"Colombia focuses too much on US holidays"

"The Colombian flower industry is too much emphasized on the US holidays, like Valentine's Day and Mother's Day. For growers and their commercial networks, these days are good ways to make money as the prices increase sharply. Therefore, many growers increase their production volumes. However, the infrastructure cannot handle these much larger volumes, which often results in low quality flowers that end up in the customer hands. In the worst case, consumers will get an 'almost dead' flower for which they paid around three times as much for as on normal days. Consequently, next year they might look for an alternative to flowers, which will in turn keep the industry from growing and might even shrink. Everybody in this industry gets so dependent on some holidays that when falling on a weekend or if a weather disturbance gets in the way and even without any of the above, business turns into a total nightmare for many of them. The bushes don’t allow them to see the forest."

This is explained by Mauricio Gleiser, B.S. in Mech. Eng., of Vacuum Cooling Colombia, a vacuum cooling system and logistics services supplier who invested almost 20 years in researching the cold chain logistics.

Low quality flowers in USA?
The US consumers are unsatisfied with the flowers they get, as they do not last long enough, but why is that quality feature low in the US? According to Gleiser, this largely has to do with the fact that the industry is attached to those particular holidays. "In general, the quality of the Colombian flowers at the farms level is high and they have reached an acceptably long shelf life, even after transportation. However, during the previous days of those holidays, an extraordinary amount of flowers need to be shipped from Colombia to the US.”

The problem often starts with the grower/shipper
(as stated in White Paper-The cold chain crisis)
The cold chain is extremely important, but is, according to Gleiser, on average not properly managed. "After harvesting, the flowers need to be cooled down very fast to 0-5ºC (32- 41F) and then kept and shipped at the same temperature range to the US. However, the flowers truly arrive to airports (at origin) and are regularly shipped out at an average of 11+ºC which already implies imposing three times their “reasonable damage”, as the respiration (and therefore waste of vase life) grows in higher temperatures. On top of that, airlines must densely pack flower boxes in large lots, about 150 boxes per jet pallet, which results in accelerated respiration (and waste) rates that make quality problems even worse, as the flowers in the middle of the pallets cannot be cooled. According to the White Paper of George Staby and Michael Reid, reprinted in 2013, the flowers that are being shipped to Miami usually lose 20 to 25 percent of their vase life, during such transit.

But turns worse upon holidays
Growers increase their harvests accordingly, but most of the infrastructure remains the same and simply cannot handle the increased amount of flowers on many of those days. So, therefore growers are forced to start shipping their flowers much earlier, like three weeks in advance and in larger amounts, which affects their shelf life. "Given the larger amounts to process at farms and congestion at airports, holiday flowers are often shipped warmer than the “normal” average. Airlines are forced to bring back, from MIA or else, additional (usually empty) planes to cope with demand. Delays and the resulting congestion are everyday issues along the holiday seasons. Airport facilities cannot handle volumes which are threefold (or more)that the regular daily, plus some delayed volumes, along some 10 continuous days. Often, lots of flowers need to be left aka “stored” out of the coolers, or on tarmacs under the sun, since there is not enough cold storage available."

According to Geisler, the waste of vase life easily grows up to 40% or even more, on holidays, and that completes the vicious cycle of the floral model into USA. "The maximum exposure of our flowers to the US market happens upon those holidays. Most of the American consumers only buy flowers on such days (as many as 25-30 more than in any other day in the year) and based on their perception at those moments (“flowers are very expensive and do not last long enough”) they decide not to buy them again, during the year or even for the next year's holiday.”

"In the essence, there is a logistic problem where demand holiday peaks are too far away from everyday valleys and infrastructure proves too weak," says Gleiser.

Poor flower consumption in USA
The USA is the most important market for Colombian growers. Around 75 to 80 per cent of the flowers grown in Colombia are being exported to the USA. From the USA perspective, Colombia is their largest supplier of fresh cut flowers, i.e.: about two thirds of all flowers sold in USA are from Colombian origin. Needless to say, there is a very strong relationship among these countries´ flowers businesses. This prevailing model has had the utmost influence on American consumers´ habits of flower consumption.

