The USA is by far the most important market for Colombian growers - around 80 percent of the flowers grown in Colombia are exported to the USA, and also about two thirds of all flowers sold in the US are of Colombian origin. No doubt, Colombian supply of fresh cut flowers is intimately related to USA consumers' satisfaction. However, the US flower consumption per capita is still very low when compared to other countries of comparable per capita income and culture and, according to Mauricio Gleiser of Vacuum Cooling, the perception of the low value of flowers among consumers in the US is playing an important role. He is confident that this bad image can change and that the US can therefore become a much larger market.

Potential of USA to grow
In order to depict the potential of change in this industry, Gleiser refers to a study by Michael S. Reid, UC-Davis, 'new strategies…' ,which explained why major supermarket chains in the UK decided to take a stand, regarding the impending entrance of a very big foreign retailer into the UK and and how the locals' defense strategy was implemented.

"The newcomer entered the UK in the beginning of the century and introduced their large volumes and low-cost strategy. In order to keep their head above water, a local supermarket leader came up with a defense strategy that entailed better quality. They decided to specialize and be much better in just a few lines of products wherein the big retailer was supposed to be weaker, i.e.: lower prices should mean less services, and one of these higher service demanding lines was flowers. Other lines chosen were prepared foods, bakery, produce/fruits, etc.”
“Basically, their carnations and minis came from Colombia, their roses from Kenya and most of the rest from Amsterdam. The leader quickly noticed that their flowers lacked of the desired consistent quality and that this was mainly due to the poorly managed cold chain and lack of traceability which precluded them to be able to guarantee their flowers in order to change this, they intervened the farms' business and adjusted the entire cold chain management, starting from the farms."

What happened in five years amazed Gleiser. "The leader's new strategy caused their own sales to skyrocket, but it also seemed to have a significant effect on the flower sales in general, as the whole flower market consumption in the UK per capita doubled at the same time as Michael Reid documented at the fifth year of the model and it continued. Ten years later, in 2010-2011, the import of fresh cut flowers had tripled and by 2015, the UK consumption per capita was 16 USD in import value, four times as much as that of the US, which was 4 USD per capita."

It was an exponential growth of flower consumption. "and especially when comparing it to the US consumption per capita", he adds. "Both countries started out with a similar flower consumption per capita, economies have grown the same way, but the UK supermarket leader- then followed by the others- did something simple, a simple strategy that drastically changed the flower consumption culture. They improved the quality of their products in the shop."

Improperly managed cold chain
Gleiser is aware of the fact that this principle or strategy cannot simply be copied and implemented in the US, but he wants to point out that it is possible to change and increase the consumption of flowers, and that value at consumers' hands plays an utmost role. As highlighted in this example, to reach the necessary value, a properly managed cold chain is extremely important. According to Gleiser, it is something Colombian growers can get a lot more out of, as the cold chain is often not properly managed, especially during transit from farms to the importers. "Colombian growers grow high quality flowers, but by the time they reach the consumers' hands it has decreased significantly. According to a White Paper by George Staby and Michael Reid, reprinted in 2013, cooling at the farm is most important, but is often not done properly. Therefore, the flowers that are shipped to Miami usually lose 20 to 25 percent of their vase life during transit. The prevailing, technically wrong practice of cooling at destination, does not much more than making up the products. This in turn results in bad experiences, which results in a bad reputation."

Are growers investing in the cold chain?
Since the publication of this white paper in 2013, Gleiser has not seen any drastic adjustments in the cold chains of many growers. According to him, the decision to invest has always been difficult for growers. "costs are the grower's first consideration. They often say: if I invest 1 percent of my turnover in improving the cooling of the flowers, I would be out of competition." it was thought that the unfavorable exchange rate of the Colombian peso against the US dollar that prevailed for several years until 2015 partly explained the passivity in this sector to correct the strategic needs, but it does not seem to be the sole explanation. "over the last years, the exchange rate changed in favor of the Colombian growers. About three years ago, 1 USD was equal to 1900 pesos, but now it is equal to around 3000. This means that growers receive about 50 percent more pesos for their product." however, even though this change, Gleiser has noticed cold chain improvements at just a few growers. "I do not know exactly why, but in my perception, flowers growers as many exporters in Colombia are still reluctant to invest in growing their businesses via more competitiveness, by adopting the newly available technologies and business models. Incidentally, Andi, the major entrepreneurs association of Colombia has just launched an urgent call to all governmental and private institutions, to react to this alarming situation by setting up a “new industrialization model” .

How to reach higher consumption?
Gleiser finds the current situation alarming. "Not only is Colombia wasting a market potential, but also the flower industry is losing market share before substitutes and the possibility to use holidays to promote everyday use, it is such a pity, as there are so many opportunities to improve the sector. Of course, the mindset of the US consumers’ needs to be changed in order to acquire a new culture of consumption for their own use, as happened in UK, where everyday purchases are the sole reason for growth.”

However, in Gleiser opinion, this cannot be achieved though, while mostly low value flowers are being offered to consumers "They are unable to notice which suppliers are the 'better ones'. In order to overcome that 'problem', all exported flowers should meet minimum good handling practices, in order to prevent the better ones to suffer from the rest. That would support a truly high value 'Colombia brand'.

Another big issue that he highlights is the fact that the low value perception is acquired or confirmed by consumers at major holidays. “Due to logistic issues, “once a year” consumers buy or receive the lowest value at the highest prices. They are then reminded on why not to buy flowers again as a holiday present nor to buy them for their everyday-own use. Good handling practices should be enforced everyday and especially on holidays."

According to Gleiser, it is all about who takes the first step. "In the UK story, the buyer/retailer took the first step. But of course, as I said earlier, we cannot just copy and implement the same in the US. The US, for example, does not have a single supermarket chain that is present all over the country. So, I think it might be better to implement it through regional chains or online by the new retailer models, Amazon and Wholefoods, for example."

"It is not a problem that is easy to solve, but when looking at the results in the UK, i think it is worth to bring it under the attention of the flower industry. This industry has 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 threefold the current amounts and more profitably for grower and retailers", he concludes.
For more information
Vacuum Cooling Colombia LTD
Mauricio Gleiser