Floraculture Nov - Dec 2016 by Kisan Forum Pvt. Ltd.

The business magazine for worldwide floriculture

FLOWERS FOR FOOD?

Debate on land governance raging more than ever

Japan

A complex distribution model with multiple stakeholders

w w w.k isan.com

NOV N O VEMBER / D E C /2DECEMBER 016 2 0 16

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www.FloraCultureInternational.com | November/December 2016

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Partners of FloraCulture International

Floraculture International encourages the pursuit of joint activities in areas of mutual interest with national and international societies, companies and organisations. Agreements have been reached between Floraculture International and leading growers and trade associations in 32 countries. This unique partnership includes a complimentary copy for each member of the registered associations. Floraculture International is proud to announce the cooperation with the following associations.

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Table of Contents

November/December 2016 Volume 26 Number 11 and 12

Cover story: Flower marketing in Japan Starting with an early morning visit to Tokyo’s OTA Market is the most authentic way to experience and understand flower retailing in Japan. Its market grounds host two competing flower auctions under the same roof with OTA Floriculture Auction taking pride in being the country’s largest flower auction in market share.

by Ron van der Ploeg

Flowers for food?

Years of frustration from ethnic groups who feel excluded from society, the economy and political participation can lead to outbreaks of violence, as recently seen in Ethiopia. This makes the debate on land governance, food security and social exclusion raging more than ever. by Marie-Françoise Petitjean and Ron van der Ploeg

IFEX takes Tokyo by storm

The global floral industry gathered in record numbers at Reed’s 13th annual Ifex expo which was held at the Makuhari Messe Convention Center in Tokyo last month. by Ron van der Ploeg

International Grower of the Year Awards 2017

All those linked to horticulture are invited to celebrate with the ornamental horticultural industry at the International Association of Horticultural Producers (AIPH) International Grower of the Year 2017. A ‘not-to-be-missed’ business award event, the awards ceremony will take place on Tuesday 24 January 2017 at the Colosseum Theatre in Essen, Germany. From our own correspondent

GrowQuip brings together the best brains in horticulture In October 2016, the UK’s Commercial Horticultural Association brought together the best brains in horticulture, many of whom have their own strategic success stories, to provide all growers with help in overcoming at least some of the problems they face in the day to day running of their business. by John Sutton

Columns 38 39

Imported roses in Japanese supermarkets not yet in full bloom

While domestic flowers remain very popular with Japanese consumers, decreases in local cut flower production, climatic variance and ageing flower farmers with no successors create a wider opportunity for imported flowers. FCI sat down with Mr. Masashi Samuta, Chief Executive of Flower Auction Japan (FAJ), where international trade represents up to 20% of total cut flower sales. by Ron van der Ploeg

Flower auctioning 2.0 the Japanese way

Flower Auctioning 2.0 or New Auctioning are a few of the buzzwords at the Dutch flower auction Royal FloraHolland these days. Truth be told: Aucnet Japan, operating from a fancy office tower right in the centre of Tokyo, already sowed the seeds of flower auction’s new style back in 1985. by Ron van der Ploeg

A giant in transition

Departments International Events Advertising Index

Japan

From the editor Dutch Comfort

05 11

November/December 2016 | www.FloraCultureInternational.com

With compliments With compliments

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Helen Moody, new railway linecommunications from Tanzania to Uganda; Delta about Dennis When preparing this month’s extensive coverage ofitJapan, the song for some Ron van der Ploeg (ron@fl oracultureinternational.com) snippet of news received from David Gray appears that Petitjean, Marta Pizano, Leaora Policar, Jennifer White Marie-Françoise development of horticulture and economies in general the news Postbus 1000, 1430 BA Aalsmeer, Netherlands Seriese often appear in our editorial. Th is is a compliment to you, the (jaap@floracultureinternational.com) toreason, start direct flstuck ights in between Nairobi and Atlanta;Iadelved deal between was myreceiving head and eventually team: Edward Bent, Chris Beytes, logistics in East AfricaAddis are a boost. 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Black (pblack@ballpublishing.com) Black Istanbul and Eurasia Plant Fair which, are expected to draw 300 (international) EMS Inc., 2-22-8 Matsubara, Setagaya-ku,Tokyo 156-0043, Japan California Pack Trials, like the is auctions, PolicarWilliamSouth Africa:All Cilla Lowen (cilla@fl oracultureinternational.com) rights reserved. No portion of editorial may be reproduced in any Miami: Armellini(William@fl oracultureinternational.com) eCommerce since the streamlining of shipments a key outcome Ball Publishing,form 622 without Town Road, written permission of the publisher. Publisher is not exhibitors and 16,000institution attendeesthat from 50a long countries. Ideally located (81) 22 33America: 32 75 756FF(27) (81)22 334857415 32 27 933 areusing another have history T (27) 4857058 USA, Central resulting from this tool. 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Editorial & Administration Offices

be reproduced in any form without written permission of the publisher. Publisher is not liable for advertisements using illegally obtained images.published Send address changes to FloraCulture FloraCulture International (ISSN1051-9076) monthly.Worldwide distribution. FloraCulture International isB.V. International magazine, P.O.Box 82, 1850 ABAllHeiloo, theNetherlands. © 2009 FloraCulture International magazine. rights reserved. No portion of editorial may

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From editor In my the opinion With compliments

International (ISSN1051-9076) is published monthly. exhibition in this rapidly growing regional market for ornamental plants, Cilla Lowen South William Africa:FloraCulture Cilla (cilla@fl oracultureinternational.com) Worldwide distribution. ©2009 Miami: Armellini (lnicholas@ballpublishing.com) BallLowen Publishing, 622 TownFloraCulture Road, International magazine. behind; FloraHolland persists in its ambition to strengthen the Niranjan flowers and landscaping. All rights reserved. No portion of editorial may be reproduced in any T (27) 22 4857058 F (27) 22 4857415 Deshpande POEiji Box 1660,(william@floracultureinternational.com) West Chicago,form IL 60186, United States without written permission of the publisher. Publisher is notmarketplace for Europe, a continuation of the Dutch auctions’ Anabel Evans, Editor liable using illegally obtained images. Send address changes to Yoshikawa China: Dradvertisements Sun Jing Xian (consultingflower@yahoo.com.cn) T(1)6 30 23 13 675 for F(1)6 30FloraCulture 23 15 254 International (ISSN1051-9076) is published monthly. long history of achievement. FloraCulture International magazine, P.O.Box 82,1850 AB Heiloo, the Netherlands. Have a wonderful winter and here’s to lots of success for you and your India: Niranjan Deshpande (team@kisan.com) Worldwide distribution. ©2009 FloraCulture International magazine. Middle East: Eyal Policar (eyal@fl oracultureinternational.com) Cilla Lowen T (91) 20 302 52 All 000 rights reserved. No portion of editorial may be reproduced in any business. T (972) 54 42 97 002 F (972) 86without 58 19 07 form written permission of the publisher. Publisher is notTo end at the beginning, in the Sunshine State of California, Chris 6001554_06_Colofon.inddliable 6 for advertisements using illegally obtained images. Send address changes to 27-04-2009 13:08:58 Japan: Eiji Yoshikawa (callems@world.odn.ne.jp) Beytes has a well-penned article bringing to life the FloraCulture International magazine, P.O.Box 82,1850 AB Heiloo, the Netherlands. Eyal EMS Inc., 2-22-8 Matsubara, Setagaya-ku,Tokyo 156-0043, Japan California Pack Trials, which, like the auctions, Policar Cilla Lowen T (81) 33 32 75 756 F (81) 33 32 27 933 are another institution that have a long history in East Africa: David Gray (gray@africaonline.co.ke) presenting innovative ideas and quality products. 6001554_06_Colofon.indd 6 27-04-2009 13:08:58 South Africa: Cilla Lowen (cilla@floracultureinternational.com) T (27) 22 4857058 F (27) 22 4857415 Eiji Anabel Evans, Editor oshikawa 6001554_06_Colofon.indd 6 27-04-2009 13:08:58

Lucas Nicholas

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FloraCulture is published monthly. FloraCultureInternational International(ISSN1051-9076) is published monthly. Worldwide Worldwidedistribution. distribution.©2009 ©2016FloraCulture FloraCultureInternational Internationalmagazine. magazine. All Allrights rightsreserved. reserved.No Noportion portionofofeditorial editorialmay maybe bereproduced reproducedin any form without written written permission of the publisher. Publisher is not in any form without permission of the publisher. liable for advertisements illegally obtained images.obtained Send address changes to Publisher is not liable for using advertisements using illegally images. FloraCulture International P.O.Box 82,1850magazine, AB Heiloo, the Netherlands. Send address changes tomagazine, FloraCulture International Postal address: Postbus 1000, 1430 BA Aalsmeer, Netherlands

Ron van der Ploeg, editor ron@floracultureinternational.com

November/December 2016 | www.FloraCultureInternational.com

Report Years of frustration from ethnic groups who feel excluded from society, the economy and political participation can lead to outbreaks of violence, as recently seen in Ethiopia. This makes the debate on land governance, food security and social exclusion raging more than ever.

Flowers for food?

ommissioned by the Dutch Food and Business Platform, the LANdac Flowers for Food? survey reviews how floriculture investments in Eastern Africa impact local food security. Based on 20 farm visits and interviews in four countries (Kenya, Tanzania, Uganda and Ethiopia), the study examines floriculture business models, analyzes the impact of land conversion on access to natural resources and food security, and makes recommendations to minimize food security vulnerability.

Land governance is a challenge

by Marie Francoise Petitjean and Ron van der Ploeg

Foreign investment in developing countries is promoted as a development tool that creates employment and generate foreign currency. To attract investors, several developing countries, sometimes helped by European subsidies, offer an array of incentives, from facilitating code of investment and access to land to low rate loans and tax holidays. Floriculture continues to be one of the leading investment sectors in Eastern Africa, especially for Dutch horticulture entrepreneurs.

Flower farms differ from other cash crops by the relatively small plots of land they require. Nevertheless, LANdac argues that when viewed as a whole farms can impact pastoralists' land rights and usage of water resources. Moreover, land allocation for small plots receive less governance attention than larger ones. Except for Ethiopia, where land for flower projects is allocated by the state, most land was acquired from private owners, with long term leasing agreements. Land conversion to flowers has two main impacts, says LANdac: displacement of local communities and conversion of food growing areas into inedible production area. In all countries, except Tanzania, land under floriculture cultivation was previously used either for food production, pasture or forest land, all of which are crucial for local livelihood (grazing animals, collecting fire wood). Even in cases of communal or uncultivated land, the concentration of farms near water resources (lakes or rivers) limits local residentsâ&#x20AC;&#x2122; access to water, for example watering holes for livestock. Land governance is thus a challenge since it can affect local communities, particularly people with unsecured land rights.

Job creation

Flower farms are highly labour intensive and create a great deal of employment. It is estimated that floriculture generated 17,525 direct jobs and 787,000 indirect jobs in the four countries of which more than 80% are permanent jobs and 68% are filled by female workers. The study advances the hypothesis that restriction of access to natural resources is being replaced by a stable income that enables employees to buy food. However, floriculture mostly creates low skilled jobs. Although most flower farms, through collective

www.FloraCultureInternational.com | November/December 2016

bargaining, are offering higher wages than government minimum wages, the report states that floriculture basic wages are not commensurate with the cost of living. Moreover, the majority of employees are migrants coming from other regions, who have no land on which to grow their own food. Being obliged to purchase nearly all their food in local markets exposes them to food pricing volatility, especially in the dry season. Furthermore, they have to pay for housing and cannot rely on the support of their family. The influx of a large number of migrants can create tensions within local communities regarding access to food and housing, in addition to other cultural differences. Conversely, it creates opportunities for local communities to supply food or rent housing. Indirectly, the wide employment of women earning an income has a positive impact on food security since women generally allocate more money for household food consumption. Another positive impact LANdac mentions are the various floriculture companies that have established food and fresh drink water programmes. Some of them supply additional services to their staff, such as health care, schools, sport facilities and community activities. These benefits are generally limited to employees and in some cases extended to their families.

