Globalization is everywhere by KISAN

Dummen Orange

Think global, act local Up Close

Peonies in the Alaskan cold Country

May-June 2017

Colombia: Heaven made for flowers

Theme

Going global

Globalization is everywhere From one of europeâ&#x20AC;&#x2122;s leading dairy companies Roelof Joosten, CEO FrieslandCampina

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Preface

Going global with FloraCulture International

Contents Minds

Various aspects of globalization

his issue of FloraCulture International focuses on globalization. Flower production has been globalized for decades, but now we’re seeing globalization in more aspects of the industry: sales, supplies, knowledge, etc. FCI interprets developments in globalization, focussing on markets,networking and understanding their thought processes .

Why is FrieslandCampina, one of Europe’s leading

Globalization is everywhere

dairy companies, globalizing? FrieslandCampina’s

Globalization is everywhere so there is a lot to write about. We interviewed CEO Roelof Joosten of leading Dutch dairy company FrieslandCampina about his global ambitions and challenges. We saw a striking example of product globalization, noticing that peonies can be grown both in Morocco and Alaska. We analysed the Latin American floral industry and saw that despite their global activities, their dependence on the US market remains. And we found out that the Dutch can still be important in providing flowers for large floral decorations worldwide.

CEO Roelof Joosten tells us. He also give his

As usual we have three columnists, two of whom you’ve already met. John Ingwersen worries about how demographic changes can influence flower sales. Fred van Tol tells you why, in his opinion, globalization is here to stay. And Royal FloraHolland’s Edwin Wenink points out what logistic consequences globalization will cause. We hope we’ve created an issue with lots of interesting articles for you to read. Let us know what you think at: info@floraculgtureinternational.com

FloraHolland’s CEO Lucas Vos says global sourcing will strengthen the position of his growers and customers. And globalizing the floral industry isn’t just about growing and selling flowers abroad. Read about Mprise Indigo, a Dutch software supplier operating worldwide.

Up close

Peonies, subtropical and arctic plants To prolong the peony season you could use a greenhouse, but you could also go north or south. So Dick Houtenbos went to the French and Moroccan mountains to get his flowers early. Meanwhile, in Alaska growers are able to produce until late summer.

Trends

Spain’s sustainable buses

FCI Team

Columns

The world is flat Fred van Tol Team Manager Account Management Royal FloraHolland Representing international flower growers

dos and don’ts about globalization. Royal

FloraCulture International May-June 2017

Helping the environment by creating green roofs on commuter buses. Impossible? Not for Marc Grañén and his company PhytoKinetic. Whenever you are in Barcelona, take a look.

Do demographics matter? John Ingwerson CEO Jungle Jack’s Plumerias

A reliable supply chain Edwin Wenink Logistic expert Royal FloraHolland

Meetings

Markets

Analysing Latin America For the floral industry, Latin America is extremely

International exhibitions Of the 138 exhibitions Messe Frankfurt organized

important. Colombia and Ecuador have become major producers of cut flowers. The USA is their major market but what are the challenges and problems for Latin America?

A global player

in 2016, 87 were held outside Germany. Why? What

The floral industry in Latin America is strong, but it is threatened . What will happen politically? How will Donald Trump’s actions affect the US exports? How will Ecuador and Colombia cope with African competition? An overview.

does that signify ? Why should you participate in international exhibitions? How do you do that? Find the answers on page 8.

Feature

Country

Heaven made for growing flowers

Dümmen Orange: act local Dümmen Orange is one of the industry’s leading, international breeders. Managing Director Harry Kloppenburg explains why his company has globalized, what challenges he encounters and how he succeeds in acting local whilst thinking global.

Continent

Colombia was heaven made for growing flowers. Is the country heaven on earth for the industry? We went there to find out.

City

Feature

For the love of flowers

Looking ahead

Despite the fact that not all Colombians have enough money to buy flowers regularly, there is a lot of love for flowers in Bogota.

Futurologist Jacintha Scheerder tells us about great societal changes and long-term global opportunities for the industry.

Case

Sourcing worldwide for a fragile demand A top florist in a global city receives a commission for a gigantic wedding. Money is no object, but time is because it must be done this weekend. How will he source his flowers?

FloraCulture International May-June 2017

Column Flowering the world

The world is flat

n his 2006 bestseller The World is Flat, US journalist Thomas Friedman described how modern technology changed (and globalized) the world. At the time of its publication, a technician in India could repair a computer located in Europe. Within a year Friedman had to revise his book because changes were occurring so rapidly. Since that time, the number of internet applications has multiplied further enabling globalization.

Some examples: Recently a Dutch colleague purchased a new car and put a photo of it on his familyâ&#x20AC;&#x2122;s shared app. The first one to react, within seconds, was his son who was working at his US-based office. Hereâ&#x20AC;&#x2122;s another example: my children chose not to buy new cell phone covers in a local shop. Instead they ordered from AliExpress in China and within two weeks their order was waiting on our doorstep. In addition, the first ever direct Chinese freight train transporting more than a million pounds of goods arrived in the UK at the beginning of the year. Digitally and logistically the world is connected now more than ever. I also experience the benefits of globalization in my daily business. Instead of traveling to Israel or Colombia, I Skype or video conference with customers and colleagues on the other side of the world. Complex information can be easily shared and discussed on a video conference. While visiting the Netherlands, one of our Israeli growers checked in with his nursery back home on his mobile phone. Instantly, he could give feedback to his manager.