According to Gleiser, who quotes PhD´s George Staby and Michael Reid's White Paper III, “Per capita consumption of cut flower in US is low compared to that in many other countries,” “consumption trends indicate the results of selling poor quality crops-per capita sales of cut flowers in the U.S. are low (has stagnated) and may be even declining. There is no doubt that the quality of flowers, by the moment they reach the consumers´ hands, played a large role in it.”

"When looking at research done by Reid and Jian in 2005, the flower consumption per capita in the US lags behind that in other countries. According to them, this is the result of two interrelated problems; a culture of low personal use, and a general dissatisfaction with the quality of cut flowers. According to this research, in the US, flowers largely supply holiday and special events businesses. They say that the sporadic efforts made by the industry to increase sales through marketing campaigns failed because the flowers gave poor customer satisfaction."

This research was conducted more than a decade ago and according to Gleiser, not much has changed in the latter years. "Now, ten years later, Colombian growers are still emphasizing on these particular days, like Valentine's Day and Mother's Day and still the same is happening, year after year. The Colombian peso versus US dollar exchange rate was quite unfavourable for all Colombian exports and that, partly, would pexplain the passivity in this sector to correct the strategic needs.”

Easy changes to turn the vicious into a virtuous cycle
"It is quite clear that the “problem” is the concurrence of a weak cold chain and marketing strategy, highly dependent on holidays. Nobody would want to reduce sales and revenues for whatever the reason. Therefore, the first part of the solution should be intervening into the logistics and infrastructure," says Gleiser. "However, to the contrary, an important effort from the airports side -namely Airplan, concessionary of the Rionegro-Medellin airport, has been (and currently is) facing an extremely tough opposition from some airlines and growers, blocking their plans to upgrade their (horrible) operating conditions. Airplan wants, as already contracted with Aerocivil (the Colombian Civil Aviation authority) to substantially expand the airport´s cold storage area, in order to accommodate holiday volumes."

Furthermore, according to Gleiser, Airplan management expressed their sympathy to the White Paper's recommendations, in order to attend the genuine needs of those growing the valuable perishable cargoes of the region. "Airplan realizes that good products generate increased volumes and higher profits all year around. Opposers argue that the related possible cost increases would not be justifiable for just a few days out of every year. Airplan contends that the airport costs are rather small, if compared to the total cost of flowers, landed in US," says Gleiser. "The cost of improvements to ensure an impeccable cold chain from airport of origin to Miami is about only USD 3 per thousand stems. In this struggle, is somebody shooting themselves in the foot?" he adds.

Industry shrinking
According to Gleiser, the emphasis on these holidays prevents the industry from growing and might even be declining. "As said earlier, flowers are often used in the US for special occasions. Valentine's Day for example, is a very important day that is celebrated with roses. The demand is high and therefore, the prices too. The consumers pay around triple the regular prices. However, what do they pay for? A flower that will not last very long, if at all. So, consumers pay a lot more money for a very low quality flower. Therefore, the chance they will buy anything but flowers next year increases. Moreover, it will also not stimulate the everyday (personal) use at all. Since most people in the US only look for flowers during these special days, they will only have bad experiences. So, during a normal week without any celebrations, there is no reason for them to buy flowers as they can only remember the 'poor quality' flowers they bought last Valentine's Day, for example. Neither would the recipient of such gift, buy similar flowers again.”

Opportunities
Gleiser finds the current situation alarming. "It is such a pity as there are so many opportunities to improve the sector. Of course, the mind-set of the US consumers need to be changed in order to acquire a new culture of consumption for their own use, as years ago happened with coffee, after Starbucks led the value added approach, or Tesco did with flowers in UK, but this cannot be achieved while mostly low quality flowers are being offered to the consumers. So, when addressing the problem, it is essential that growers, hopefully as a class action, invest in ways or techniques to first offer higher quality flowers during these important days. Then, the industry will have good potential to thrive again in the US, at least to reach per capita figures similar to other countries. That could mean selling twice or even three fold the current amounts,"concludes Gleiser

For more information
Vacuum Cooling Colombia LTD
Mauricio Gleiser
Email: [email protected]
www.vacuumcooling.ws