The use of pesticides and water

Worker exposure to chemicals is another issue the LANdac survey raises, emphasizing the fact that adoption of certification standards has greatly improved working conditions and worker safety over the years. In terms of capacity building, the authors of the report point out that

floriculture technologies can hardly be transferred into field vegetable production. Nevertheless, flower farms have contributed to a better awareness by local farms about good practice and quality management. Economies of scale have also allowed development of affordable watersaving irrigation systems that benefit local farmers. Alternately, the authors analyze grower schemes in Kenya, where 3000 local smallholder farmers practice floriculture on small plots of land and sell to export companies. Food security and livelihood are improved thanks to higher revenues than workers’ wages and improved farming skills used to practice food production alongside flower production. Nevertheless, due to the low investment capacity of these smallholders, their production is often limited to summer flowers, which do not require greenhouse investment. The main challenges seem to be logistics along with technical assistance and quality management. In terms of the environment, the main issue is the use of pesticides and water. The study highlights the fact that flower farms are increasingly implementing low impact practices

in terms of pesticide and water usage, thanks to industry codes of practice. Various farms are also engaged in water and natural resource conservation, for example around Lake Naivasha, and contribute to the implementation of these practices by other growers.

Recommendations

The study concludes that the impact on food security requires a multifaceted approach, with the objective to develop ‘viable businesses (profit) which contribute to the development of improving livelihoods (people) under environmentally sound conditions (planet)’. One of the main suggestions is to improve land acquisition governance by involving all major local stakeholders in a participative approach, ensuring that all aspects are dealt with so that local holders receive proper compensation for their land and retain access to natural resources. In terms of labour, the study recommends prioritizing the employment of locals, and addressing the issue of pressure that migrants put on food availability and price, access to water and housing. The study recommends increasing the minimum wage to a living wage. This

In terms of capacity building, the authors of the report point out that floriculture technologies can hardly be transferred into field vegetable production.

requires a wider, structured approach to the value chain, as well as raising European customers’ awareness of fair remuneration. To lower pressure on food supply from other regions during the dry season, the report suggests enhancing water access for local food growers and improve infrastructure in rural areas, facilitating and reducing the cost of supply to local markets. Flower farms could also put some uncultivated land at the disposal of their migrant staff, to allow them to grow part of their food. Partnership with smallholder farms could also be developed as growers for field flower production, but also as suppliers of fruit and vegetables for the flower company’s meal programmes. Technology transfer could take place through water-saving irrigation techniques. Some of these recommendations rely on the private sector while others can be driven by local and foreign institutions. The researchers recommend enhancing the capacity of local institutions to implement regulation, proper land and access to natural resources governance, as well as creating adequate infrastructures allowing a better linkage between rural and urban areas. |||

>>>

November/December 2016 | www.FloraCultureInternational.com

Report After going through the Landac report, Frank Ammerlaan, who runs a rose farm in Ethiopia, said he is happy the author hasn’t used ‘insinuations’ nor did he tell blatant ‘untruths’ about floriculture in Africa. “My overall impression is that the survey activities have been carried out professionally. The author has done some pretty good work. The report takes the good and the bad together. It is also critical, but that’s of course allowed.”

by Ron van der Ploeg

‘All investors should give back to the communities’

s for the link between foodsecurity and floriculture, Ammerlaan does miss some in-depth analysis and causal relationship. “The link between both remains somewhat unclear and is like trying to compare apples and oranges.” Focusing primarily on Ethiopia, Ammerlaan believes there are a number of issues that haven’t been addressed properly. “Floriculture has been one of the top foreign exchange earners for Ethiopia and allows the country to invest in agriculture and infrastructure which eventually will lead to more stability in food production and supply volumes. Floriculture is one of the main contributors to economic growth. The economy in countries such as Ethiopia is vulnerable with GDP per capita being one of the lowest in the world and a current share in the global markets that is limited. The floral industry has always been an important component of the Ethiopian economy and a major factor in its economic growth. Of course, not everyone is directly benefiting yet as

floriculture should be considered a long term project. In the end it is a way to guarantee food security. Consider that it took European countries over one hundred years to reach the same goals!”

Capacity building

Ammerlaan regrets that the capacity building theme in the report has not yet been fully utilized. “Capacity building is not only about building schools but also about offering courses in dozens of topics. The nation’s education indicators are still very poor and this causes mismanagement in terms of food production and finances as well as food waste at both the micro (households) and macro (business environment) levels. Mostly the basic things are done wrong.” In the meantime, Ammerlaan sees a growing number of educated managers and supervisors who own a plot of land or have family who have a piece of land. These educated people are able to grow crops in a much more productive way.

Floriculture investment in Eastern Africa Country Year started

Kenya

Tanzania

Uganda

Ethiopia

1980

1987

1992

1997

Companies

170

Direct jobs

90,000

5,000

8,500

85,000

Indirect jobs

500,000

36,000

51,000

200,000

Contribution export earnings USD millions

597.72

3.61

17.87

212.56

Cut flowers

Cuttings

Cut flowers

Top crops % exported to NL

Sources : Landac report, from : USAID 2006; TPAWU 2011; Riisgaard & Gibbon 2014; Mwase 2015; KFC 2015; UFEA 2015

www.FloraCultureInternational.com | November/December 2016

Independence

Ammerlaan thinks the article misses the fact that jobs enable people to live more independently. “Eventually this will result in improved living standards. Though African societies have a standard of living that is extremely modest by Western norms, even the slightest rise in prosperity will make African women less dependent on men. As such, birth rates will begin falling. Consider that overpopulation might be one of the major causes of food insecurity as well as the irresponsible use of natural resources by a less educated population.”

Water-smart

Ammerlaan explicitly pointed to water consumption in Africa. “Flower farms are ‘water- smart’ contrary to the smallholder farms that use furrow irrigation (also known as flood or surface irrigation) with water being pumped to flow down small trenches running through crops. We hope to create a snowball effect with small farmers getting better insight into how smart water management allows them to increase their yields.” Ammerlaan continued by saying that the comparison between food security and floriculture is a tricky one in that the northern and southern (east) provinces are suffering the worst drought in 60 years. This means people short of food are located hundreds, and in some case thousands, of kilometres from the flower producing areas. “If there is a direct link one should ask whether winemaking in France impacts the drought in central Spain.”

in order to ensure improved food production. “And for that, foreign investors are needed. Of course, the replacement of farm businesses requires fair compensation, but in Ethiopia all land is owned by the government . Officially land is public property and not for sale. On the positive side this limits land speculation. If there is any speculative land acquisition done the government is involved. At the moment compensations seem fair, at least in the area where we are based. But in the past this has not always been the case.”

Code of good practice?

When asked how foreign investors could be certain that land allocated to them by the Ethiopian government does not affect local communities and if a code of best practice would be an appropriate answer, he said, “All investors, including those from Ethiopia, should give back to the communities and the wider area surrounding the companies. This means creating jobs, but also assisting in capacity building and health facilities. What is of utmost importance is cooperation and communication to make the community feel part of the investment. The majority of Dutch

Growing population

Referring to the recent outbreaks of violence across the country, Ammerlaan said that one of Ethiopia’s main problems is its rapidly growing population. “In 1980, the country had a population of 35 million; the current population is over 100 million. An increased population means more mouths to feed. Doing things the old way with small holder farmers on small plots of land and adopting a low input and output system simply isn’t working. The country’s population growth also causes another problem in that the next generation of farmers will have to share their land with three to four family members so the average farm size will only continue to decrease.”

Fair compensation

Ammerlaan added that the country needs further economic growth

Land Governance for Equitable and Sustainable Development

Flowers for food? Scoping study on Dutch flower farms, land governance and local food security in Eastern Africa

Synthesis and country reports

Food & Business Knowledge Platform (F&BKP) and LANDac January 2016 Authors: Evans Kirigia, Gemma Betsema, Guus van Westen, and Annelies Zoomers (LANDac /IDS, Utrecht University)

companies (and horticulture companies) make effort to be engaged in the community, but some companies don’t consider this their responsibility. An Indian or Chinese company employing 250 Indians/Chinese definitely is not the best example of supporting local communities and we are not even talking about investing in facilities in the surrounding area. So I am in favour of some kind of ‘give back regulation’.” In the long run, does Ammerlaan think the recent outbreak of violence in Ethiopia will compromise the development of flower production in Ethiopia and put Kenya in a more advantageous position? “Every country in Africa has its own problems and this also goes for Kenya. It is clear that in the short term unrest doesn’t help, but next year there can be issues in a country like Kenya again. The sad thing is that eventually the local people are always the victims. They are, in my view, much more important than ‘foreign investors’.” ||| Despite numerous attempts to obtain the official point of view of the Ethiopian and Kenyan Flower Council, their chairmen didn’t respond to our request for comment.

Email authors: mf.petitjean@orange.fr and ron@floracultureinternational.com Reference : Flowers for food ? Scoping study on Dutch flower farms, land governance and local food security in Eastern Africa Commissioned by the Food & Business Knowledge Platform (F&BKP), one of five Knowledge Platforms initiated by the Dutch Ministry of Foreign Affairs in 2012. It is an open and independent initiative where representatives from international networks and organizations of business, science, civil society and policy come together. Conducted by LANDac/IDS, Utrecht University: the Netherlands Academy on Land Governance for Equitable and Sustainable Development, is a partnership between Dutch organizations working on land governance. http://dspace.library.uu.nl/bitstream/ handle/1874/328201/WEB.pdf?sequence=1

November/December 2016 | www.FloraCultureInternational.com

IFEX The global floral industry gathered in record numbers at Reed’s 13th annual Ifex show, held at the Makuhari Messe Convention Center in Tokyo last month. This year’s show catered to industry professionals of all ages and tastes as it welcomed exhibitors and traders from around the world.

Taking Tokyo by Storm T

he three-day event took place October 14-16, running concurrently with the International Garden Expo Tokyo, GARDEX, the International Hardware & Tools Expo, ToolJapan and the agriculture technology exhibition, AgriWorld. From opening day, attendance for all four shows combined was higher than anticipated and remained consistently high throughout the week. The shows attracted a record-breaking number of 45,858 visitors. Ifex, Gardex and ToolJapan, taken as a separate entity, welcomed a total of 21,188 visitors who were treated to new products and services.

Major flower importer

by Ron van der Ploeg

Yes, economic times are tough for Japan. The country, however, still ranks among the six major flower importing countries in the world with 127 million consumers that appreciate premium quality products. Japan is also the nation with the most flower auctions in the world (121 registered members of the Japanese Flower Auction Association), ranging from very small to medium sized. “Ifex hosted a flower auction-themed feature area once again. Flower auctions such as Flower Auction Japan, Saitama Engei Ichiba, Odawara Engei, Kyushu Nikkan Shokubutsu and Higashinihon Itabashi Flowery Culture Auction displayed their

This year the winner in the Cut Flower Category was Lisianthus Corsage Antique Pink from Nakasone Lisianthus.

www.FloraCultureInternational.com | November/December 2016

International Sales Director Satoshi Watanabe from show organiser Reed Exhibitions.

products and services there. This auction pavilion is gaining momentum and we expect it to further expand in the coming years,” said International Sales Director Satoshi Watanabe from show organiser Reed Exhibitions. He added that with one of the largest number of exhibits in their history the combined shows provides a healthy picture of industry growth. “This year’s event grew 20% in new exhibitors and 8% in attendance from 2015 to 2016. The AgriWorldshow on sustainable agriculture was top-ranked, but Ifex also continues to expand, with important additions to our bonsai section, though at a slower pace.”

Bigger and exciting

Now in its second year, the show’s new plant area, dubbed the Ifex Flower Awards, showcased over 150 stunning new cut flowers and potted plants. These coveted awards are designed to select the future best-selling varieties and generate attendee excitement. They prove to be an excellent marketing tool for breeding companies and their customers, from home and abroad. The awards provide media coverage and leverage with the top retail chains in that grand prize winners are displayed in stores like Aoyama Flower Market and Hibiya Kadan.” This year the winner in the Cut Flower Category was Lisianthus

Corsage Antique Pink from Nakasone Lisianthus, a new variety that has excellent colouring as it grows in the cool and high-altitude areas of Nagano prefecture. The cultivar features fringe-tipped petals that come in hues of bronze, gold, burnt orange and antique shades of rose. Winning the coveted Grand Ifex Flower Award in potted plants was Phalaenopsis ‘Green Earth’, a creation of Morita Orchid Inc..It’s an absolutely stunning new variety that bears lime-green flowers with a contrasting dark lip and 12-14 flowers per stem. In the Overseas Grower Category, an exhibitor from Ecuador, Naranjo, took home the grand prize Proudly presenting the creamy cloud of Ifex Award-winning ‘Peace Full’ roses in Baraka’s booth is Sales Manager Timothy Mwangi Kuria.