Globalization is no longer the exclusive domain of multi-national corporations. Modern technology now makes this possible for anyone. IT and logistic systems enable you to interact worldwide, offering services and sharing knowledge on a broader level. The world has truly become flat. At the same time, you still need to know how to do business locally. Knowing cultural behaviours, local customs and traditions is a basic business necessity. However, video conferences and state of the art logistics do not replace personal contact. Contrary to what you might think, the importance of personal contact is increasing. You must find a good balance between video conferencing and face-to-face contact. Therefore, trade fairs all over the world have become important meeting places where global partners can interact in person. But in the end, it is still the relationship itself that matters. Fred van Tol Team Manager Account Management Royal FloraHolland Representing international flower growers

Want to know more? www.royalfloraholland.com/globalization

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Getting together

Meeting the eye of your customers 8

MEETINGSâ&#x20AC;&#x192;

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“

Exhibitions almost always are a part of globalizing.” Maaike Koop GREENN

International Exhibitions Of the 138 exhibitions Messe Frankfurt (an 800-year old company) organized in 2016, 87 were held outside of Germany.

What are the consequences of globalization on floral industry exhibitions? We asked Maaike Koop. Her company, GREENN, helps horticultural exhibitors participating in exhibitions. “We help potential participants at exhibitions in countries like Turkey, Russia and Spain from constructing their booths to translating on the spot. An exhibition is a complex thing so we give our clients the help they need. For them exhibitions are important, but they aren’t their core business. We take away any possible difficulty so they can do their job and simultaneously keep their business running.” “Acting global is more and more a reality for many floral companies. Exhibitions almost always are a part of globalizing, though a company could also take part in a local fair and see foreign customers. But more and more producers see the chain doesn’t end with an export company, but at a flower shop or a supermarket. Growers don’t want to bypass their export company, they just want to be visible. That’s why they participate in exhibitions in their major (or new) markets abroad. On the other hand, local wholesalers, florists or supermarkets want to meet their foreign suppliers in person.” “Exhibition organizers are globalizing, too. That’s OK, provided your relationship with them is good. We have a mutual interest, organizing attractive exhibitions. For example, people I work with in Russia could provide me with contacts in China which benefits my clients.”

The Frankfurt exhibitions are also as successful as they are international (53% of the visitors and 76% of the exhibitors are from abroad). But this is no guarantee for future success. Trade fairs become irrelevant when internal and external factors are not continuously reconciled. Therefore, Messe Frankfurt invests in products (exhibition themes) and markets. Since the late 1980’s they span the globe with various brands. Often a Frankfurt ‘flagship event’ will be followed by a similar exhibition elsewhere. Messe Frankfurt, owned by the city of Frankfurt am Main (60%) and the state of Hesse (40%), has subsidiaries and branch offices in Europe, the US, Asia, Africa and Latin America. The Asian subsidiaries are united under Messe Frankfurt Asia Holding Ltd., headquartered in Hong Kong. A closely knit network of 55 international sales partners, covering 175 nations and 30 subsidiaries throughout the world, forms the basis of Messe Frankfurt’s global reach. Visitors and exhibitors benefit from this global orientation for Messe Frankfurt truly attracts an international clientele. Take, for instance, Floradecora, the floral exhibition that had its premiere last January. This fair benefitted from Christmasworld, the great fair for seasonal decorations, which was held on the same dates. Christmasworld draws a highly interesting international audience, so Floradecora did too. That’s how globalization can unite an international audience with an exhibition, wherever it’s held. See more information www.messefrankfurt.com

“I don’t think globalization will lead to more floral exhibitions. But there is a need to participate and by professionalizing fair organizations, and with our help, participating has become easier for growers. Participating in an international exhibition is obviously an investment, but from our experience it helps increase business significantly. As long as there are attractive international floral fairs there will be floral participants eager to attend.” FloraCulture International May-June 2017

MEETINGS

Column Certifiable in California

Do demographics matter?

reetings once again from California, that wonderful, whacky place that exists somewhere in between Trump’s wall and Sanctuary cities… (If you don’t get the joke I’m not going to apologize, it’s not that funny anyway). The way I figure, California already has enough challenges without worrying about politics at the national level. So I won’t…I’ll worry about something else entirely, something which may or may not change my business, or, how I sell, what I sell, and to whom I sell.

Before proceeding further, it’s important to note that much of the disparity can be attributed to the relative economic status of the various populations, i.e., the better educated white and Asian groups have more purchasing power. But that’s not the whole answer, or even an entirely accurate one. It overlooks the fact that in California, Texas, and elsewhere, there is a thriving (and growing) Hispanic middle class. And yet, my percentage of Hispanic customers has not varied significantly over time.

What am I talking about? Simply put, it’s the relationship between demographic changes and purchasing patterns, in this case (obviously) with respect to horticulture. Essentially, the whole discussion revolves around the impact that the increasing percentage of the Latino/Hispanic population will have on horticulture/floriculture. In the case of California, this refers primarily to Hispanics of Mexican descent. However, on a broader scale, my personal experience selling in Europe and elsewhere would lead me to create a broader grouping, i.e., the broader category of Latin ethnicity, e.g. Italian, Spanish, etc...

The initial conclusion is ominous, i.e., the most rapidly growing segment of the population has the lowest propensity to purchase my product. More concerning, anecdotal observation during my travels in places like Mexico, Spain, South Texas, and Italy indicate that these cultures do not place a high value on horticultural items, beyond macro-landscaping.

I’ll start with some numbers. These are not scientific, rather based on observation of my customers over the past 10 years. Let’s start with the fact that the population of California can currently be broken down as approximately 40% Hispanic, around 40% white (Caucasian), 7% black, with the bulk of the remainder being Asian. This compares to my retail customer base (again, based off daily interaction with my customers) that I would characterize as 60% white (Caucasian), 30% Asian, and less than 10% Hispanic/black/other.

