Last month, a strategic merger was announced between gems group and World Class Flowers, and both entities will integrate under the "gems group" name. But how did gems start? How did the company develop over the years, what were the major challenges and how is this year going, and what to expect in the future? Carlos Oramas, CEO of gems group, tells us more about it and his theory about how he expects the industry to develop in the future.
How did it all start?
Back in 2003, Bonnie Armellini and Carlos got together for lunch as they often did at Her-bets in Doral. Bonnie had hired him into the industry in 1993 and was his first mentor. "We talked about the industry and where we felt there was an opportunity to contribute value. It appeared the industry was very much rooted in the supply side, and we felt we could focus on the demand side. Begin with the customer and work backward. So we began to do that step by step, one program at a time. Our first product was an assorted CDN box though the balance of Cushions, Daisies, and Novelties took into consideration what was actually selling at stores and what was left behind. Then we moved into unique Carnations and a curated mix of large bloom Spray Roses."
How did the company develop over the years?
In the years that followed, the focus remained the same; Begin with the customer and work backward. "Though as time went on, new products were introduced. Dyeds had appeared to be saturated, but at a show in Colombia, we came across a variety of white daisy that was fairly new to the market and dyed beautifully. The Atlantis from Danziger. Most dyeds had been in Reagans. In partnership with Flores de Oriente from Medellin, we brought it to market and began to build upon a new generation of fun, relevant Dyed chrysanthemums, including the disbuds and other items. This was the second big era of our growth as we accompanied the consumer-led demand for unique dyed items."
And as they anticipated the cyclical run of these items, their focus shifted to mixed bouquets. "We spent a lot of time listening and learning, and that led to real strategic opportunities with key retailers, which helped us grow. Over the last decade, we added a relationship with Jardines de los Andes that evolved into a deep partnership."
Also, World Class Flowers had a partnership with Jardines de los Andes and last year, they started to talk about a merger between gems group and World Class as they, after several conversations, realized that they could add more value as one. Last month, they announced the merger, doubling the size of the company, and according to Oramas, the reactions from retailers are very positive. "Both companies were doing well, had a balance of shared business and unique relationships." Currently, the integration of the two companies is taking place, and by the end of July, it will just be gems. So, Jardines de los Andes will be the grower, and gems group will be the marketer to the U.S. market.
Industry development – Oramas' theory
And what about the trends and developments in the industry? How did that grow over the years, and how is it expected to grow in the future? When looking at the past and then to the future, Oramas has created a theory that describes 4 eras of inflection on growth, namely Crop (1960 - 1980), Channel (1980 - 2000), Category (2000 – 2020), and Consumer (2020 - X). He explains it below.
- Crop - 'Production led to growth'
Oramas: "Between 1960- 1980, the inflection of growth came from the expansion of production first to states like Florida and California and soon after to South America. It was through the vision of President Kennedy and later some American academics that Colombia became rooted in cut flowers. The added growing areas resulted in larger volumes, with lower farming costs and year-round productivity."
- Channel - 'Distribution led to growth'
Then, from 1980-2000 there was the advent of the supermarket floral department that placed bouquets and bunches conveniently and affordably within reach of more Americans, he continues. "Focused beyond the special events like weddings and funerals, "super/mass market floral" and even some c-stores and early "e-com" catered to calendar occasions and brought floral to practically every neighborhood in America."
- Category - 'Execution led to growth'
"From 2000-2020, the conversation was along credibility. A journey to be more than "supermarket flowers." From grading to consistency, retailers worked to establish trust in their products and departments. Controlled displays, managed assortments, code dating, product guarantees, and private labels (a retailer's strongest promise) made their way through the industry. The result was an evolution of simple and attractive merchandising, trained staff, fresher items, and a destination department for many."
- Consumer – 'Adoption leads to growth'
According to Oramas, the supermarket channel entered a new age in 2020. "Building upon the years of production, distribution, and execution, our consumer today knows us, trusts us, and shops us. Growth will be driven by them. The people who choose to use our products to do the things they want to do and live the lives they want to live. Not simply because we say so but because they do. During the pandemic, we all witnessed a pronounced increase in demand. Flowers were not fresher or on sale. They simply made sense in the context of people's lives: they were anxious, reconnecting relationships and spending more time at home; flowers were useful emotionally, socially, and functionally. Consumers hired floral, and we felt it. Still today, despite the moderation, we enjoy a steady demand. People want to live well, be healthy, experience strong connections, have fun, discover, belong, and be happy. This age will be defined by the consumer, what they want to do, and how they want to live - if we begin there, walk with them, and remain very useful, they will adopt us. Adoption will lead to growth.
2023 - Another record year
The pandemic, according to Oramas, has been the main challenge in the company's history. "Specifically, the crash of demand and the meteoric rise of demand all in 6 months. Everyone had to deal with this. On top of that, the inflation rise and labor shortage and well every other nuance that originated as a result." But fortunately, demand increased sharply after these 6 challenging months resulting in record years in terms of sales, and when talking about this year, Oramas is very happy with the performance. "Our customers are doing well, which means we are doing well. It is another record year." And when looking at their plans for the rest of the years, "we are always learning, and that inevitably leads to new projects, but over the next few months, our primary focus will be the bringing together for World Class Flowers and gems."
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