Dutch Comfort

by Jaap N. Kras

We Do Not Produce Flowers and Plants Naranjo Group’s managing director Maryluz Naranjo told FCI that their award-winning rose stands out for its creamy white colour and pink hues.

for its large-headed Paloma rose. Maryluz Naranjo told FCI that the rose stands out for its creamy white colour and pink hues. Stretching over 40 ha at different locations, Naranjo is a group of three rose farms producing top quality flowers at altitudes ranging between 2,700-3,000 metres.

Baraka Roses

Also winning an Ifex award in the Overseas Grower Category was Baraka rose farm. Ideally located at an altitude of 2,250 metres in Nyandarua County, Kenya, Baraka’s commitment to quality is supported by strict procedures for each stage of production from start to ship. Proudly presenting the creamy cloud of Ifex Award-winning ‘Peace Full’ roses in their booth is Sales Manager Timothy Mwangi Kuria. Commenting on their recent sales, he said that overall weather conditions have been difficult with torrential rains causing mildew havoc in May, June and July. He was quick to add that the farm’s production levels are currently back on track. A full member of Royal FloraHolland, Baraka pre-sells up to 80% of their roses, while the remainder is sold through the Dutch auction clocks. One of their largest customers is International Procurement & Logistics (IPL), the biggest single importer of produce in the UK and fully owned by ASDA. With regards to the Japanese market, Baraka sells its roses to Classic, ships them via UAE and Qatar at $3.5/ kg to Tokyo where, in turn, consumers in the Hibiya Kadan chain stores delight in their boldly, monochromatic flowers (twotoned varieties tend to be less appealing to the Japanese). Mwangi believes there’s potential for the Japanese, especially when it comes to the purchase of flowers for their own use. Next year’s Ifex will be held October 1113, 2017 at Makuhari Messe, Tokyo. |||

In ornamental horticulture the most important challenge we face is changing our mindset. What’s your focus? If you are productdriven, it’s time to rethink. Consumers do not buy flowers and plants. Consumers buy gifts, home décors items or an inexpensive product to express their emotions and mark special occasions such as Valentine’s Day, Mother’s Day, weddings and funerals. How aware is our industry of changing consumer behavior? I am afraid the answer is not at all. Growers test new varieties using all kinds of criteria they think are important: uniformity, vase life, yields per m², pest and disease resistance, to name a few. Can you give me the name of a breeder who conducts extensive market research, test marketing his new flowers and plants in a flower shop or grocery store? In the best-case scenario, novelty flowers and plants are tested for two to three years in a greenhouse environment, primarily to assess their growth performance. But they are not tested on a shop floor where consumer preferences, habits, and taste can be studied thoroughly, based on hard data to give insight into the market characteristics of a flower or plant. The product-driven approach is everywhere. Now that autumn and winter are quickly approaching, the countdown to many flower trade exhibitions has begun: the Royal FloraHolland Trade Fair in Aalsmeer, the IFTF in Vijfhuizen have already closed their doors and the IPM in Essen is right around the corner. Originally these trade fairs brought breeders, propagators and growers together, providing a one stop shopping destination for seeds, cuttings and bulbs. The character of these fairs, however, has changed dramatically over the past few years, with an increasingly stronger focus on business relationships and trends to the detriment of the trade. Sales contracts are hardly written anymore; the people attending these exhibitions are often flower and plant growers. Meanwhile, in this interconnected age and digital world the vertical supply chain continues to shorten with B2C gaining ground faster than we realize. I believe it’s time that trade shows start to reinvent themselves, focusing on a sales platform for products that truly fulfill consumer’s needs. The past few years, we’ve offered concepts or show sales themes. But consumers do not buy flowers and plants; consumers buy products to express their emotions. We have to go back to trade exhibitions that express this new thinking. Christmasworld, slated for January 27-31, 2017 at the Frankfurter Messe, Germany, has made a wise decision to add a brand new Floradecora to their show floor. Buyers visit the fair to place Christmas orders and future orders for specific occasions. It’s only a two-hour drive from Essen to Frankfurt. I highly recommend attending Floradecora to discover the difference between a traditional trade fair and a contemporary trade exhibition where real business is done between retail and production.

Jaap N. Kras info@jaapkras.nl

November/December 2016 | www.FloraCultureInternational.com

ZambesiÂŽ

Lilies

Mak Breeding firmly back on the growth path The folks at Mak Breeding think big. In an increasingly competitive business environment dominated by fewer but larger bulb farmers and commercial cut flower growers, the company not only focuses on carefully planned, profitable cash crops, but have also decided their mission is to make lilies truly unique. They wish to empower their customers by providing healthy, firm and mature lily bulb stock. Having remained a few years quietly in the bud during the economic downturn, Mak Breeding’s powerful petals are now unfolding in all their splendour with exciting breeding breakthroughs in lilies.

by Ron van der Ploeg

t’s the beginning of October and lily bulb harvest time is here. Now that the growing season is winding down, Holland’s hot spots for lily bulb production, such as the Anna Paulowna Polder and the Duin-en Bollenstreek and the region known as ‘t Zand, are bursting with activity. When passing through small villages during the harvest you will find everywhere tractors and trailers everywhere in the countryside, people in the fields checking crops and giant wooden crates, referred to in Dutch as ‘kuubskisten’, alongside the road waiting to be filled with hopefully another successful harvest.

A story of extremes

Second generation lily breeders, propagators and brothers, Rogier and Arno Mak have every reason to believe customers will be delighted with this year’s bulb quality. Even though the roundup of the year in bulb producing areas across the Netherlands is a story of extremes. “Yesterday we started uprooting novelty varieties, today it’s lilies with proven track records in production. Autumn was unusually mild, spring was cold delaying our planting season, while summer floods, especially in the southern part of the country wreaked havoc. September and October are the most crucial months: the weather treated us unbelievably well with September warmth leading to a last growth spurt and a hearty crop. The longer the growing season, the better the bulb feels. Bulbs continue to grow and the crop has not gotten away from us,” said Rogier using typical bulb phrasing.

Long term goals

Determination, modesty and perseverance together with passion for long-term goals best describes the Mak family and their commitment to breeding and propagating lilies. Mak Breeding took root in 1967 when Nic Mak, seen by many as a quintessential lily bulb expert, set up his first field production of lily bulbs. Over the years, Nic developed a keen eye for developing new lilies with high potential, coupled with excellent breeding material from Oregon Bulb Farms/Cebeco Lilies USA. “Our father marked a new milestone in lily breeding when he acquired the renowned Bischoff Tulleken (BT Lilies) in 2005. The best of different seed parent stock was brought together under the new company, Mak Breeding,” outlined Arno. The acquisition broadened the pool of genetics, offering new perspectives in lily breeding. “In potted lilies, for example, Cebeco’s blood line stands outs for its sturdiness and longevity, while BT varieties differentiate themselves with their exclusive looks,” said Arno. His brother continued, “Overall, it is important to provide customers with the standard colour mix of white, pink, yellow, orange and red in addition to varieties that sell well in different sales channels. Consumer tastes differ greatly. Take the USA where ‘Stargazer’ is still a firm favourite among consumers. Or the worldwide success of our Oriental lily ‘Siberia’. But in lilies there’s much more to discover. Gaining momentum, for example, is our pure white OT ‘Zambesi’ that has been tested worldwide since its official launch six years ago.”

Breeding

One of Mak Breeding’s core activities involves the breeding of new lilies. All three sons of the company’s founder appear to be equally captivated by the wonders of nature when creating new blooms. “Lilies will never cease to amaze. Each year you can see improvements in the product’s portfolio and we are always busy creating. There is always a novelty lily in the pipeline. Sometimes, however, the market is not ready for it, while in other cases newcomers instantly receive positive feedbackt” enthused Rogier. The real breaking news is Mak’s newly launched OT hybrid lily ‘Table Dance’ which won ‘Best in Show’ in the Outstanding Varieties Competition at the Society of American Florists’ Annual Convention in Hawaii last September. It has large, showy, upward facing pink blooms with white centres and makes for the perfect cut flower. Giving significant advantage over other varieties in the market is its different-bulb-sizes-fit-differentsales-channels approach. Even the smallest bulb of ‘Table Dance’ can be used for flower forcing in any part of the world. Expectations are equally high for ‘Astana’, ‘Corvette’, ‘Eldoret’, ‘Redford’ and ‘Bellville’, each of which were sold to large scale flower farms. Given the number of lily introductions in any one year, relatively few have a high profile the second year, Arno said the company’s focus is on varieties with an extended life cycle. “The goal is to create a number of super lilies to be propagated by bulb farmers over an extended period, that will remain available for years to come.”

November/December 2016 | www.FloraCultureInternational.com

>>> 13

Lilies but also to achieve our number one goal: offering exceptional customer service.”

Healthy bulbs

Left to right Nic, Arno, Rogier and Niels Mak

Mak Breeding’s motto is to put their customers’ business first. “Mak lilies should return high yields and appeal to customers with their gorgeous looks. In OT hybrids, for example, we caused quite a stir with our thirdgeneration flowers with even higher productivity and bud count per stem,” said Arno. He added that at Mak going the extra mile for bulb growers comes naturally. “More generally expressed, our breeding programme results in one or a few lilies with high potential, but for a bulb farm it would take years and lots of money to ‘bulk up’ supplies and bring the bulbs to market. Important investments in our own micropropagation lab help us not only speed up the rate of increase by as much as ten times Bellville ®

Palazzo®

www.FloraCultureInternational.com | November/December 2016

There is no official figure but it is believed there are 4500ha worldwide of lily bulbs grown for cut flowers. Today Mak Breeding works with around 750ha of land, producing in excess 250 million bulbs annually with the majority destined for Dutch flower forcers and export. “But company size is not the most important thing to focus on,” emphasized Rogier adding that in an industry frequently plagued by pests and diseases healthy, hassle-free bulbs for producers deserve much more attention. The most unwelcome quest of all is the dreaded Plantago Asiatica Mosaic Virus (PlAMV) which was first detected in 2010 in Dutch greenhouse lily flower production. “PlAMV causes a lot of frustration in that despite all the time, money and energy put into securing a clean, hygienic working environment the virus continues to haunt the sector. PlAMV is also a terrifying virus as it can spread with lightning speed with up to 80% product loss in greenhouse production, whereas in others no damage is reported.” The challenge is to keep far from it. “Virus-free starting material is one of the most important core Valverde®

values of our company. We have put forward a very strict security regime that allows us to identify, track and control the spread of the virus as quickly as possible. Our brother Niels carries out the breeding work and when a new variety is ready for the market, bulbs are propagated using tissue culture techniques and scaling. The clean bulblets are then grown on in our greenhouse. From there they move via the front part of our processing hall to the land to be harvested and transported to a different location before the semi-finished starting material is delivered to bulb farmers. There are strict, hygienic measures and all working stations and product flows are separated. We always move forward while never taking a step back. But eventually the supply chain as a whole is as strong as its weakest link. As the trade in lily bulbs is a global business, it is impossible to control every aspect of it. What makes the situation even more complex is that while some viruses can be easily recognized and others not, some viruses are harmless, such as ArMV and SLRSV, but simply not accepted by strict plant regulation laws abroad. And different viruses can strengthen each other.”

Lily profiles

Arno breaks the market up in five lily groups: Orientals, OT-hybrids, Asiatics, LA-hybrids and Longiflorums. Redford®

Jantine®

“Asiatics and LA-hybrids cater more or less to the same customer. The buyer’s profile for Orientals and OT-hybrids is comparable, while in the long run Longiflorum will be replaced by LO-hybrids.” At first sight, it is not easy to distinguish OTs from Orientals. “In bulb production as well as flower forcing OTs are stronger, more disease-resistant than Orientals. As a result, they require less crop protection products and are more sustainable. Moreover, they feature showier blooms with buds gradually showing their colour as is the case with our new dark pink OT-hybrid ‘Dalian’,” said Rogier. Trumpet blood also exhibits vigorous growth in flower forcing and relatively quick crop times. Orientals are slowly losing ground because of their higher costs. “Meanwhile the looks of TAs (trumpet x asiatics) exclusively feature large blooms in bold colours. LA-hybrids have overtaken the Asiatics. In TAs we can see a clear step forward compared to LA vase life, colours and bud count per stem. Once in the vase, LAs are getting paler day by day, their buds don’t open well and you need extra flower food to get your last flower to bloom,” said Arno.