Yes, I realize I’m glossing over some significant issues, and at a very high level, with questionable scientific process involved. But that doesn’t mean the general conclusions are invalid, and given the current demographic trends in the US, it’s something I (and we, as an industry) have to be concerned about. Given all that, Trump and walls are the least of my worries…

About the writer… John Ingwersen graduated with a degree in marketing from Georgetown University in 1990, and founded Jungle Jack’s, Inc. in 1995.

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Feature

MEETINGSâ&#x20AC;&#x192;

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Dümmen Orange: Acting local Global breeder Dümmen Orange is the world’s largest grower of cuttings, producing over 1.5 billion cuttings per year (4,000 varieties) at seventeen locations around the world. Cuttings are sold in seventy countries daily to 11,000 customers. Managing Director Harry Kloppenburg calls it “a true logistical challenge.” FCI spoke with him about the practicalities of globalization.

Being a large company we can access top-notch professionals. “Consolidation is a worldwide economic trend. Companies grow and merge,driven by cost efficiency and the need for a wide, state-of-the-art assortment of product. You need scale to service the world market in retail, production and also in breeding and propagation. Being a large company, Dümmen Orange is a leader in various flowers and plants. We bring together professionals in IT, sales, marketing and R&D. It enables us to acquire lots of knowledge for the breeding and propagating of many products. Every crop we sell has a product team, using worldwide input as a basis for their product plans. Since we are present in various countries we can adapt rapidly to worldwide changes .” Globalization is also about guts and fun. “Globalization isn’t just an economic, strategic activity. You also need guts. India, for instance, is not an easy market. Yet we managed to make our operations there commercially successful. Personally, I believe in markets rather than greenhouses. You need greenhouses to breed and propagate, but sales and royalties are our bread and butter. Success requires passion. Only if you like the constant fight to succeed in countries like China, India or Japan will you amount to anything . Of course cultural differences are barriers. But

for me barriers are an additional motivation to succeed.” Dümmen Orange thinks global and acts local. “Worldwide, Dümmen Orange has general targets, standards and values to which all companies we own must adapt. Chinese, Chileans, Germans and Dutchmen work together in product groups, departments and countries . Any company we acquire goes through an integration process led by a board member to make it fit into Dümmen Orange. So we think global, but act local. Our Italian location, for instance, has its own rooting facility based on the needs of local customers. It also has local salesmen so customers can do business in their own language. So our German customers buy from a German company and our Chinese customers buy from a Chinese company.”

“

For me borders are an additional motivation to succeed.” Harry Kloppenburg managing director Dümmen Orange

In a global company you need to have an open culture. “Of course being a global company necessitates being well-organized. But it takes more than that. Our culture is informal; there is a lot of cross-cultural communication. It is normal to call or visit a colleague if you think he or she can solve your problem. My door is always open, too, to help customers and colleagues solve issues and create opportunities. If one of our Kenyan sales representatives has a problem and I can help him, it’s perfectly normal that he would call me.” FloraCulture International May-June 2017

MEETINGS

Feature

Massive social change and long-term global opportunities Jacintha Scheerder is a futurologist who works for Let it Grow, Royal FloraHolland’s initiative aimed at letting people discover the value of plants and flowers by helping promising green start-ups. Most of these start-ups have created new floral internet applications for urban societies. Jacintha explains some future signals of change and the green possibilities they bring. FUTUROLOGIST, NOT TREND WATCHER “Trend watchers look five to ten years ahead. I scientifically focus on what could happen in 35 years. Not predicting but scouting signals of change with a possible influence on major long-term challenges. Six of them, climate change, scarcity (of water, energy and soil), longer life,

MEETINGS

global power shifts, demographic change and new connectivity will lead to worldwide changes and provide opportunities to the green sector. For instance, the Chinese want to lead the world in supplying solar energy globally. But one of our start-ups has already developed a plant that emits energy when you touch it!”

GROWING VEGETABLES IN SEOUL “In Seoul they’ve built an Urban Skyfarm to commercially grow fruits and vegetables in a vertical design. It can feed an entire city. Sales are done on the ground floor and no soil is needed so the construction can be relatively light. But nowadays you can grow cresses in small boxes with its own lighting and automatic watering system. Cresses are very tasteful and nutritious and a commercial success for one of our start-ups.”

LOSS OF FAITH “People are becoming increasingly more conscious of what they consume. They want to take matters into their own hands and know what’s in their food and flowers. So by developing a FloraCulture International May-June 2017

tile with a hole in it in which you can plant a weed, as if it were a ‘real’ plant, one start-up created a new market: greening up your city your own way, with stuff we already have.”

NEW CONNECTIVITY “Many start-ups developed new internet applications with green links, for example, sensors which tell you when and how to take care for your house or garden plants (or your park or your crop). Tailor-made packages of house and garden plants with care and handling apps. And the best is yet to come. In working for Let it Grow I see more chances to be green in a new, challenging globalizing world.”

“

Trend watchers look five to ten years ahead. I scientifically focus on what could happen in 35 years.” Jacintha Scheerder futurologist, Let it Grow

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Continent Country City

South America, a global player 16

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South America has many good producers of flowers in well led companies with good production methods and good logistic chains.

Where to start an analysis of the South American floral industry? Perhaps by concluding that Latin Americans love flowers. This is likely the single most important factor in starting and maintaining a new industry. But there’s more. POLITICS Compared to past decades, much has improved in South America politically. Military juntas disappeared and the majority of current governments were chosen by democratic elections. But within societies differences of opinion run deep. So if an opposition party wins an election, change will likely follow, in particular economically. Corruption is still present in Latin America. People everywhere have read about the Petrobras scandal in Brazil and Transparency International’s corruption list. The majority of South American countries don’t fare well on the list.

