Despite the crisis, the Russian flower market is witnessing a real boom. Experts name a change of consumer habits as a reason for growing demand. The consumers buy flowers irrespective of special occasions now, which levels the demand through the year.
Moreover, flower compositions are becoming more and more popular for corporate clients, boosting the development of the florist services sector. Online trade is growing and well-known brands actively participate in the market of ready-made business solutions.
Ecuador to Uzbekistan
Conditions for further market developments seem favorable. However, there are certain pitfalls: according to various assessments, over 80% of cut flowers are imported, highly dependent on the fluctuations of the national currency.
After the Netherlands have practically left the Russian market for cut flowers, Ecuador has taken the place of the leading exporter. However, the cooperation with this country has certain particularities, it is almost impossible to select the batches. Foreign companies set the conditions when it comes to the amount of supply, kinds of flowers imported and their color varieties.
Italy is the second biggest exporter. Recently the import from Kenya has been growing faster than from other countries, bringing it to the third position. Other countries, such as Colombia, Spain, Belarus and Israel also bring flowers to Russia. The above countries mainly import the most favorite Russian flowers: roses, chrysanthemums and carnations. Thailand is a leader in the exotic field, bringing in 60% of all orchids.
Recently Uzbekistan has been displaying interest in the Russian market. The Gulshan company launched their greenhouses in 2014 and grow 50 kinds of roses of various colors using Dutch technology. Acceptable prices, thoughtful logistics and high durability of flowers as well as the proximity to Russian borders give high chances to the company to be successful in the Russian market.
Roses instead of cucumbers
It is worth noting that Russian entrepreneurs prefer to fight for their share in the market rather than give it away to foreign companies.
South Sakhalin collective farm Teplichniy is a good example of that. They used to grow cucumbers in one of the greenhouses, which over time became too small for that. Therefore, a decision has been made to switch to the queen of flowers and grow roses.
Ms. Elena Butkova, head of the sales department, is sharing the success story. “We didn’t attract any outside companies, did everything by ourselves. First of all, we replaced all the old equipment, installed new lamps. We dared to make an experiment and plant over 2/3 of new varieties.”
Renovation took half a year and last year the first crops were harvested. This year the enterprise are planning to reach the level of two million cut flowers.
It is worth noting that of all crops grown in the greenhouses, flowers are most profitable, but they are also more demanding. Flower-growing greenhouses show return on investment a year earlier than others.
Currently the share of flowers relative to all greenhouse produce reaches 7%, but there all the conditions for further development are in place. Krasnodar LLC Yug-Agro, for instance, import Dutch planting material brought into the country in small boxes. Another such example is Galantus from Kaluga, an enterprise known since Soviet times. Contemporary greenhouses cover an acreage of 4 ha, where 5 million flowers are grown. Among them are tulips, chrysanthemums, roses, lilies, etc. The company has its own wholesale and retail units. Special conditions for partner companies and high quality of produce allowed the company to increase their profit 10 times in several years.
Flower business
The Russian flower market has a huge potential, new technologies actively enter the country's greenhouses. However, in order to be able to compete with the importers, the growers need to take into account several factors.
Success in the flower business largely depends on efficient and coordinated work from all its participants: producers, wholesalers, logistics, transporters, retailers and florists. Therefore finding reliable suppliers of quality flower produce is of the utmost importance.
Retail and small-scale wholesale trade are prevailing in the country, 60% of produce being sold in flower pavilions, 20% in markets and 20% in flower shops. It is important to take into account the specifics of each region too, as in the capital the consumers spend 7% more on flowers than on average over the rest of Russia.
The Russian market of cut flowers seems to be going through a renaissance period. The demand is growing, greenhouse enterprises are being modernized and the newest technologies are being adopted. There are all the needed conditions for the share of locally produced flowers to increase in the internal market.
Source: fingazeta.ru