Lily Looks

An exciting new step in the lily business was taken by Mak and its licensee holder Wetering Pot Eldoret ®

Lilium, with the launch of an exclusive line of potted lilies which are sold under the Lily Looks brand. Lily Looks comprises four unique series: Tiny (compact Asiatics with bright colours), Sensation (multi-coloured Asiatics featuring exciting flower patterns), Sunny (large flowered, exclusive Orientals) and Double (doubleflowered, self-cleaning, pollen-free Asiatics. Rogier commented, “For Lily Looks we basically adopted the same approach as cut lilies by providing the grower only topperforming , virus-free varieties. Lily Looks is really starting to pay off abroad and new varieties such as ‘Sunny Keys‘ and ‘Robyn’ continue to be added. The market for potted lilies, however, is small with only a handful of companies truly understanding the art of potted lily growing. Quality must be of utmost importance. Consider a pot contains only three bulbs and that each bulb cannot afford to badly perform.” Arno agreed that no matter how good a lily variety is, it has little chance of becoming successful unless it is well advertised and made available commercially. He mentions the annual Lily Days as the ultimate marketing tool. “The Dutch Lily Days event has gained an international reputation. Customers know: you have to be in the Netherlands at this Dalian®

Lily Looks varieties

time to see the absolutely newest in lilies. Nowhere in the world do you find such an important interconnected cluster of lily companies.” As for future plans, Rogier concluded by saying that all efforts are geared toward following the current growth path. “We are really strong in OT-hybrids and orientals and might look at the possibility of boosting Longiflorum sales. Helping the entire industry to sell more lilies and providing inspiration to florists worldwide is the Lily Book. I particularly like the whole stylish atmosphere which is created around the lily. Every attempt to bolster the lily’s image is welcome.” ||| Tabledance®

Astana®

>>> November/December 2016 | www.FloraCultureInternational.com

FCI recently returned from a quick 3-day work trip to Tokyo, where we visited the nationâ&#x20AC;&#x2122;s premier horticultural trade show, Ifex, and embarked on a retail safari to discover the nationâ&#x20AC;&#x2122;s flowermarketing practices and structure of markets. We have articles on two competing flower auctions under the same roof: OTA Floriculture Auction (page 16) and Flower Auction Japan (Page 26). Learn more about flower auctioning 2.0 the Japanese way on page 28. And meet Tomokatsu Kuroyanagi, a representative of JA Aichi. Page 29.

Japan

Starting with an early morning visit to Tokyo’s OTA Market is the most authentic way to experience and understand flower retailing in Japan. Its market grounds host two competing flower auctions under the same roof with OTA Floriculture Auction taking pride in being the country’s largest flower auction in market share.

by Ron van der Ploeg

Mixed colours, not always easy to match

tretching over 38 ha in the industrial outskirts of south west Tokyo with Haneda Airport in the vicinity, OTA Market first opened its doors in 1989. It’s a big, industrial place where lorries are always busy around its huge buildings, including one that resembles the Royal FloraHolland office tower in Naaldwijk, the Netherlands. Every day, except Sundays, the market comes alive with the hustle and bustle of traders buying the freshest fruits, vegetables, fish, cut flowers and potted plants. Its flower section is in a different location on the OTA market grounds than the fresh produce and fish and hosts two competing flower auctions under the same roof: OTA Floriculture Auction and Flower Auction Japan (FAJ).

OTA Floriculture Auction’s chief executive Nobuo Isomura.

The country’s largest

OTA Floriculture Auction takes pride in being the country’s largest flower auction in market share (6.9%), moving around 408 million stems and 7.5 million potted plants yearly through its ‘Dutch’ auction clocks-fitted warehouses. Annually, more than JPY 26 billion of farm fresh flowers and plants are landed and auctioned. Buyers include national wholesalers, with some of these running a cash and carry store at OTA’s premises, event planners and funeral homes. According to OTA, 98% of the flowers are marketed internally for domestic consumption while the remaining is exported, primarily cut flowers to the US and China. A good 17% of the turnover is generated through the sales of imported flowers which are sourced only via importing companies including the largest ones such as Classic, YMS and Otani. Sitting in his wood-panelled office, with the soothing sound of singing feathered creatures from the wild bird sanctuary next door, OTA’s chief executive Nobuo Isomura, who has years of experience in the flower trade, speaks exclusively to FloraCulture International and takes us back to 1989 when the auction was established as a central wholesale market with approval of the Ministry of Agriculture. “Japan’s Wholesale Market Regulatory Law from 1971 classifies wholesale markets into three categories: central wholesale

markets, local wholesale markets and others (under-scale wholesale markets). Central wholesale markets such as OTA Floriculture Auction serve essentially as a giant distribution hub for metropolitan areas, in cities with 200,000 inhabitants or more.” OTA Floriculture Auction is a private company with its roots in intermediate wholesale. “As such we are not a growersowned cooperative such as Royal FloraHolland in the Netherlands. Back in the 1980s the Tokyo Metropolitan Government was responsible for the construction of the Dutch-auction style building and we pay our ‘housing’ rent to the city council,” explained Isomura. Operating in accordance with local government rules and regulations from the Ministry of Agriculture, Forestry and Fisheries (MAFF) comes at a price. “On a regular basis, the auction has to provide Tokyo’s government with accurate pricing information as the city wants to consistently augment transparency with data to avoid overly dominant market positions in floral wholesale. In addition, every two years the city council checks the financial health of our business to predict success, potential failure and progress of the company,” said Isomura.

Unusual market structure

Under the Wholesale Market Regulatory law, anyone who wants to buy or sell flowers and plants >>>

November/December 2016 | www.FloraCultureInternational.com

Japan in Japan will have to acquiesce to an unusual market structure (Figure 1). Contrary to other countries, the role of the government is a less facilitating and a more intervening and regulatory one, establishing clear, linear paths which all stakeholders within the industry are expected to follow. Expressed more generally, wandering side streets by cutting out the wholesale middlemen and selling directly to consumers is not much appreciated and in some cases even forbidden. Meanwhile, government policies focus on anti-monopoly laws and relatively high barriers for imports. The country’s system for marketing flowers is archaic and traditional with long, close and often exclusive relationships between small growers and small wholesalers. But modern at the same time. With the rise of online flower auctions, new concept florist shops such as Aoyama Flower Market, this complex, highly fragmented and regulated system plays a vital role in connecting the growers and consumers. Domestic markets, exports, imports and distribution of ornamentals are dominated by a large number of intermediaries. The market

Picture-perfect Dahlias.

chain offers a mix of different, not always easy to match colours and involves breeders, propagators, growers (with the majority of them united in JA cooperatives, page 29), auction houses, large wholesalers, a relatively high number of bulk-

breaking small to medium sized intermediate wholesalers serving small retail florists, bouquet makers, wedding planners, funeral homes, retailers and a wealthy, somewhat picky and changing consumer who is still willing to

The ultimate guide to flower marketing in Japan Royal FloraHolland, the world’s largest sales platform for fresh cut flowers and potted plants, is proud to announce the launch of 2016 Facts and Figures Japan. Successful entrepreneurs have extensive knowledge of their customers and their competitors using reliable and complete data. Royal FloraHolland’s marketing research experience and extensive knowledge in data analysis and consumer insights have served the floral industry well. Over the past few months, Joost Naber and his team have produced a wealth of information about the Japanese market, its unusual structure, consumer behavior and import and export flows. Drawing conclusions from tables and graphs, 2016 Facts and Figures Japan is the primary data source on flower marketing in Japan. This unique guide is intended to help growers and their customers and all other stakeholders within the floral industry with a keen interest in the Japanese market. Title: 2016 Facts and Figures Japan Authors: Product and Market Information, Royal FloraHolland Pages: 50 Cost: €750 If you are interested in buying the study, please contact Royal FloraHolland’s Joost Naber joostnaber@royalfloraholland.com

www.FloraCultureInternational.com | November/December 2016

pay for quality and convenience, but frequently visits discounters and online retailers at the same time. Over the years, numerous law revisions have evolved to establish operational ground rules. The latest Wholesale Market Law reform goes back to 2009 and was designed to liberalise the over-regulated market, bring more flexibility in commissions and boost growth. It included a deregulation of cooccurrence and payment which means that flowers can be directly delivered from supplier/importer while payment is processed through the auction. The reform also enabled flower auctions to sell directly to third parties (retailers), by-passing the intermediate wholesalers. Now seven years on, Isomura concludes the results have not been impressive. “We may now have more freedom in establishing our commission, but no wholesale market decreased its fees. Operating costs continue to rise and being an intermediary in the industry, we often have to fulfill special requests from both buyers and growers. As all our services are funded by the brokerage fees, the profit margins of

auctions are extremely thin, below 1% on average. Some auctions, for example, provide free delivery services to buyers, while others offer free re-packing for growers as shipping flowers in bulk allows growers important savings. In terms of selling flowers to third parties, deregulation of co-occurrence of delivery and payment, and dealing with foreign buyers, all that is

possible but at OTA they are not common practice.” Isomura added that in the specific case of central wholesale markets they are not only under the control of local government but also by MAFF. MAFF decides the big picture, whereas Tokyo Metropolitan Government sets up guidelines and procedures. But often it is MAFF which

>>>

Hibiya-Kadan Style florist shop in one of Tokyo’s many Ekinaka’s: commercial facilities located inside station buildings serving multiple train and subway lines and each day bursting of activity with crowds commuting to work and school.

November/December 2016 | www.FloraCultureInternational.com

Japan deregulates laws and regulations while the local government is reluctant to change the procedures. The local government focuses on defending the interests of its residents and is frequently indifferent to MAFF plans. “One also should imagine that directly selling flowers to third parties and deregulation of co-occurrence of delivery and payment could disturb pricing, and that could be unfavorable for locals, and dealing with foreign buyers doesn't give any profit to residents either. In daily practice, the control of Tokyo Metropolitan government is much stricter. In the case of such exceptional third party transactions, they must be approved by them first,” said Isomura As for the anticipated law reform for 2017, the impact is expected to be much bigger. “The ruling Liberal Democratic Party (LDP) is trying to reform agriculture and JA (page 29). The bottom line is that they think of the current distribution system through wholesale markets as being too inefficient. Serious talks are now underway emphasizing our raison d’être and added value from our part. Sooner or later, the law will be deregulated and local governments will have no other choice than to obey, because the LDP has big political power. Eventually the market will liberalise forcing us to compete with offmarket dealers. By then, I think we can survive, but for some regional wholesale markets it will lead to a broader financial crisis.”

Chart 1: Japan currently ranks among the six major flower importing countries in the world.

7/15/2015

Import

Japan imports for about JPY 40 bn and is a top-6 importer country Japanese flower import Japanese import increased rapidly, now there is some slowdown due to currency JPY [bn JPY]…

… but Japan is one of the top six flower importing countries in the world [EUR mn]

4000 3500 3000 2500 2000 1500 1000 500 0

30 20 10

Japan Russia UK Netherlands USA Germany 2010

1985 1990 1995 2000 2005 2010 2015F

2013

Source: Japanese Ministry of Agriculture, AIPH 2014, Analysis

Chart 2: Malaysia, Colombia and China are the major suppliers of imported flowers.

7/15/2015

Import

Main import countries are Malaysia, Colombia and China Japanese flower import by country 2008 – 2013 Import by country shows Kenya only represents 3% of import [%, 2013]…

350

Ecuador

Kenya 3% 3% Korea 4% Vietnam 5% Thailand 6%

Tapei 8%

…and import development by country [EUR mn] shows strongest growth for Vietnam (+143%), Tapei (+93%) and Kenya (+83%)

Other 11% Malaysia 24% Colombia 18% China 18%

Ecuador

300

Kenya

250

Korea

200

Vietnam

150

Thailand

100

Tapei

China

Colombia

0 Note: Ethiopia is responsible for only 0,5% of import Source: AIPH 2014, Analysis

2008

2013

Malaysia

Protected floriculture

In Japan, being the prime example of a country heaving reached the age of mass consumption, where the urban population shows less resistance to high agricultural prices and farmers are more powerful in lobbying for protection, the domestic agriculture and thus domestic floriculture is highly protected (Source: Japan’s Agricultural Policy and Protection Growth, Masayoshi Honma). But Isomura believes as much as the industry wants to keep itself safe, it can’t protect itself from everything. And even if he doesn’t say it out

www.FloraCultureInternational.com | November/December 2016

OTA Floriculture Auction is a big, industrial place where lorries are always busy around its huge buildings.