ECONOMICS South American countries have major economic problems. Growth, if any, is

under par. Producers and consumers share a lack of confidence about the future. In addition, sales figures from the floral industry have not been impressive. Due to economic hardship, many people are too poor to buy flowers on a regular basis which prevents local markets from thriving. So in high producing countries like Colombia and Ecuador, the flower industry is export-oriented. But in 2015 and 2016 export rates declined.

A STRONG INDUSTRY Still, the Latin American floral industry is strong. Successful companies continue to grow by taking over their competition or by improving cultivation and logistic methods. With a decades-long tradition in flowers and good climate conditions, Ecuador and Colombia’s many nurseries are situated at an altitude where you find a relatively mild, stable climate and optimal light conditions. Many nurseries started some forty years ago when landowners were looking for alternatives to cattlebreeding. They began selling their flowers in Miami, Florida (USA). Nowadays, the US is still the most important market for South American growers. Some 75 percent of Colombian flowers are sold in the States as are 50 percent of Ecuadorian flowers. So the relatively strong US dollar has greatly

influenced the profits of production companies. Colombians benefited most with their peso-based economy as compared to the Ecuadorians with their dollar-based economy. In Europe, Russia was a major market until the Russian economy tanked. This hit Ecuador hard. Their high-priced, large bud roses became less affordable for the Russians so growers had to diversify their assortment. Once again Russian demand escalated but there is no indication that prices will rise to previous levels. South America has many good flower producers in well-managed companies with sound production methods and logistic chains. Sea transport, which is growing, opens up new opportunities in European and Asian markets. The better nurseries continue to expand. But they too are in constant competition with their East African counterparts who have improved their product quality and transport methods and still benefit from cheap labour.

FloraCulture International May-June 2017

MARKETS

Continent Country City

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Colombia: Heaven made

Colombia is heaven made for year-

PEACE AND PROBLEMS

round flower growing. It possesses

The recent peace agreement between the Colombian government and FARC rebels was welcomed all over the world, but in Colombia itself there are still doubts. The new situation is attracting foreign investments but locally people wonder how FARC will act under the new agreement. Former President Uribe was a staunch opponent of drug production and trade, the major source of FARC’s funds. But since the start of the Santos administration seven years ago, drug production has tripled. Next year there will be a new presidential election and until then there will be uncertainty. Drug production, by the way, doesn’t affect the floral industry as flowers are grown in other parts of the country.

a mild equatorial climate, long days, fertile soil, abundant water, modest wages and favourable trade conditions with important markets (US, EU). So within decades Colombia has become, and still is, the world’s second largest flower exporter. Yet the Colombian floral industry is now faced with uncertain times. Why?

MARKETS FIGURES Recent Colombian export figures were unremarkable. In 2016, exports stabilized (in US dollars) but it took a 5.1 percent increase in kilos to reach this level of stability. Prices dropped due to currency issues (UK) and economic changes (Russia). Meanwhile, Colombia built up markets in EU countries like Poland and the Czech Republic, although these sales are relatively small compared to the largest market by far, the USA. Over ¾ of Colombian flowers are sold to American consumers. Roses, carnations, alstroemeria, hydrangea and chrysanthemum are the most important Colombian flowers. Approximately 7000 hectares are utilized for export flower production. Many of the nurseries are larger than 50 hectares. Most nurseries started as family-owned companies and still are today. They are well-run, use good equipment and good production and logistic methods and are aware of the market’s needs, such as sustainability.

Worldwide goods streams tend to go between south and north instead of east and west. This is readily apparent from the fact that the USA is Colombia’s largest export market. Many Colombian producers have Miami logistics and sales facilities. They have also developed new markets in Europe and Asia. In these markets they must compete with African producers who have lower labour costs. The Colombians try to save costs by using sea transport for EU and Asian exports which appears to be suitable for crops like chrysanthemums, carnations and alstroemeria, but less so for roses.

SWOT Recently Royal FloraHolland made a SWOT (strengths, weaknesses, opportunities and threats) analysis of Colombia and its floral industry which provides strong indicators of its future prospects. Read more: www.floracultureinternational.com

FloraCulture International May-June 2017

MARKETS

Continent Country City

Colombia, the worldâ&#x20AC;&#x2122;s second largest flower exporter In 1970 Colombia hardly played any role in world flower exports. Since then developments have been fast moving. Nowadays Columbia is the second largest flower exporter in the world. Although things could be easier, the Colombians have lots of chances on the world flower market, chances which they are willing to take, for example by using sea transport in order to save cost. To learn more about our services go to www.royalfloraholland.com/insights or contact us at marketinformatie@royalfloraholland.com

Export Colombia 1970-2015 in million tons and USD

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Exportmarkets Colombia 2015

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in percentages

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USA 77% UK 4% Japan 4% Canada 3% Russia 3% the Netherlands 2% Spain 2% Other 5% 1 TEU (Twenty Feet Equivalent Units) = a half 40-ft container. One TEU with flowers contains approx. 5 tons. 1600 2008 > 2016

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Production value Colombia x €1 mln. 1400

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‘12

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PHOTO: MEDELLIN.TRAVEL

Continent Country City

For the love of flowers Colombians love flowers. Of course they export 90 percent of their production, but there is a domestic market in cities like Bogota and Medellin.

MARKETSâ&#x20AC;&#x192;

FloraCulture International May-June 2017

PHOTO: MEDELLIN.TRAVEL

Is there a local market in floral areas like Bogota and Medellin? Yes, there is and there is also a culture of flowers. Take for instance the Medellin Feria de los flores, a floral festival held in August. Yes, Columbians do love flowers.

As pointed out elsewhere in this issue of FCI, flowers are sold mainly in the Northern hemisphere (Europe and North America). Consumers in these regions have the means to purchase flowers. In a city like Bogota differences in income levels are huge. Many people simply do not have the money to buy flowers on a regular basis. This becomes abundantly clear when you compare the Colombian per capita income ($7447) to the Dutch per capita income ($50,925). Nevertheless, in Bogota you will find that upper, middle and lower classes each have their own markets. But one thing is for certain: in all income groups you will find people who love flowers.

