Eric Fernandez on the proposed Promotional Order 'Floral Board'

"As it's generic promotion for the cut flowers and greens, all industry participants will benefit"

The demand for cut flowers and greens increased sharply during the pandemic, but how to keep that momentum going in the US? A group of industry leaders believes the answer is in creating a national floral marketing campaign, funded by assessments on domestic growers and importers. For over a year now, a drafting committee, consisting of domestic growers, importers, and wholesalers, has been working on the draft of the so-called Promotional Order, “Floral Board”. Despite the fact that it might take some time until the proposal is finished and submitted to the USDA, expectations are high. "Looking at the ROI of similar initiatives from other industries, we are sure that it will enable the industry to keep the current momentum going", says Eric Fernandez of Continental Flowers, an importer from Miami who is part of the drafting committee.


Eric Fernandez. 

Generic promotion of cut flowers and greens
The idea was already born before the pandemic. For several years, industry leaders like SAF, PMA, AFIF, WFFSA, CalFlowers have been meeting to collaborate for industry marketing and promotions and wanted to see if the industry was open to the idea to create a national floral marketing and promotion order, and now it is really beginning to take shape. The aim of this collaborative campaign is to create new consumers and sustainable consumption across all floral retail points. "As it is a generic promotion for the cut flowers and greens, all industry participants will benefit. There will be no country-of-origin references nor specific products being promoted", Fernandez stresses.

High expectations
Pre-pandemic, the US consumer was mainly buying flowers for holidays, particularly Valentine's Day and Mother’s Day, and for weddings and funerals. During the pandemic, the floral consumption increased, but how it will develop post-pandemic is still a question mark. But with this campaign, Fernandez expects that the industry will be able to keep the momentum going. He refers to the Christmas tree and avocado Promotion Orders where in both cases the demand increased significantly. "For the Christmas tree case, $1 dollar invested resulted in $13 grower profit in the short term and $21.70 in the long term." 

Floral Board
A drafting committee, which includes domestic growers, importers, and wholesalers, is currently proposing the Promotional Order that, if passed by the industry, will lead to the formation of a 12-person floral board, consisting of 5 importers, 5 domestic growers, and 2 non-voting seats for a traditional retail florist and a mass-market retailer. Then, the program will be overseen by this Floral Board in conjunction with the USDA, he explains. 

Meetings to finalize the draft
The order needs to pass a voting process, so in order to create the highest chance for passing, the drafting committee has and is still organizing, several meetings where participants can ask questions or listen to discussions to gain more information about the proposed Promotional Order. "We find it very important that the entire industry is involved. At the start, we were a bit concerned about the dynamic when uniting domestic producers and importers as they have history - frustrations in the past. Fortunately, it went all very well and the more we met and understood all parties’ concerns, the more we all came around to crafting an inclusive and effective promotional order. We offer all industry participants the opportunity to join our meetings and ask questions and express their doubts. We want to hear their thoughts in order to develop the best version of the promotional order possible."

Assessments
In order to advertise and set up campaigns, money is needed. In the current draft, the estimated fund size is 15 Million USD. But where does the money come from? "By assessing domestic growers and importers", explains Fernandez. Both groups are assessed differently; for the importers of record, the assessment rate is 1% of the import border value and for the domestic producers is 0.50% of the farm gate value. "After several meetings with industry members, we decided to use these percentages. The assessment rate for importers is higher because it is assessed on a cost line item versus top-line revenue as is the case of domestic producers. This was the best formula the drafting committee found to create a true apples-to-apples assessment rate that is equitable." Only companies with revenue of more than $100,000 will be assessed.

Voting procedure
Also, companies with a minimum revenue of $100,000 can vote and participate in the administration of the Promotional Order. The voting procedure will be in the form of a referendum, administered by the USDA. For passage, a simple majority of both the eligible domestic producers and importers must vote in favor. Then, 4 years after passage, another referendum must take place to renew the order. 

First steps taken
Despite it might take some time, maybe even some years to pass and implement the order, CalFlowers already took the initiative and created and released the Marketing campaign 'That Flower Feeling', earlier this year. With this campaign, they promote the idea that flowers are not only for special occasions, and that they are ‘self-care made easy’. “This project was financed by Calflowers themselves, but it is just one great example of what we can do with the 15 million USD that we are aiming to collect, ” Fernandez notes.

For more information
Floral Board
www.floralboard.org  

 


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