7/15/2015

Import

Chart 3: Flower imports flourished from 1985 to 2010 fueled by a weaker yen against the euro.

Devaluation of JPY had made import more difficult sice mid 2012 Exchange rate Euro (EUR) and Japanese Yen (JPY) 150

140 Bad time for export to Japan

130 Good time for export to Japan

120 110 100 90

2010

2011

2012

2013

2014

2015

Source: DNB

7/15/2015

Consumption

Chart 4: In comparison with other developed countries, the average share of disposable personal income spent on flowers and plants in Japan, JPY 9.614 (€84), is relatively low.

Per capita consumption is decreasing – Purchase comes with age Japanese flower consumption trends Annual purchase per family of cut flowers is steadily decreasing [JPY x 1000]… 14

Average

20's

30's

40's

50's

60's

2 -

… and especially 60 and 70 year olds spend – Ageing trend is hopeful for flower business [JPY x 1000]

70's 2001

2003

2005

2007

2009

2011

2013E 2015E

Source: Japanese Ministry of Agriculture, FloraHolland

20 16

Auction room OTA Floriculture Auction.

loud, the auction boss seems to subscribe to the adage ‘if we want to embrace reality we also have to embrace the rise of the retailer and its imported goods’. Isomura admires the tireless efforts Japanese growers make to grow the most beautiful product in order to be paid the highest price, but outside there is not only a new reality but also a new consumer who is shopping at discount supermarkets. The market share of supermarkets and discounters continues to grow from 19.9% in 1999 to 30.1% in 2014 and from 1.7% in 1999 to 3.4% in 2014 respectively (Figure 1). “As such there’s a need for cheaper priced, imported flowers with a minimum 7-day shelf life. With regards to domestic growers I think we should encourage them to grow different, niche type crops that could only be grown or tailored in Japan with a stronger focus on one specific segment as well as consistency of supply and value for top quality.” Japan currently ranks among the six major flower importing countries in the world (Chart 1) with Malaysia, Colombia and China being the major suppliers of imported flowers (Chart 2). Imported flowers satisfy consumer’s off season demand in Japan from September to March. Flower imports flourished from 1985 to 2010 fueled by a weaker yen against the euro (Chart 3). “In 2015, 20% of all flowers purchased in Japan (in terms of quantity, in monetary value it is about 14%) were imported but this percentage can vary a lot depending on the variety. With carnations, for example, the import level would hover around 50%. Basically, we have nothing against imported flowers, we even appreciate them. Take carnations from Colombia or orchids from Malaysia. It is mainly the government which anticipates two different market segments to emerge: domestic and imported flowers. As such it puts efforts to protect the image and reputation of domestic flower growers. We don’t believe in much difference,

November/December 2016 | www.FloraCultureInternational.com

>>> 21

Japan International buying points

The yen is weakening, consumer spending dwindling but the industry is still far from wilting. Rapid urbanization, decreasing domestic production, higher consumer incomes, a year-round demand for fresh cut flowers and Japanâ&#x20AC;&#x2122;s supermarket in the middle of an expansion drive, force retailers to establish buying points both in foreign countries such as China, Korea and Malaysia. The presence of The Netherlands (tulips, cut hydrangea), widely regarded as one of the hot spots of floriculture, is rather small. This is mainly due to the weakening of the yen, rather complicated import procedures, a strict Plant Protection Law and a market structure and relationships

Figure 1: Japan's flowers and potted plants distribution model. Source: OTA Floriculture Research Institute.

which require considerable time to understand. At the same time it should be highlighted that cut flowers have been free from import duties for a long time. In Japan, some retailers contract with auction houses such as Flower Auction Japan and Kawasaki auction or the classical importers such as Classic, YMS and Otani, who may in turn contract with growers in Africa and South America. Motivating customers to seek out their brand at Japanâ&#x20AC;&#x2122;s premier horticultural trade show Ifex was Baraka Roses, a 34 ha rose farm from Ngorika, Kenya and a first time exhibitor at Ifex. (Page 10).

Transition

Japan, the third largest economy in the world (127 million consumers), is undergoing a major transition. Playing a vital role in the countryâ&#x20AC;&#x2122;s

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changing economy is Prime Minister Shinzo Abeâ&#x20AC;&#x2122;s economic programme, Abenomics, a threearrow policy including a monetary regime shift, fiscal stimulus and structural reform. In floriculture, marketing systems are rapidly transforming, cohabitating with more traditional supply chains. In an increasingly retail-dominated business environment, the current trend in floriculture is cutting out the middlemen, the resellers between the growers and the retailers. Retail stores claim they can take out significant costs compared with traditional third party procurement by providing a measure of convenience (added value), lowering overhead costs and by increasing traceability and coordination. In the absence of OTA auctionâ&#x20AC;&#x2122;s import license, making it highly dependent on middlemen, the question arises

basically they are the same and in the end the consumers really donâ&#x20AC;&#x2122;t care,â&#x20AC;? said Isomura.

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whether it can keep its attractiveness in terms of better prices for retail partners and improved returns for growers. In other words, how fast is OTA moving towards a more direct business model that is now gaining traction, for example the Dutch floral supply chain? “In the end it will also be the way Japanese industry will move,” Isomua said. He added, “Scheduled for next year, the Abe government is to change the Wholesale Market Law as it believes there are too many flower auctions which fiercely compete with each other resulting in highly fluctuating prices. The flower industry is set for a shake-up within two to three years.” As OTA’s fresh produce section and flower section have many of the same customers with the same accounts it might be possible to further strengthen cooperation. “Transportation costs are a major target to reduce. Grouping together flowers and vegetables into a full trailer can be an option though it requires clear choices about the flowers and fresh produce to combine without the detrimental effects of ethylene gas. Also, the majority of supermarkets now have different category managers for produce and floral items, whereas one order form would not only speed up distribution but make ordering for retailers much easier. We can make some exciting combinations; as auctioneers we have much more information about the intrinsic value. The good thing is that we can help retailers ensure the right product meets the right market at the right time. We have extensive and in-depth knowledge; we know what’s ‘best in season’.”

Small family farms

Lying off the eastern coast of the Asian continent, Japan is an archipelago that consists of four main island Honshu, Hokkaido, Kyushu and Shikoku as well as 36,000 smaller islands. With a total land area amounting to 377,688 km2, Japan is the 60th largest country in the world, being slightly bigger than Germany. Still, the country faces a significant

Both growers and traders have relied for too long on the staple ceremonial Bhuddism flowers from which the customer slowly but steadily has moved away.

shortage of farmland. “Arable land is limited as over two thirds of the land is extremely mountainous, dotted with volcanoes (10% of the world’s volcanoes are in Japan) and unsuited for agriculture. This means the majority of the 127 million inhabitants are located on 30% of the total land area. Commerce, industry and agriculture are putting tremendous

pressure on Japan’s (scarce land) resources. The small family farm is still the mainstay of Japanese floriculture with the workforce supplied mostly by family members, a structure that can be traced back directly to postwar Japan. Isomura: “From 1945 to 1952 we were occupied by the Americans, who launched a number of agricultural land

>>>

November/December 2016 | www.FloraCultureInternational.com

Japan reform programmes in an effort to democratize the country. During this period they tried to divide the estates of the big landlords with vast expanses of farmland being confiscated and given to the farmers who tilled them.” At the core of the postwar property law was the principle that a farm should be owned, worked and managed by the same household. This explains today’s presence of so many smallholder flower farms grouped in JA grower cooperatives, based on long family traditions and focused on picture perfectlooking products. JA Cooperatives rely on an extensive, multi-layered distribution network which is not easy to match with retail-led market systems characterised by short lines, standardized product quality, on time delivery and transparency.

Niche versus mass markets

Isomura believes the industry as a whole should not give up without a fight and he is delighted to see growers who seriously match their product strategy to the appropriate channel. “With gentians, for example, there are a few cooperatives that clearly focus on the mass market segment by expanding their growing area and selling flowers in high quantities. Others jump on the bandwagon of on-demand flowers which

Nicolai Bergmann: high-end brand in floral fashion.

for example can be found in the Aoyama Flower Market. This chain of trendy flower shops provides customers with convenient, simple and immediate experience and are setting trends that are now taken up by the younger generation. Both growers and traders have relied for too long on the staple ceremonial Bhuddism flowers from which the customer slowly but steadily has moved away.” Of course there is no such thing as an average Japanese customer. Japanese consumers today, however, do have a set of general expectations that the floral industry must deliver. With regard to colour and product size, 4.5 cm or larger blooms in pink and yellow hues remain firmfavourites. Japanese flower purchasers prefer to see this kind of flowers handtied into petite bouquets. Not

www.FloraCultureInternational.com | November/December 2016

Aoyoma Flower Market: Fire hues of red, orange and yellow are updated with sophisticated touches of copper, honey and caramel.

only because living spaces are small but also because of jam-packed metro and commuter trains smaller bouquets are less likely to be damaged. In comparison with other developed countries, the average share of disposable personal income spent on flowers and plants in Japan, JPY 9.614 (€84), is relatively low (Chart 4). In Japan, flowers are frequently purchased as a gift. Facing a declining number of young consumers among the ranks of flower purchasers, the Japanese floral industry focuses its marketing efforts towards encouraging the purchase of flowers for personal use and creating additional floral holidays for which flowers are considered an appropriate gift. Meanwhile, several exciting public relations campaigns with Olympic 2020-themed floral designs have been unveiled (opposite page). |||

Tokyo florists design Victory Bouquet ahead of 2020 Olympics Reaching out to Japanese consumers and media, the Tokyo Metropolitan Association of Flower Promotion has rolled out several exciting public relations campaigns with an Olympic-themed floral design contest generating positive floral stories in the news. Mr. Ryoji Kato, manager of Tokyo-based flower auction OTA Floriculture Auction told FloraCulture International that his company is also home to the secretariat of the city’s Metropolitan Association of Flower Promotion whose members include flower auctions, floral wholesalers, retail florists and a handful of flower growers in Tokyo (the flower production of the greater Tokyo area is very limited with only a few growers located on small islands far from the city centre). According to Kato, the Association is bursting with activity conducting several public relations campaigns to generate positive floral stories in the news and among consumers. To celebrate the excitement and the spirit of the 2016 summer Olympics in Rio de Janeiro and in anticipation of their own Olympics in 2020, 103 Tokyo-based florists participated in a floral design contest. Demanding artistic abilities and the highest standard of operational craftsmanship was the creation of a Victory Bouquet for sportsmen. Kato emphasised that the IOC was not involved and that it was not about designing the official Tokyo Olympics bouquet for 2020. “It’s just a sector-based initiative

Omotenashi Flowers (which loosely translates as ‘welcome flowers’) with international visitors arriving at Tokyo’s Haneda airport being treated to sumptuous floral installations.

Victory Bouquet Awards Ceremony.

in which the entire supply chain works together to promote flowers. Now in its third year, the Victory Bouquet Contest has grown from strength to strength with this year’s interest being particularly strong with lots of people being fully into the Olympic spirit.” Kato said that adding to the Association’s promotional activities are Hana-iku, elementary and very basic flower arranging classes at primary schools in Tokyo as well as Omotenashi Flowers (which loosely translates as ‘welcome flowers’) with international visitors arriving at Tokyo’s Haneda airport being treated to sumptuous floral installations, featuring Japanese flowers, in the arrival hall. Also on the agenda there is even a seminar highlighting flowers as a simple solution to improve emotional health. Coordinating nation-wide campaigns is the Japanese Flower Council which received acclaim at home and abroad for their Valentine’s Day campaign. In Japan, Valentine’s Day is celebrated differently than in other countries: on February 14th it’s the women who do the gift giving, offering the men in their lives chocolate. One month later, on March 14th, it’s White Day and men return the favour. As such it has been rare for Japanese men to give their loved ones flowers on Valentine’s Day but the holiday is growing in popularity and stakeholders

Mr. Ryoji Kato, manager of Tokyo-based flower auction OTA.

within the Japanese flower industry never fail to mention that flowers are the best gift of love on this day. Japan is the definite hot spot for trends and high-tech innovations, but the shift from traditional promotional campaigns to digital ones is still something for the future. Kato said that the use of digital media is currently limited to a consumer portal that allows individuals to view flowers and plants available on the Japanese market including information on their official names and care tips.

