at Rabobank, presented the first copies to Marco van Zijverden of the Dutch Flower Group and Peter Barnhoorn of Afri Flora at the IPM. Along with the map, Rabobank presented a vision on the future of the floriculture sector that has been compiled by Ruud Paauwe, Horticulture Sector Manager at Rabobank, and Rabobank analyst, Cindy van Rijswick:
Global competition
The increase in global competition is one of the largest changes that have come about in recent years in the cut flower sector. Cut flower exports grew in Colombia, Ecuador, Ethiopia, Kenya and Malaysia.
Good-quality cut flowers can be produced inexpensively and on a large scale in these countries. Local cultivation of flowers and plants in growth markets such as Brazil, China, India, Mexico and Turkey is increasing without this leading to major changes in import and export flows.
There are, however, large shifts taking place in a number of import markets. While Japan imported 8% of its cut flowers from the Netherlands in 2003, this figure stood at only 2% in 2013. Japanese imports from Malaysia and Colombia have risen respectively in this period from 10% to 26% and from 14% to 22%. The Netherlands continues to play a dominant role within Europe, with the country still being a key supplier of flowers, potted plants and bedding plants for Germany, France and the United Kingdom.
Consumers' changing buying behaviour
Consumer spending on flowers and plants has virtually not grown over the past five years. There are, however, signs of a shift. Consumers seem to be opting more frequently for lower-priced flowers and plants at supermarket chains or, for example, houseplants at DIY chain stores. Rabobank expects that large chain stores will be able to gain a larger market share as a result of further professionalisation.
Breakthrough in transport by sea
While the transport of flowers by sea container is still under development, the rise of this option appears to be unstoppable. Transport by sea is substantially less expensive than air freight. There is also growing knowledge about how to condition flowers in containers and there are more and more possibilities for monitoring the conditions during shipment.This and increasingly better port facilities and availability of container ships make transport by sea attractive.
Colombia has transported approximately 700 containers of flowers to the United Kingdom alone. Around 300 containers of primarily cut foliage go from Israel to Europe each year. Tulips from the Netherlands are also sent to the United States by sea container.
Outlook for the future
Dutch floriculturists are facing considerable competition worldwide. Rabobank Nederland believes that if businesses want to have a distinctive position vis-à-vis inexpensively produced flowers and plants from abroad, they must focus on niche markets for characteristic local products and seasonal products.
Rabobank suggested that attention would also have to be paid to achieving greater efficiency in the chain, for example through more extensive and closer cooperation. The related aim is for production and consumption to be perfectly aligned.
It says in its theme update on the floriculture sector that an alternative could be to opt for internationalisation, for example by setting up foreign production companies or offering cultivation expertise in emerging production countries.
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