BUYING ON THE STREET Low income groups generally buy their flowers at the Plaza Supermarket and the street markets, not on a weekly basis but for special occasions. These flowers will not typically be top quality and their cold chain could be improved. But this way large groups of customers are able to purchase flowers, which almost always are Colombian grown.

BUYING IN THE SUPERMARKET Bogota also has many middle class consumers, people who have the money to buy a better product more regularly. For this target group the supermarket is important. Colombian producers know how to deal with supermarket organizations worldwide, so they know how to deal with domestic supermarkets, too. Doing business with supermarkets means working with relatively good supply chains on aspects like cooling, care and handling.

BUYING IN FLOWER SHOPS A major city like Bogota naturally has flower shops in all price ranges including high-end flower shops where the well-to-do come to decorate their house or their social gathering. Many of these shops offer their services online. Looking at some of these websites you get the impression that the flowers being used are of good quality and the level of floristry is sufficient.

FloraCulture International May-June 2017

Flower sales in Colombia • Domestic consumption is only 5% of Colombia’s total production. Considering the fact that Colombian exports are about $1.4 billion, the local market has an estimated turnover of approximately $70 million. • The most important holidays for purchasing flowers are Christmas, Valentine’s Day and Mother’s Day. • The most popular flowers are roses, chrysanthemums, alstroemeria, lilies, summer flowers such as hydrangeas and tropicals such as heliconias.

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Cover story

Engaging local consumers FrieslandCampina, one of Holland’s largest dairy producers, has been globalizing its activities over the past few decades. Is this because the Dutch don’t produce enough milk? No, it isn’t. The Dutch dairy industry is an export industry. The question is why globalize and how? FrieslandCampina’s CEO Roelof Joosten tells us his story. 26

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FloraCulture International May-June 2017

“

Making money is one thing but we should always do this in harmony with the environment/ nature and society.” Roelof Joosten CEO FrieslandCampina

“FrieslandCampina produces dairy products from the milk of member-farmers – united in a cooperative - who own the company. Since the Dutch produce more milk than they consume, we are export-dependant. So we seek countries that have higher demand for dairy products than they are able to source locally. These countries are to be found in a vast area between West Africa and South East Asia/China. Why? Because in those countries we can add value to our milk on the basis of consumer needs.”

WHAT DO YOUR GLOBAL ACTIVITIES ACCOMPLISH? “First, it is vital to focus on what you’re good at and where you can make a difference in product offerings. So we focus on infant formula, dairybased beverages and branded cheese. Making a difference with these products, you engage with local consumers. Of course you have to adapt to local markets, but it all starts with the milk chain, the foundation from which you produce better products than your competitors. Part of our job is convincing local entrepreneurs and local consumers of the power of the Dutch dairy industry. FrieslandCampina and other Dutch dairy producers, in contrast with many of our competitors, own the complete supply chain (from grass to glass) with an excellent and unmatched quality system built and nurtured over many years. It’s because of this

Roelof Joosten Since 2015, Roelof Joosten has been CEO of FrieslandCampina, one of Europe’s largest dairy companies. Prior to taking the helm at FrieslandCampina, he worked in both the food and dairy industries. In 2004 he began his tenure at FrieslandCampina. Joosten is also chairman of the Nederlandse Zuivel Organisatie (Dutch Dairy Organization) in which the entire Dutch dairy industry takes part.

heritage that you successfully export across borders. And when you adapt your value proposition to local markets, it helps you become successful. Innovation is another source of success. You need it for your long-term strategy to stay ahead of the game. By the same token, new technology can be successfully implemented into our Dutch business, as well. Our global presence gives us the scale and leveraging capability to implement new technologies and products. It makes us a global leader in dairy products, willing and able to adapt to new trends.”

WHAT ARE THE CHALLENGES OF GLOBALIZING? “Probably the major challenge is deciding what not to do. As I said before, you need to focus on what you’re good at. The major trap is that you start to work on many exciting things which are eventually deemed too complex and, therefore, too expensive and unprofitable. You also need to have a good rapport with local governments. They need our capabilities and skills to produce milk locally so that their country becomes more self-sufficient after allowing us to export dairy products to their country. There has to be a balance in what we can jointly do.”

WHAT SHOULD YOUR GLOBAL ACTIVITIES ACHIEVE? “The simplest answer is the best: a positive earnings model. Value generation allows for a larger premium payout to our farmers in addition to their earnings for milk. Our cost price is based on the average price of milk in Northwestern Europe. Additionally, it is important to provide our members a profitable long-term future which is essential for the continuity of FrieslandCampina and, hence, the continuity of the farms of our member-farmers. So making money is one thing but we should always do this in harmony with the environment/nature and society. The consumer endorses our way of operation if we pay respect to these three elements in total, that will ensure the continued success of our business.”