November/December 2016 | www.FloraCultureInternational.com

Japan From September to March African rose exporters look to expand their business into Japan. While domestic flowers remain very popular with consumers, decreases local cut flower production, climatic variance and ageing flower farmers with no successors create a bigger opportunity for imported flowers. FCI sat down with Mr. Masashi Samuta, Chief Executive of Flower Auction Japan (FAJ) where international trade represents up to 20% of cut flower sales.

Imported roses in Japanese supermarkets not yet in full bloom

iving apart together with OTA Floriculture Auction under one roof is the Flower Auction Japan. Founded in 1990, FAJ’s annual sales are 12.3 billion JPY in cut flowers and 10.6 billion JPY in potted plants.

Different from the competitor

The auction’s Chief Executive Mr. Masashi Samuta takes pride in mentioning that FAJ is the nation’s second largest auction emphasising that his company is different from its competitor. “Contrary to cut flower-focused OTA Floriculture Auction, potted plants are big for FAJ, accounting for 45% of their sales volumes. Over the past few years, however, we have seen fewer potted plants sold at our auction as an effect of the housing bubble in the US from 2007 to 2009, the Lehman collapse in 2008 was also felt in Japan where the production area of potted plants decreased dramatically. Cut flower production also exhibited area decreases which we could compensate for by attracting more domestic growers who picked our business for our unique selling point. Also we covered the shortage by importing flowers. In potted plants, however, there is a very strict Plant Protection Law that prohibits the entry of plants with soil attached. At present the potted plant market is stable.”

Imported flowers

by Ron van der Ploeg

FAJ first started to import cut flowers from Kenya (roses), Colombia (roses, carnations), Malaysia (Chrysanthemums), Taiwan (orchids) and Holland (Syringa, cut Hydrangea,

www.FloraCultureInternational.com | November/December 2016

Left to right Hiroko Okuwaki, FAJ chief executive Masashi Samuta and Akiko Ishii.

Amaryllis, cut Hyacinths) into Japan over 15 years ago. FAJ’s international trade, representing up to 20% of their cut flower sales, is certainly not business as usual. The processes behind importing roses from Kenya for example often cause some confusion and frustration for all parties involved, sometimes resulting in costly delays. Meanwhile Samuta said that retail sales have risen slower over the past few years than FAJ had expected. “When we started to import roses from Kenya, we anticipated flower sales at supermarkets to blossom, but actually 80% of the imported roses from Kenya are sold in the traditional florist shops instead of supermarkets.” When asked what would help to boost import efficiency, Samuta mentions there’s an overall

need for a longer shelf life and much lower prices. “Despite sales actions with supermarkets, the price of the roses doesn’t seem to match the customer’s demand. Additional costs for transportation add substantially to the final price. We find that the cost for shipping by air via Dubai is very expensive, ranging from $3 to $4/kg. So we think the only way to solve this is sea freight,” said Samuta, who agrees that the decision on whether to send flowers from Kenya by sea is mostly a function of the volume of the shipment and its value. For now the nine million stems forecasted for this year will not be reached which makes sea freight too expensive thus far.

Supermarket versus flower shop

It’s a fact that Chrysanthemum are the most popular flower in Japan,

Readily available seeds and royalty free varieties are also not helping the Japanese grower as they mostly run small holder flower farms, lacking financial resources to properly protect their breeder’s rights. MAFF is aware of the problem, but at the same time unwilling to pay for the registration of PBR’s.

Possible merger?

a symbol of the country itself. The world’s oldest continuing monarchy is often dubbed the Chrysanthemum Throne and the imperial crest features a stylized mum blossom and the Chrysanthemum is also depicted on the 50-yen coin. But the FAJ boss ensures that roses also rank high in popularity. “The Japanese really like roses, but most of the time they’re buying domestically grown top quality roses at their florist. Maybe they are still not fully used to cheaper roses from abroad,” said Samuta who anticipates growth in sales for supermarkets to remain resilient. “Supermarkets are taking more active roles in selling flowers. Supermarket giant Aeon, for example, continues to strengthen its position in this category, while others also gained experience with flower departments in their stores. The biggest challenge, however, is that flower farms are so small that supply is not sufficient. “ Another reality is that the number of flower shops continues to decrease from approximately 20,000 in 2000 to 12,000 in 2016, while supermarkets keep on expanding their floral sections.

Picture-perfect flowers Meanwhile, the company is throwing its weight behind international initiatives to back Japanese flower growers whose average age is between 70 and 75 (!). One booth at the Royal FloraHolland Trade Fair in the Netherlands this month, a joint presentation of FAJ and Kochi prefecture, aimed to improve long-term relationships with

European buyers, boosting growers’ profitability while helping them with increasing their international market penetration. Japan’s presence at international trade exhibitions comes at the right time, as Japan has set an ambitious goal for the next ten years: to more than double it flower exports, currently worth 8.6 billion JPY. These are trying times for growers from Japan. At home, they find it increasingly difficult to generate enough income with their exclusive, picture-perfect flowers such as drop dead gorgeous Gloriosa, Lathyrus, Lisianthus and gentians so extra motivation in order that they continue to grow their specialty products is more than welcome. Success on the Dutch market, dubbed the floral gateway to Europe, depends on the presence of a local representative. FAJ, for example works with strategic manager Mr. Gert-Jan Jungerius, who is in daily contact with the Dutch buyers. Albeit only six to eight weeks on the market in November, Japanese gentians enjoy a stronger brand recognition year after year but there are still challenges to overcome. Right now it’s the lack of supply volumes; only 20 of the 100 Ashiro growers export, and the relative high price which causes the bottleneck. What’s more, Japanese growers expect Dutch growers to take up gentian production sooner or later. Growing techniques are easy to learn, they believe and if Dutch growers succeed in setting up a sizeable production then Dutch gentian buyers can make important savings on transportation costs.

FAJ auctions run on Monday Wednesday and Friday and attract around 500 buyers per day. Up to 70% of the flowers and plants are pre sold (five major buyers) while the rest of the stock is auctioned the usual way through six auctions clocks.

When asked about his plans for the future Samuta concluded that the main goal is to win from the competition in order to increase their market share. “As domestic production is under threat we will be forced to cover product shortages by importing more. We also look for new concepts in order to boost supermarket sales.” Any possibility a big merger between Japanese auctions will be announced soon? “The domestic production is indeed decreasing but still sizeable. Things should not been done in a hurry as this will only create confusion on the market in terms of pricing. As for a possible merger, it is important that both companies share the same vision when it comes to promoting domestic flowers and plants and expanding the market. Meanwhile, large retailers continue to gain ground and power. This makes an even stronger partner at the auction level also necessary. Auctions will only merge if there are two companies sharing the same vision.” |||

FAJ has its own purpose-built flower testing room.

November/December 2016 | www.FloraCultureInternational.com

Japan Flower Auctioning 2.0 or New Auctioning are a few of the buzzwords at the Dutch flower auction Royal FloraHolland these days. Truth be told: Aucnet Japan, operating from a fancy office tower right in the centre of Tokyo, already sowed the seeds of flower auction’s new style back in 1985.

Flower auctioning 2.0 the Japanese way

higeru Honda, Sales Manager of export flowers at Aucnet, said, “Aucnet was one of the first to introduce a satelliteconnected auction for used cars in 1985. Twelve years later the company auctioned the first batches of cut flowers online, using its own bespoke software. Online sales of cut flowers have been growing steadily for Aucnet over the past few years. Today, Aucnet flower and potted plant auctions run on Sunday, Tuesday and Thursday.”

Stark weather contrasts

Commenting on their recent sales (Mid-October 2016) Honda said that the industry has had its fair share of challenges, experiencing some stark weather contrasts over the past few months, with a wet and cloudy period which encouraged botrytis, mildew and other diseases. As such, supply volumes were limited. In Chrysanthemum, a top seller at this time of year, demand exceeds supply, causing anger among buyers who are left emptyhanded. In exports, the situation is more or less the same as we would like to sell more gentians through Royal FloraHolland but we are unable to harvest enough stems. Prices, approximately one euro per stem, are relatively high.”

FloraMondo

by Ron van der Ploeg

Honda follows Royal FloraHolland in the news and its remarkable headlines with regards to double digit growth in FloraMondo auction presales. And despite the auction’s propaganda on a 10% higher price for growers and Floramondo’s more market-driven approach, he believes more does not always equal better. “Japanese auctions have been operating such a presales model for many years but it now losing ground. Our growers loved it

www.FloraCultureInternational.com | November/December 2016

because of the much higher prices they were receiving, but Japan has over one hundred flower auctions and the smaller ones in particular sometimes sell up to 60 to 70% of their supply via pre-sales. As such, the number of the stems and product quality at the auction clock was decreasing day by day, making the auction clock increasingly unreliable. So far I haven’t had time to get more acquainted with FloraMondo. Overall, the system appears to be user friendly, but basing my view on our own experience with presales, it worries me as we believe that an increased focus on presales will cause the auction clock to die. We always thought of the Dutch clock as being the absolute best in the world. If the auction clock disappears, how will prices be established? At Aucnet, our buyers are predominantly smaller retail florists and they follow the pricing set at the Royal Floraholland clock every day. For them it is an important price reference.”

Dedicated expert

Honda presumes that pre-selling Japanese gentians through FloraMondo involves much more than casually or occasionally putting your offer online. As in the case with traditional clock sales and intermediary sales, growers from abroad will always need a dedicated expert. That’s why he is so happy with his current handling agent Jeroen Vrolijk who is in daily contact with Dutch buyers and helps Aucnet decide day to day what sales channel, clock or intermediary, to use. “If Jeroen finds an interested buyer he will sell our gentians directly via Connect. Today, however, direct sales make up less than 10% of our sales, all other flowers are auctioned.”

Commenting on the opportunities for selling flowers through retail, Honda believes big retailers don't see the benefit of using flower auctions. “They want to buy directly with regular pricing and standard quality but in Japan the problem is that growers cannot guarantee product volumes. That’s why we have so many Chrysanthemums and carnations imported from overseas.”

OurBloom: no impressive results so far

As for the future plans within the Aucnet organisation, Honda thinks they do not really differ from other flower auctions around the world. Also at Aucnet the focus is on further improving and developing online sales systems. “Ultimately we have to find a solution to connect growers directly with retailers via the internet as a mismatch in supply and demand is currently stunting further growth. From our daily conversations with buyers, we are learning what their needs are and sometimes there are major mismatches.” Shigeru Honda, Sales Manager of export flowers at Aucnet.

Aucnet flower and potted plant auctions run on Sunday, Tuesday and Thursday.

With its history interwoven with Japan’s post-war agriculture, the National Federation of Agricultural Co-operative Associations, also dubbed JA, has played a major role in the development of the country’s flower marketing system. FCI sat down with Tomokatsu Kuroyanagi, a representative of JA Aichi. Aichi is one of Japan’s major agricultural regions and a leading producer of many crops. JA appears to be one of the most dominant institutions in Japanese agriculture, its influence pervading many aspects of flower flower growers' lives.

by Ron van der Ploeg

According to Honda, one of the company’s strongest selling points is its state-of-the-art bidding system with its own software running a reducing price auction or Dutch auction. In 2012, they teamed up with Chinese OurBloom a Chinese horticultural company with innovative online activities. “At first sight, the future looks promising with Chinese demand for flowers on the rise. But we are not satisfied with our cooperation in China. China is a huge market, but the quality of domestically produced cut flowers is rather low. Above all, what is missing is good logistics. That is really a big problem as the Aucnet system is a hybrid system consisting of an bidding system plus logistics services,” concluded Honda. |||

A giant in transition

he JA has two principal roles. Firstly, it is a purchasing cooperative that helps small local businesses remain competitive. Purchasing agreements are used to increase bargaining power or obtain economies of scale in buying fertilizers for example and crop protection products. Secondly, JA provides members with a diverse portfolio of consulting services, assisting growers with crop management to improve product quality.

Complex structure

Kuroyanagi pointed to the rather complex structure with regard to JA membership. Since its interception in postwar Japan, JA was created for farmers and to this day it’s still the main criteria to become a full voting member. However, over the years, non-farming ‘associate members’ came on board using some of JA’s resources, for example its banking system.

