Mid-March the floriculture industry was hit hard by corona. GROW reflects on the past six months with Steven van Schilfgaarde, CEO of Royal FloraHolland, and also speaks with him about the future. “Our strategy is an effective response to the major trends of the moment”.
We could write a book about the corona crisis. What is your brief summary?
"Thinking back, the first thing I see is the sad image of thousands of unsold carts. Straight after, comes the rapid introduction of supply regulation and the effective lobby for the Emergency Fund. The fact that we could keep things going together under extremely difficult circumstances is truly a huge achievement. I have great respect for the growers and buyers and I am enormously proud of all my colleagues. That also applies to the Members' Council, the FPC and the SB. Thanks to everyone's efforts and resilience, the recovery was faster than initially expected. From mid-May, turnover is heading in the right direction as a result of high prices. Unfortunately, the supply is lagging behind and the clock is in decline compared to direct trade. It means that by no means all growers benefit, and that Royal FloraHolland is still deeply in the red."
Optimism
"Still, I look to the future with optimism. This is partly due to the experiences gained during the crisis. The most important basic principle of our strategy is to get the best out of the market for our members: optimal pricing versus minimal costs. That is why we are expanding our market to become the best Business-to-Business platform for the global floriculture market, where growers and buyers can trade digitally on the clock and direct. With our digital platform Floriday, we are going to develop a complete and sustainable offer of ordering, payment and delivery, including for the direct flows. A crucial factor is scale. That is why we are building a large international network with as much supply and demand as possible. Because by bringing in supply, we also attract demand, and vice versa. This is only possible with an assortment that is as extensive as possible. We therefore need everyone, including the small growers, niche products and the growers from Africa and Israel."
Future in our own hands
"Our strategy is an effective response to the major trends of the moment". There is an accelerated increase of new digital channels and purchasing moments. There is also a continuing shift, and even an accelerated shift, from clock to direct. The result is that the number of trolleys at the clock is 10 percent lower than last year, while a trolley is divided among more buyers. This has a big impact on RFH's business model. Price pressure from retail is accelerating consolidation in the sector. Buyers are becoming bigger and bigger as a result of takeovers, and growers' collectives are growing through partnerships. Due to the acceleration of the trends mentioned, an efficient and effective floriculture chain is more important than ever, in part because of the corona crisis. It is the only way to recover losses and keep our future in our own hands.
Change agenda
"Within the company we are working hard on our change agenda. With 100% Digital, all ways of doing business - both clock and direct - are supported in a single system. Secondly, with Nationwide Auctioning, we are taking the first major step in strengthening the clock - with new opportunities in the long-term, such as auctioning on location and international auctions. Thirdly, we are developing new payment and credit financing possibilities, both in the Netherlands and internationally. I have high expectations of new delivery possibilities based on new logistic concepts, such as order picking and transport control. This will lead to sustainable efficiency of the floriculture chain as the foundation for further growth - in the Netherlands and at a later stage also internationally. The latter is done by supporting and further developing new trade lanes. My optimism is based on this ambitious agenda and the confidence I have in the people who are working on it."
Source: Royal FloraHolland