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Cover story

Global sourcing: A Dutch response Given its importance in the world flower trade, Holland has to source globally to keep its position. “It is in the interest of our membergrowers that the marketplace Royal FloraHolland plays a key role in global sourcing,” says CEO Lucas Vos. “Globalization has already occurred in other markets. Worldwide production is the standard and new export destinations are emerging (Turkey, China). Besides the weather, currency rates are a major influence on floral sales. Exporting to European countries is only risky when, like Kenya, your costs are in dollars. Holland has to globalize so that we can offer a wide assortment (the Dutch USP) and minimize currency risks. Our major

MEETINGS

customers should do so and Royal FloraHolland should do so, as well. In the interest of our growers, we want to remain a strong marketplace for flowers and plants.” “Global sourcing means building relationships. You can do so by sharing knowledge with foreign partners. The Turks, for instance, can benefit from Dutch knowledge. We bring them knowledge that helps them achieve their export goals in neighboring countries. In return, they open their market to Dutch flowers and plants. That’s how it should work to make everybody happy.” “There’s more than one global approach. Your approach might differ per country. In China we developed our market by helping Dutch clients with custom facilities. Dutch export firms bring flowers to China. In China, Royal FloraHolland acts as the importer and takes care of delivery to Chinese customers. That way we build up new FloraCulture International May-June 2017

markets and gain new knowledge about local customs, banks, governments, et cetera, creating new commercial opportunities for our growers.” “Globalization has its uncertainties. For Ecuador and Colombia, Donald Trump is an uncertainty. If the USA creates import barriers for Latin American flowers, it could benefit Dutch flower growers who then would have a level playing field in regards to trade. But Ecuador and Colombia would likely try to strengthen their position in European markets. In my opinion, Royal FloraHolland should help them in their efforts. That’s not easy to explain to our current Dutch and international members, but I’m sure it is in their interest that Royal FloraHolland attracts global streams and markets to its marketplace. This all is inherent in the Dutch position in the world market. We have to play our role in a global world.”

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Cover story

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Helping growers to produce sustainably with less waste.” Joop de Jong CEO MPrise Indigo

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FloraCulture International May-June 2017

Practical globalization

Horticultural suppliers of every stripe are feeling the urge to globalize. Take for instance MPrise Indigo, a Dutch developer of software systems for plant nurseries that uses Microsoft Navision standards. MPrise Indigo’s CEO Joop de Jong tells their story. THE NEED FOR SCALE “Our company has seven developers who are constantly working. There must be a return of investment for the money you spend to employ them. The product we deliver is only suitable for larger nurseries. This has forced us to expand outside the Netherlands and globalize. We operate in Belgium, Poland, Norway, the UK, Denmark, Canada, the US, Australia and New Zealand, realizing 15% of our turnover abroad. Our Dutch heritage is an advantage; Holland is known for its horticultural knowledge.”

THE NEED FOR PARTNERS “We recently strengthened our team for Dutch and global activities. We also invested in an international partner network. We find those partners within the Microsoft network and ask them if they are interested in selling and implementing our software programmes. Although not many partners in the Microsoft network are in horticulture we did find some. But we have to teach them to act in accordance with our standards since nursery software requires special know-how. You need to fully understand the processes. You also have to recognize that MPrise Indigo develops software with its clients for a long-term approach. It takes three or four years before a partner completely aligns with our philosophy. On the other hand, our partners help us improve our software. Together with a partner we build software with which you can track individual plants

at a nursery to give them what they specifically need. This software is the answer to questions asked by our foreign clients but it can be suitable for Europe too, thus helping growers to produce more sustainably with less waste.”

THE NEED FOR GOOD PEOPLE “Globalizing also means you have to send your people to faraway countries. Clients expect our know-how and high standard of performance, so they ask for senior employees. Not everyone is a senior and most seniors have families with children who don’t want their father or mother to be abroad continuously. Fortunately there’s video conferencing and Skyping to help us solve that problem.”

THE EXCHANGE OF IDEAS “The attractive part of doing business abroad is the exchange of ideas. Take for instance the differences between Dutch and American plant growers. Due to the auctioning system, most Dutch growers have relatively simple sales administration and a strong focus on specialization and cost. American growers have no auction. They grow a wide assortment to be attractive to retailers so they need good administrative connections to their retail partners. We connect nurseries to retailers’ sales via scan systems since the retailer will only pay for products that have passed his cash-desk. In combining these types of knowledge we improve our product on a global scale.”

FloraCulture International May-June 2017

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Up close

Peonies any time you want Most flowers are sold in mild European and Northern American climate zones. But for various reasons flower production has globalized. This goes for year-round crops like roses and carnations, but also for seasonal flowers. Stretching the peony season has made these flowers available the world over. They can be found in Morocco and Alaska.

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FloraCulture International May-June 2017

Moroccan altitude

Alaskan cold

Dick Houtenbos (Atlas Peonies) has peony nurseries in Southern France, Morocco and Holland (mostly for growing young plants).

Ron Illingworth of North Pole Peonies is President of The Alaska Peony Growers Association, a group of growers trying to develop peony growing in Alaska.

“In Morocco we start harvesting in early April. Gradually we start at our French location continuing into the third week of June. Both in France and in Morocco we grow at an altitude in the mountains where the climate is ideal for peonies (especially lactiflora). Peonies flourish when subjected to alternation of hot and cold. The Dutch climate has relatively little fluctuation, but given Morocco’s altitude, day and night time temperatures can differ considerably. I would say many of my peonies flower better than those grown in greenhouses up north. On top of that, we can produce them at a favorable price. The major problem of growing in Morocco is the distance to market. Due to the free trade agreement between the US and Morocco, the American market is our target market. Since there are certain issues to be resolved, all of our flowers are now marketed by Royal FloraHolland Aalsmeer from which they are transported by air. When volumes increase we could start transporting by truck. However, it takes a truck 48 hours to get to Holland. In Morocco you must pay close attention to the details. In Northern Europe the direction in which you plant makes no difference. But in Morocco (where temperatures can be very high) the planting direction can make a lot of difference. But all in all growing Peonies in Morocco isn’t much more complicated than doing so in Holland or Germany.”

