2022 has come to an end, so time to reflect. The Flower Wizard decided to sum up the 2022 Wizard Wand News.
Here is the recap for 2022:
January and February 2022
2022 had the makings to be a great year, with all the potential for a good economy combined with more weddings scheduled than ever. The key question: how will the buying public deal with the increased prices of floral products? Well, stay tuned!
- Airline issues in early 2022 due to worldwide demand, schedule changes, and COVID upticks resulted in more expensive cargo flights. Freight space became less available on passenger flights. Shortages of crews, COVID protocols, and higher rates in more lucrative markets greatly reduced capacity for a while, especially for the Valentine’s Day demand. Moreover, air freight, trucking, and ground handling were challenging for some time to come.
- Valentine’s Day survey results: Personally, the most interesting conclusion we left you with is that in our survey, 78% of the retailers pre-booked over 50% of their needs, while 75% of wholesalers pre-booked over 50% of their needs. With that close of a percentage, it kept the market strong as there was enough product available in the open market to supply the gap. However, it’s not enough to cause the market to crash! Hopefully, we will get to see that kind of market in 2023.
March, April, May, and June 2022 - The Floral Industry was flourishing in terms of sales even with all the challenges we faced. People were buying flowers and hiring more people to meet the demand. Also, prices were not a major issue.
- The key question for these months: Did the large flower farm consolidators start having second thoughts about their past acquisitions as well as curtail future investments because of political and economic conditions where they operate?
Despite all these issues, the Floral industry continued to thrive. Moreover, we all hoped that flowers did not price themselves out of the market and that disposable income did not get spent on travel, food, gas, overpriced cars, and not flowers! - Furthermore, the war between Ukraine and Russia created all kinds of issues for the Flower Industry! We continue to extend our heartfelt wishes to the people of Ukraine!
The war in Ukraine did not help the worldwide flower market. Putin’s antics caused many situations in the Eastern European market to get worse for the floral trade. Besides natural gas, the area is also a major area for fertilizer production. Prices for fertilizer hit record highs.
Moreover, there are a few issues faced in the first two quarters of this year!
- Ecuador strike (longest in recent times) in June 2022
- COVID-19 Pandemic
- Product shortages
- Supply chain crisis
- High freight rates
- Labor shortages
- Product inflation
- Wage inflation
- High oil prices
- Colombian new president
July 2022
July was a tough month and did not live up to the trends of 2020 and 2021, where the July numbers were good. Corona cases dropped in the States, which helped logistics and labor issues. Moreover, the drop in Florida was especially helpful.
On the other hand, here are the facts that led to a rather unpleasant July 2022:
- Prices heated up in June because of a scarcity of products mainly contributed to the strike in Ecuador, not due to production reasons.
- Freight stayed high due to June hitting record fuel prices.
Inflation partly related to high fuel prices and automobile pricing hit 9.1%. We were in a strange time as some consumers were buying just basics, while others were buying $4000 designer handbags. - Bad month on Wall Street. We entered a Bear Market, and people spend more money on flowers when they feel richer due to a larger portfolio.
- Fear of a possible upcoming recession based on low rate of unemployment and high rates of spending.
- An Incredible amount of people did not take vacations in 2020 and 2021 and had a pent-up desire to travel this past July. Most of the population took vacations two (2) to three (3) times as long as usual, to make up for lost weeks of leisure time in 2020 and 2021.
- Events were less likely to occur in July when more people were out of town and not able to participate, especially when it involved in a family function.
- July was one of the hottest months worldwide on record, with places experiencing triple-digit temperatures. This was certainly not conducive to record sales. Heat interfered with sales and transportation, and production.
August-December 2022
To summarize, we were in a totally different world this year. COVID-19 could not be blamed for everything, but it certainly led us into an uncertain world. Inflation haunted us as well. Let’s hope this reverses itself, and we’ll be back to a growing economy in 2023!
I am feeling optimistic about this because of the economic factors that are potentially aligned in the right way for a quick change. Also, based on the Fed, the 4th quarter didn’t seem to be headed in the right direction. Therefore, they had to take action about this.
September was good but not as good as in 2021. The items that everyone wanted were tight in supply, namely: snowflake white spray roses, white roses, and fall color items. Most other items were available without any major issues. The wedding and event predictions based on early estimates did not live up to the original expectations; novelty and niche items were in high demand, and dried, and preserved flowers were still strong and becoming part of the new normal.
Most of what we heard in the last quarter was: Inflation, Inflation, Inflation, Interest rates, Interest rates, Interest rates, Election, Election, Election!
We were hearing from many that the fall was less than stellar for sales. Everyday business was off, according to many industry leaders. With this, we continued to figure out consumer demand patterns as consumers’ expenditure habits changed since the peak of COVID-19 in 2021. Some even complained that oranges and other fall colors were not selling. So, at this point, things seemed clear as mud.
Production at many South American farms was lower than usual despite major expansions. Weather impacted production, yet there was plenty of product around. One major grower said he estimates that 90% of farms were throwing flowers away due to low everyday demand. European demand was low as well. Freight ran well in the last two quarters, even during the usual messed up high-demand period of Christmas shipping.
Moreover, we know costs have increased. One industry expert told a group that the average cost of most goods increased by 22%. Moreover, it will be interesting when companies start to figure out their bottom line. Furthermore, one thing we are certain of is that everything is currently uncertain! As one industry expert reminded us, “Hope for the best and plan for the worst!”
Black Friday and Cyber Monday sales were strong. A total of 197 million shoppers engaged in spending. However, florists are very concerned that day-to-day sales are down, and even though we are not in a recession, it feels like it for some. Inflation lingered on, and high prices may be why sales are slowing in the floral sector. But as for sales, it went slow. Inflationary pricing must be restrained, especially in a category like flowers. We cannot price ourselves out of the market and have further reductions in sales.
Conclusion
Something changed in October 2022 and, for some, even earlier. Are we back to the old days and back to the old normal? However, let’s hope the demand from 2021’s new normal returns. In the end, the most important part of the equation is satisfying the consumer. Without the consumer, we have no industry. Moreover, we need strong sales 52 weeks a year. We all need a win-win-win!
For more information
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