“According to 2013 statistics by MAFF, JA had 4.61 million members and 5.36 million associate members nationwide, spread throughout 700 cooperatives across 20 different regions. One of these regions is agricultural powerhouse Aichi (7,428,769 inhabitants, capitol Nagoya, turnover Aichi flower business 30 billion JPY and Aichi fresh produce 80 billion JPY) that is the country’s biggest hotspot for flower growing, Chrysanthemums in particular. Aichi is situated in the middle of the Japanese archipelago and hosts an estimated 40,000 JA members of which 70% are professionally involved in agriculture which includes fresh produce, rice, meat, poultry and of course flowers, grown by an estimated 1,000 producers.”

nation-wide, but they are also the primary source of all lending and insurance for agricultural businesses. Membership is voluntary but JA represents almost all farmers and growers. “In terms of flower and potted plant growers, 70% of those selling their products through flower auctions, such as OTA, are JA members”, said Kuroyanagi.

>>>

Revenues

Some of JA’s revenues come among other from commissions earned from product distribution

November/December 2016 | www.FloraCultureInternational.com

Japan

In the floral industry, JA’s role extends to collecting flowers in bulk using distribution hubs where products are graded. Kuroyanagi added, “Another important role is cash management; JA asks buyers for payment which is then divided amongst growers. Usually, growers receive their money within ten days.” In one day a single JA cooperative might host a multitude of grower groups by variety such Chrysanthemum or rose growers. However, one constant is that the federation pays an average price for the grower’s products, which are rendered generic as they are sold under the JA brand. This means that both top and mediocre growers receive an average price and Kuroyanagi agrees the risk to end up with only bad growers is clearly present. “That’s why we try to set quality standards and focus on product uniformity.”

Demand is changing quickly as the younger generation uses less ceremonial Bhuddism flowers.

Tomokatsu Kuroyanagi, a representative of JA Aichi.

Domestic growers first

JA sells its floral product mainly through two direct channels, apart from auction markets: supermarkets and funeral homes/

www.FloraCultureInternational.com | November/December 2016

wedding planners. JA runs its own A-Coop supermarket chain including 40 stores in Aichi. They sell not only produce and flowers from Aichi, but also goods from other prefectures in addition to imported flowers as customers desire year-round availability. In terms of flowers, they mostly sell simple bouquets. A-COOP stores are usually located in rural areas with a high demand for buddhist bouquets. However, demand is changing quickly as the younger generation uses less ceremonial Buddhism flowers such as Chrysanthemum. “Aichi is particularly well-known for its Chrysanthemum production so JA currently helps growers choose other less mainstream varieties, such as Anastasia, runs comparision trials or recommends switching to another crop. Kuroyanagi stated that the organisation exits because of domestic growers. Imported flowers, such as roses from Kenya are a very sensitive issue. “Generally speaking, we run a sales department that is heavily linked with domestic growers. Our policy is to sell their products at the highest price for the lowest costs.” Funeral homes are big customers. “Up to 7 % of the 30 billion yen is represented by sales to funeral homes, in euros that would be around 7% of €250 million for funeral homes”, said Kuroyanagi. There are about 900,000 deaths a

year in Japan; 99% of the deceased are cremated. The average cost of a funeral in Japan is around 23,000 dollars, one of the highest in the world. Much money is spent on Buddhist ceremonies with funeral homes working out every detail. Coffins and hearses are often covered in a sea of Chrysanthemums. At the Ifex show, Hibiya Kadan showcased modern funeral flower arrangements using a mix of fresh cut flowers. “In Chrysanthemums, the trend is that buyers request different types of Chrysanthemums. JA puts a lot of effort into convincing growers to first do market research and then set up a new production, adopting a more demand-driven approach. This is a huge change especially because Asian growers tend to be very conservative. Fortunately, in Aichi prefecture a new generation is now ready to take over and will hopefully be able to expand their growing areas”, enthused Kuroyanagi.

Confidence in the future When asked about JA’s future, he mentioned that Prime Minister Shinzo Abe is a strong advocate for doubling farming incomes and presented plans to reform the country’s giant agricultural cooperative system because he thinks it can help increase farmers’ incomes. “They are now considering transforming JA into a wholesale company. Product availability has to be increased to operate year-round, either through domestic supply or imports. We believe the number of growers and production areas will further decrease because of ageing growers and growers that will sell off their land to real estate developers. JA will continue to support growers with better profits and make the whole of agriculture more attractive. Job number one is to decrease the cost of packing and shipping. JA recently opened an ultra-modern distribution hub in Atsumi. This development is an act of faith and a show of confidence in the future of the flower industry in Aichi”, concluded Kuroyanagi. |||

2017

AIPH INTERNATIONAL GROWER OF THE YEAR AWARDS

From the President

Bernard Oosterom, AIPH President

“We invite all those linked to horticulture to celebrate with us and the leaders of the ornamental horticultural industry at the International Association of Horticultural Producers (AIPH) International Grower of the Year Awards 2017. We are coming together to celebrate the world’s best in ornamental horticultural production across Finished Plants and Trees, Young Plants and Cut Flowers. Nine Ornamental growers, from Belgium, China, Colombia, Denmark, The Netherlands, Russia and UK, have reached the finals. We are proud to host the awards in partnership with our Founding Partner, FCI, and Headline Partner, Royal FloraHolland. On this night we recognise best practice in ornamental horticultural production by the top ornamental production nurseries from around the globe, celebrating the expertise and energy they give to horticulture. Join us at the Awards Ceremony on Tuesday 24 January 2017 at the Colosseum Theatre in Essen, Germany. As you will see the awards run alongside IPM Essen 2017, the world’s leading horticultural trade fair, allowing visitors to get the most of their time at both events. The evening ceremony includes a drinks reception, gala dinner, live entertainment and provides a great opportunity for international networking. We look forward to seeing you there.”

Early bird tickets Don’t miss our early bird tickets which are available until 31 December at €180 per person, and €170 per person for table bookings of ten people. Find out more about the event at www.aiph.org/groweroftheyear or for bookings contact Maria Wallin on +44 (0)7825 816 266 and at maria.wallin@aiph.org

Finalist Cut Flowers Flores El Capiro S.A. - Colombia

Delivering flowers via the best sea freight transport solution Flores El Capiro is one of the largest chrysanthemum growers and container exporters in Colombia and indeed the world. Delivering flowers to customers via the best sea freight transport solution and the best packing alternative, its container packed cut flowers reach the most distant markets, including Australia, with a transit time that exceeds thirty days. Capiroâ&#x20AC;&#x2122;s planted area covers 75 hectares, with plans to reach 100 hectares and increase productivity to meet with customer demand. For customer satisfaction, Capiro assures the best quality, freshness, vase life and value for its customers at an affordable price, and seeks constant product innovation looking for the most beautiful and best

performing varieties. It also provides its customers with added value products such as bouquets and flower enhancements like tinting. www.capiro.co

Finalist Cut Flowers Van den Berg RoseS - The Netherlands

A brand that stands for quality, reliability and innovation Van den Berg RoseS has a long 41-year history of being in the rose business and great experience in growing. It is one of the main large-scale international rose growers from the Netherlands where it grows large-bloom roses on 120,000 square meters. The company has additional production locations in Kenya and China where it grows medium-blossom roses. Its Dutch roses target the flower specialist and the high service retail, most Kenyan roses go to supermarkets with the Fairtrade label, and the Chinese roses are sold by wholesale in cooperation with florists.

Van den Berg RoseS is a name and a brand that stands for quality, reliability and innovation (exclusive varieties) with an eye for people and the environment. Its quality roses find their way to wholesalers, florists and end consumers all over the world. www.bergroses.com

www.FloraCultureInternational.com | November/December 2016

2017

AIPH INTERNATIONAL GROWER OF THE YEAR AWARDS Finalist Finished Plants and Trees Boterdaele Erik bvba - Belgium

Focuses on high-quality production

Boterdaele Erik bvba is a family business situated near Ghent in Belgium. The owners, Erik and Isabelle, have grown the company considerably and today its produces and sells 500,000 plants a year out of its cultivation area of 4,2 hectares.

Finalist Cut Flowers LLC TK-Podosinki - Russia

Bringing beauty and harmony to each home

By creating partnerships, with Addenda and BE-plants, Erik and Isabelle have proven that smaller family firms can gain a very strong market position. This was undoubtedly one of the firms' assets in winning the Belgian competition, Ornamental Grower of the Year, along with its very strong approach in the field of sustainability and quality. The companyâ&#x20AC;&#x2122;s clients are found in the Benelux with European

branches. The target group is composed of export companies, cash and carries, large commercial businesses or garden centre groups. It focuses on labelling, short delivery terms and highquality production. www.boterdaele.be

LLC TK-Podosinki is a leader in the production of roses, as cut flowers in Russia, with a mission to bring beauty and harmony to each home. It has a stable production of high quality flowers which comes as a result of using innovations in agro-technology. By investing in the business it plans to expand production even further. The company has strong control over all of its technological processes and regularly seeks innovation. It follows a permanent monitoring system for new rose varieties, choosing only high production and disease resistant varieties. It also uses highly qualitative materials in planting through direct cooperation with Dutch and German breeding companies. It has a good view of the market and invests in the most effective

methods of advertising such as using the flower packaging for direct sale promotion. www.roseline.ru

Royal FloraHolland is Headline Sponsor Royal FloraHolland has been a member of AIPH for years. The cooperative also supports the Horticultural Entrepreneur Award where the most innovative and enterprising company from the Dutch horticultural sector is awarded. Winners of this competition are also recommended for the International Grower of the Year Award. The auction feels strongly about promoting innovation and successful entrepreneurship in this sector and warmly support both awards.

November/December 2016 | www.FloraCultureInternational.com

Judges Chair - Vic Krahn AIPH Past President Andras Treer Hungarian Ornamental Horticulturists Association Bill Stensson Sheridan Nurseries, Canada Tim Edwards Boningale Nurseries, UK Tetsu Nomura Japanese Landscape Contractors Association, Japan Jaap Kras Lawyer, Netherlands Peter van de Pol Management Schoneveld Breeding, Netherlands

Finalist Finished Plants and Trees Gui Zhou Miaofu Urban Horticulture Co.,Ltd - China

Providing products of multi-varieties and high cost/efficiency

Gui Zhou Miaofu Urban Horticulture is a pioneer in nursery stocks production and landscape construction in China. As a subsidiary of Miaofu Shareholding Group, the company mainly targets the middle and high-end market. In 2015 its sales volume accounted for 15% of the total sales volume of the Group while the annual growth rate was over 36%. It has constructed an experimental building covering 3,000 square meters, a high-standard production base at 1,500 hectares and an intelligent greenhouse at 70,000 square meters. Every year the company produces about five million nursery stocks of different types and sizes for the market, including 56 species and 42,000 modelling plants. The aim

is to provide products of multi-varieties, fast shaping, large-sized, high cost/efficiency, and easy to survive, etc. www.miaofuchina.com

Finalist Finised Plants and Trees Boomkwekerij Ebben B.V. - The Netherlands

Perfecting the art of growing trees Ebben Nurseries is a real Dutch family tree business that has grown from generation to generation. Since 1862 successive generations have perfected the art of growing trees. Today, Ebben Nurseries is an innovative company in the horticultural sector presenting a healthy and wide range of plants and with more than 154 years of knowledge and experience. Its main focus lies in the quality of not only its products, but also its services. With the best experts, the company has grown into one of Europeâ&#x20AC;&#x2122;s biggest tree nurseries, conveying a clear vision on the experience of greenery. It focuses on the species' natural growth habit and its sustainable cultivation has the minimum possible impact on the environment, so its trees are strong and resilient. www.ebben.nl

www.FloraCultureInternational.com | November/December 2016

2017

AIPH INTERNATIONAL GROWER OF THE YEAR AWARDS Finalist Young Plants Beijing Nabobay Horticutral Co., Ltd â&#x20AC;&#x201C; China

Developing with a strong momentum in the rose industry Nabobay is developing with a strong momentum in the rose industry. Its finished plants are welcomed by markets across more than 20 provinces in China and internationally, its products find their way into markets in Europe, Asia and Africa. The company has established production bases covering a total area of 6.59 hectares and cultivates mover 32 million plants each year. 18.2% of its total annual trade value is from export trade. The company has built mechanised and intelligent greenhouse of 10,000 square meters and propagation greenhouse of 80,000 square meters. Moreover, it also established a complete set of

China Rose Cultivation Technical Specification, bringing about standard cultivation, technical innovation and environmental protection production, as the reference standard in rose industry of China. www.nabobay.net