“Growing peonies here started when some people visited Georgeson Botanical Gardens and commented on the peonies which were blooming in July. We saw the advantages of lengthening the season. Alaska has worldwide transportation hubs within a half hour driving time of most growers. So far-away markets are within reach by Alaska Air, FedEx and UPS. Growing peonies up north can have its problems. The extreme cold can kill roots unless there’s enough snow cover to insulate them. We do not know much about growing in Arctic temperatures, about how to protect the plant, about how to nourish them. And since governmental help is scarce, we have to figure these things out ourselves through farm research and the sharing of information. We’ve only just started as peony growers, so we primarily produce for the domestic market. At present there are about 75 peony growers in Alaska. Together they produce over 100,000 stems. In a couple of years we will scale up to 1million stems. Our farms are still young and the plants are still maturing but there are solid plans to expand and the market opportunity is clearly there. I co-operate with colleagues in the Alaska Peony Growers Association and in doing so we boost quantity and ensure quality which makes us more desirable to our clients. If a member has a problem, there are numerous colleagues that can help. Our flowers’ quality is our top priority. We want our customers to have the best flowers possible.”

FloraCulture International May-June 2017

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Introducers of

brilliant plants

e search the world looking for brilliant and colourful environmentally friendly plants. We then work with our Licensed Growers to make them readily available into the global markets.

Once we have selected a plant, they are then extensively tested to prove their performance. We have trials sites located in all our key markets around the world and it is only after a potential Tesselaar plant has been through these trials, that it is considered for commercial introduction. A network of growers â&#x20AC;&#x201C; people who share our values of professionalism and quality â&#x20AC;&#x201C; then grow-on the plant ready to be delivered to their local markets. Innovative promotion and marketing support plays a fundamental role in bringing these new and distinctively different plants onto the market place.

Underpinning all this is a personal philosophy, based on strong ethical practices and professionalism. Itâ&#x20AC;&#x2122;s a straightforward approach driven by a simple aim - finding exceptional plants that are colourful, best in class and so easy to grow, and then bringing them to market.

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See us at:

OFA - Ohio Plantarium - Holland Essen - Germany

Trends

Spain’s sustainable buses A garden on a bus. To see it is to believe it. But in Spain (Palma de Mallorca, Girona, Barcelona and soon Madrid) you can see this. However there’s more to it than meets the eye. Rooftop gardens on buses. It’s the creation of Marc Grañén, a Spanish landscape artist who is the director of PhytoKinetic. His aim is to cover moving and nonmoving rooftops with plants. Covering nonmoving rooftops

“

is a worldwide trend, brightening up cities and reducing pollution. Covering moving rooftops is a different story, but PhytoKinetic has done its homework. The installation on buses has been heavily tested in order to secure governmental approval. Even when a bus is traveling 75 miles per hour (120 kilometers), there are no obstacles. The custom roofs are created and handmade on-site with local plants and materials. The soil of the garden is seven centimeters deep and is watered by the cooling system of the bus. The roof and plants not only diminish the CO2 level in the atmosphere, but also absorb sound and heat. They

Local plants can be sourced for each specific location.” PhytoKinetic Marc Grañén

absorb 4.5°C, so temperatures inside the buses are quite comfortable despite the Spanish summer sun. A fully functional roof garden bus costs about 2500 euros. PhytoKinetic is currently talking to bus companies in the UK, Germany and Argentina. Finding suitable plants for particular weather conditions is no problem as local plants would be sourced for each specific location.

Want to know more? www.phytokinetic.net

FloraCulture International May-June 2017

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Case

Worldwide sourcing in a time of fragile demand In major cities on every continent you find top florists. They are alike because they work with flowers and plants. But they differ because they use their own individual styles which are often influenced by their locale. “Many top florists are constrained by location and availability,” says Jan de Boer from Barendsen Aalsmeer, a top-level floral supplier. “But many rich expats live in global cities nowadays. They want what’s not available locally, flowers that need to be procured elsewhere. This is often a fleeting demand. The following month the same expat may have moved elsewhere. We also see top florists having a relationship with

MARKETS

multinational organizations such as the UN or large banks or the Formula 1 organization, getting requests for large floral decorations with very specific requirements.”

A FRAGILE DEMAND “These designs require an exceptional level of sourcing,” De Boer continues. “It’s a fragile demand, sometimes influenced by the value of the Russian rouble. Normally these florists source FloraCulture International May-June 2017

flowers locally when possible. But for these custom orders many of them source from a Dutch wholesaler. Why? Because the Dutch offer a complete assortment in large quantities of any desired quality on a daily basis. We have clients that normally buy roses from Ecuador and summer flowers from Israel. But when they plan a millionaire’s wedding they contact us. This line of work is full of surprises. A Chinese wedding requires different flowers than a Russian, Indian or Italian wedding. The only certainty is that next week’s demand will be totally different. It’s even uncertain whether you will have a similar demand next week, because there are weeks without weddings, funerals and seminar

arrangements. And rich brides and grooms compare prices too, so your offer might be rejected because they think you’re too expensive. Or, in the end, a bride and groom decide not to marry. Therefore, I have excellent contacts with top growers worldwide who know that this week’s demand may be irrelevant next week.”

USP Roughly 5 to 10% of the Barendsen turnover involves these projects. De Boer: “Being able to help clients this way is our USP (unique selling proposition). We know where to find specific flowers on short notice, even in large quantities. We know how to avoid mistakes. We know that no

“

We know that no flowers equals no party.” Jan de Boer Barendsen Aalsmeer

flowers equals no party. When I send 20,000 Hydrangeas to Jakarta, I must be certain that the varieties I send will last until after the party. Another uncertainty is that you have to ship flowers to various faraway locations. When there is a millionaire’s wedding party on a cruise ship in the Mediterranean, you’re told the location of the delivery as late as possible for

security concerns. By noon tomorrow they might need 600 stems of green orchids. Fulfilling this order requires adept coordination with growers and logistics suppliers. The key here is a wide assortment, which is a Dutch USP. About ten Dutch companies are specialized in these special jobs. And believe me, it’s a very special endeavor.”