Finalist Finished Plants and Trees Bransford Nurseries - UK

A pioneering producer of roses, trees and shrubs in pots Bransford Nurseries was formed by John Tooby in 1961 as a pioneering producer of roses, trees and shrubs in pots. Focussing exclusively on the production and sale of ornamental plants to retailers the nursery became an important and respected supplier. By 1993 the name of the business had been changed to Bransford Garden Plants and was one of the first nurseries to offer a year-round promotional calendar of new and sort after plants with full point of sale material. An on-going research and development program dealing with plant finders, breederâ&#x20AC;&#x2122;s agents and young plant suppliers was established resulting in frequent new plant introductions focused

on impulse sales for garden retailers. Investing in new and improved production facilities has been central to enabling the company to increase production and sales, reduce wastage and improve profitability www.bransfordwebbs.co.uk

November/December 2016 | www.FloraCultureInternational.com

Finalist Young Plants Graff Kristensen A/S – Denmark

Partnerships with other growers all over the world Graff Kristensen A/S was founded in 1931 on the basis of a wide horticultural assortment for the local market. The nursery is one of the world’s leading hibiscus growers in terms of breeding, quality, innovation and in evolving partnership with other growers all over the world. Since the millennium, breeding has been an important part of the global activities of the company, which today is owned and managed by the third generation of the family, with the fourth generation working in the nursery. Graff Kristensen A/S is thinking and working with a green agenda. It is a staple MPS A grower, and has a specific agenda on implementing IPM techniques in its production and breeding departments. The nursery achieved the ‘Innovation Award 2016’ from the branch organisation Danish Horticulture. www.graff.dk and www.graff-breeding.com

Why enter? Demonstrate your professionalism Raise your profile Get the edge over your competition Increase customer satisfaction Attract new talent and customers Boost staff enthusiasm and commitment Benefit from a valuable commercial marketing tool

www.FloraCultureInternational.com | November/December 2016

Big things happen if you are a winner in the AIPH International Grower of the Year Awards. As a winner you will raise the profile of your company on a global scale and improve your reputation as a leading, high quality grower. With wider industry recognition your company will become even more desirable as a place to work, attracting new talent, increasing staff morale and decreasing staff turnover as a result. An AIPH International Grower of the Year Award is a priceless marketing tool, supported by global coverage from the international trade media providing winners with maximum coverage. In fact winners receive an estimated €4,000 worth of trade media advertising. PAST WINNERS “While we’re humbled by the support and recognition we’ve received from the industry, the AIPH International Grower of the Year award is really an acknowledgement of all of the incredible employees that make up the Costa Farms family. It’s exciting to see how the award has increased our team’s drive to continue to grow, improve, and be the very best we can be. It was an amazing way to kick off the 2016 season!” Jose Costa, Executive Vice President of Costa Farms foliage division, Gold Rose Winner 2016. “It’s feeling a bit like winning the gold medal in the Olympics. It’s a great way for a company and its staff to be rewarded. I recommend everybody who thinks they are out standing in our industry to apply for this award.” Mr. Leo Hoogendoorn, CEO Florensis, winner of the 2016 Younng Plants Gold Award.

2016

AIPH INTERNATIONAL GROWER OF THE YEAR AWARDS

Conference In October 2016, the UKâ&#x20AC;&#x2122;s Commercial Horticultural Association brought together the best brains in horticulture, many of whom have their own strategic success stories, to provide all growers with help in overcoming at least some of the problems they face in the day to day running of their business.

GrowQuip brings together the best brains in horticulture C

onference attendees were able to view the latest products and services available to commercial growers from major suppliers to horticulture. On day two of the event, the exhibition was open free of charge to all growers.

Proven Winners

by John Sutton

Proven Winners, the number one plant brand in the USA, was a success story in the spotlight at the recent GrowQuip conference in the UK. Marshall Dirks, marketing director of Proven Winners USA, spoke of the fast-changing consumer environment that he and his fifteen colleagues were tracking closely. The aim was to continue building on the current 165 million premium

quality branded plants sold annually. The Proven Winners USA portfolio is of almost 700 varieties exclusive to the brand. The range is continually refreshed: almost 80 novelties will be introduced for 2017. Particularly well received recent introductions have included the award-winning Calibrachoa SuperBells Lemon Slice. Over a hundred business partners â&#x20AC;&#x201C; breeders prominent among them â&#x20AC;&#x201C; support the continuing development of the brand, which is also active in six European countries. Modern IT developments, notably social media and the i-phone, are vital keys to reaching the consumers most in the sights of Proven Winners, said Marshall Dirks.

CHA

The GrowQuip conference at which he was the lead speaker is planned to be an annual event, and was organized by the Commercial Horticultural Association. This is the British trade body for manufacturers and suppliers of plants, products and services to commercial growers. Most of its seventy-plus members have a very significant export trade. The Association provides promotional support for its members in markets worldwide, and co-ordinates exhibits at trade fairs in continental Europe.

Knowledge-sharing opportunity

Proven Winners Begonia variety Summerwings Ebony & Orange.

The GrowQuip conference offered a knowledge-sharing opportunity across most aspects of commercial crop production. Topics ranging from marketing to hydroponics and integrated pest control were

covered by its nine speakers. One was Bruce Harnett, managing director of Kernock Park Plants, a major ornamentals propagating company in the UK. It is the UK licensee for Proven Winners Europe. He spoke about his recent worldwide visits to study the application of automation and robotics to horticulture. His full report is available from the Nuffield Farming Scholarships Trust.

High-density hydroponic production

Alex Fisher spoke about the innovative developments in highdensity hydroponic production technology offered by his young company, Saturn Bioponics Ltd. These focus on vertical engineering, to enable at least a threefold increase in annual yield per square metre. The technology is already in commercial use for strawberries, lettuce, basil and pak choi, and encouraging results at the development stage have been achieved with column stocks. There is active interest in the USA and China. Payback periods are mostly three years or less.

Non-chemical control of thrips

Other speakers included entomologist Dr Clare Sampson of Russell IPM, which designs and sells pheromone lures and biopesticides in over forty countries. The control of western flower thrips and whitefly by non-chemical means is part of her research field. Patterning and pheromone additions to sticky plastic traps have both significantly increased their effectiveness in attracting the adult pests. |||

November/December 2016 | www.FloraCultureInternational.com

International Events November 2016 2 to 4. The Netherlands Royal FloraHolland Trade Fair Aalsmeer. www.royalfloraholland.com/ tradefair 2 to 4. The Netherlands International Floriculture and Horticulture Trade Fair (IFTF). www.hpp.nl 13 to 15. United Arab Emirates Event organisers Messe Essen and planetfair Dubai LLC have announced the 2016 IPM Dubai and WOP Dubai will take place from 13 to 15 November 2016. Once again, the trade exhibitions will be held at the Dubai World Trade Centre. www.ipm-dubai.com www.wop-dubai.com 24 to 27. Turkey 2016 Eurasia Plant Fair/Flower Show Istanbul. info@cyffuar.com.tr www.flowershow.com.tr/en 30 November to 3 December. Turkey Growtech Eurasia, 14th international greenhouse, agricultural equipment and technology trade fair. www.growtech.com.tr 30 November to December 2. United States New England GROWS at the Boston Convention Centre. www.newenglandgrows.org December 2016 7 to 8. United States Irrigation Show at the Las Vegas Convention Center, Nevada. www.irrigation.org 17-18. United Kingdom RHS London Christmas Show. www.rhs.org.uk

2017 January 2017 15 to 17. United States Tropical Plant Industry Exhibition (TPIE) at the Broward County Convention Centre, Ft. Lauderdale. www.tpie.org

16 to 18. United States The Midwest Green Industry Xperience (MGIX), formerly known as CENTS will take place from January 16-18, 2017 at the Greater Columbus Convention Center. www.mgix17.com 20 to 29. Germany Grüne Woche, international green week Berlin. The world’s largest consumer and trade fair for food, agriculture and horticulture. www.gruenewoche.de 24 to 27. Germany IPM ESSEN ipm@messe-essen.de www.ipm-essen.de 27 to 30. Germany The new Floradecora show will display interesting ways to blend fresh cut flowers, pot plants and home décor accessories. Set to attract the world’s largest retail chains, Floradecora will be held in conjunction with Christmasworld in Frankfurt, one of the world’s largest consumer goods trade shows. www.christmasworld. messefrankfurt.com February 2017 8 to 10. Germany Fruit Logistica Berlin, the world’s leading trade fair for the fresh fruit and vegetable business. www.fruitlogistica.de 22 to 24. Italy Myplant&Garden 2017 International green fair at Fiera Milano Rho-Pero www.myplantgarden.com/en/ March 2017 8 to 10. Ethiopia Hortiflora Expo in Addis Ababa. www.hpp.nl 13 to 15. China The 9th Guangzhou International Flower and Bonsai Exhibition at Guangzhou’s International Sourcing Center. The exhibition covers an area of 15,000m2 and is to host over 300 exhibitors. www.pjzwexpo.com/en/

21 to 23. Sweden Nordic Flower Expo in Malmö, Sweden. www.nordicflowerexpo.com

June 2017

21 to 23. Ukraine Flower Expo Ukraine at the International Exhibition Centre (IEC) in Kiev, Ukraine. www.flowerexpo-ukraine.com

7 to 9. Kenya. The sixth edition of Iftex Kenya is set for June 7-9, Oshwal Center, Westlands, Nairobi, Kenya. www.iftex.org

22 to 24. United States World Floral Expo in Las Vegas, USA. www.hpp.nl

9 to 12. Australia Apex-Brinkman PCA Conference Future Growing, July 9-12 2017, Adelaide Convention Center, South Australia www.protectedcroppingaustralia.com

23 March to 21 May. The Netherlands Keukenhof www.keukenhof.nl April 2017 13 to 15. Iran Iran Green Trade Fair at Tehran’s Permanent Fairgrounds. www.hpp.nl May 2017 1 to 4. Iran Organised by the Iranian Society for Ornamental Plants, the National Institute of Ornamental Plants and ISHS, the International Symposium on Iran’s Wild Flowers and Native Ornamental Plants will be held in Ramsar, Iran. 9 to 10. The Netherlands GFIA Europe, the Global Forum for Innovations in Agriculture. Venue: Jaarbeurs Expo Centre, Utrecht, Netherlands. Organiser:Turret Media FZ LLC. info@gfiaeurope.com www.gfiaeurope.com 10 to 12. China Hortiflorexpo Shanghai. www.hfexpo.org/indexen.asp 10 May to 9 October. Canada Flora Niagara 2017 International Horticultural Exhibition at Niagara Falls, Canada. m.gauthier@floraniagara.com P (613) 301-4554 www.floraniagara.com

15 to 17. The Netherlands Tulip Trade Event. www.tuliptradeevent.com

23 to 27. United Kingdom Chelsea Flower Show. www.rhs.org.uk

15 to 19. Switzerland Giardina, the country’s leading home and garden show at the Messe Zürich convention centre. www.giardina.ch

25 to 27. Azerbaijan 11th Azerbaijan Agriculture Exhibition Caspian Agro at the Baku Expo Center. www.caspianagro.az

www.FloraCultureInternational.com | November/December 2016

6 to 9. Dutch Lily Days www.dutchlilydays.com

13 to 16. The Netherlands and Germany Flower Trials. Over 49 breeding companies in three regions present their latest innovations and future developments in pot and bedding plants. www.flowertrials.com 20 to 22. France Salon du Végétal at the Parc des Expositions de la Beaujoire. www.salonduvegetal.com July 2017 1 to 5. United States AIFD National Symposium in Seattle, Wash. www.aifd.org 9 to 12. Australia APEX-Brinkman Future Growing Conference www.protectedcroppingaustralia.com 15 to 18. United States Cultivate’17 in Columbus, Ohio. Registration opens March 2017. www.cultivate17.org November 2017 1-3. The Netherlands International Floriculture Trade Expo (IFTF). www.hpp.nl

2019 April 2019 29 April to 7 October. China World Horticultural Exposition in Beijing www.aiph.org

Classifieds HELP WANTED FLORASEARCH, INC. In our fourth decade of performing confidential key employee searches for the horticulture industry and allied trades worldwide. Candidate contact welcome, confidential, and always free. 1740 Lake Markham Rd., Sanford, FL 32771 USA Phone (1) 407 320 8177, Fax (1) 407 320 8083, E-mail: search@florasearch.com, Website: www.florasearch.com

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