FloraCulture International May-June 2017

MARKETS

Visit us at the

FlowerTrials 13 to 16 June 2017

Presentation of the third

Klaas Schoone Memorial Award On 14 June 2017 the third Klaas Schoone Memorial Award will be presented to a company or organization which is or has been of great contribution to the orchid sector. The ceremony is scheduled in conjunction with a mini seminar. Top notch and not to be missed! Be sure to mark it in your calendar! For more information please visit www.floricultura.com or www.ksmaward.com

www.floricultura.com

Column Sharing opinions

The benefits of a reliable supply chain

“I

n FCI’s last issue, Frits Jonk, Manager of Royal FloraHolland’s Test & Quality Centre, said customer satisfaction is the sole goal of any quality policy. Frits is right. Customer satisfaction is also the sole goal of any reliable supply chain policy. For growers, logistics used to be about ‘transporting products from A to B’. Nowadays, it’s about organizing a reliable, conditioned supply chain (from the moment a grower picks a flower until its delivery at the market place). This makes logistics much more comprehensive and challenging. The question becomes how growers can add value to their products by making the supply chain more reliable. A common perception is that logistics is about costs; but a well-organized supply chain brings the right quality product at the right temperature at the right time to the right customer. So quality and sustainability are relevant issues in our world. By preventing waste you work more sustainably; you need fewer flowers and less transport to obtain the same results. This will reduce your carbon footprint. By doing so, growers add value to the supply chain. The rise of megacities with a huge food and flower demand is a key development in a globalized world. IT (information technology) can help us fulfil these needs sustainably by connecting supply and demand, thus optimizing the supply chain. If market knowledge enables you to choose alternatives for air and road transport (sea, rail),

your carbon footprint can reduce up to 85% and your logistics cost could decrease up to 50% while maintaining the same product quality. The challenge is to sustainably connect individual producers with individual clients. Long-term relationships enable long-lasting modality shifts. Next to globalization there is localization. Megacities tend to be self-sufficient. Innovative technologies (for instance, with special light) enable highly efficient production rates for nurseries close to those cities. Currently we cannot completely foresee the logistics consequences of these developments. But I do know that customers want their expectations met. If you eat at McDonald’s, you know what you’ll get. But if you buy flowers, the vase life duration is uncertain. Consumers want flowers to last for seven days in the vase after purchase. So any flowers being handled in our supply chain have to meet these consumer expectations. Therefore, in my opinion, our future success in a globalized world depends on our capacity to organize a reliable, efficient and sustainable supply chain.”

Edwin Wenink Edwin Wenink is a logistic expert, working for Royal FloraHolland. He is the Programme Director of FLOW (Floricultural Logistic Optimisation Worldwide), a strategic programme that focuses on reducing supply cost between grower and market place by 15%.

FloraCulture International May-June 2017

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“It’s like the Oscars for plants.” Will you be there?

Carlos Manuel Uribe MD, Flores El Capiro, Colombia, IGOTY Winner 2017

“It’s a very emotional ceremony and this prize is for our workers! At this award you are surrounded by the biggest and best in the world, so you should be there.”

“This past year we got amazing coverage, literally all over the world. The owners and workers were all very excited. We were humbled and it really did motivate us to do even better. It really was a very huge moment for Costa Farms!”

Leo Hoogendoorn CEO, Florensis, The Netherlands, Young plants Gold Winner 2016

Mike Rimland Costa Farms, USA, IGOTY winner 2016

Poul Graff Owner, Graff Kristensen, Denmark, Young plants Gold Winner 2017

“This award is very different from any other award, as it’s given to us by fellow plantsmen. This is a fantastic honour for our team, so they can see that vision and strategy is not just a paper exercise.”

“It feels a bit like winning the gold medal in the Olympics. It’s a great way for a company and its staff to be rewarded.”

Enter by 15 July 2017 www.aiph.org/groweroftheyear

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Events

What’s hot? We would like to share some highlights of upcoming events that we think may be of interest to you.

AUGUST AND SEPTEMBER

Flower floats Should you find yourself in the Netherlands in August or September, be sure not to miss an important Dutch floral tradition, a flower float. There’s a sailing flower float near Naaldwijk the first weekend of August (4-6). The Rijnsburg Flower Parade will be held the following weekend (August 11-13). On September 2-3 Eelde will have its Dahlia Parade and the famous Zundert flower parade will take place on September 3-4. All of these floats show just how beautiful flowers can be and the emotions you can express with them.

JUNE 7–9

IFTEX Nairobi IFTEX Nairobi will be held from June 7 till June 9 at the ‘Shree Visa Oshwal Community Center’ in Parklands Nairobi. The exhibition space has grown from 6000 m2 to 12,000 m2. IFTEX is important for the region, not only for the Kenyan floral industry but also for growers from South

Africa, Zimbabwe, Tanzania, Zambia, Uganda, Ethiopia and other African flower producing countries. IFTEX expects buyers from Europe, Russia, USA, Middle East, Southeast Asia and Africa itself. See also: www.hppexhibitions.com

See also: www.varendcorso.nl, www.rijnsburgscorso.nl, www.bloemencorsoeelde.nl, www.corsozundert.nl

Colophon FloraCulture International is an independent international trade magazine gifted to the floral industry by Royal FloraHolland. FCI shares knowledge within the industry by bringing together markets, people and cultures because we believe this will make us all bloom.

JUNE 20–22

Salon de Végétal 40,000 m2 of exhibition space await you from June 20-22 at Salon de Végétal at the Nantes Exhibition Centre (France). Salon de Végétal is about production, floristry and distribution and is the

meeting place for the Green Industry in and outside of France.