In a series of columns, Royal FloraHolland gives the floor to directors and managers of Royal FloraHolland. In the first column of 2023, they give the floor to CEO Steven van Schilfgaarde.
We are already in the second week of January. The head is off. I hope everyone has been able to use the Christmas and New Year period to start 2023 full of energy. Needless to say, I wish everyone the best in this new year. Besides health and happiness, I hope 2023 will be a better year for Ornamental Horticulture in business terms.
2022 was a difficult and especially unpredictable year. Whereas December often still had a final sprint in store, this time, it did not. In the end, turnover on our marketplace did pass the EUR 5 billion mark at the last minute. That is only the second time in history, but the final result is still almost 600 million less than in the previous year. A big difference from other years is that there is no overall picture to paint. Depending on the crop and the energy position of growers, there are very large individual differences. For everyone in the sector, and therefore certainly also for our growers, the cost increase was and is very high. If it wasn’t for energy, it was for labor, raw materials, or transport.
Unfortunately, we see that the price point in major retail (read: supermarkets) is not going up. That means consumers are getting fewer flowers per bunch for the same amount of money. The quality of flowers and plants is also a concern in that channel. I myself was shocked by the presentation of flowers I found this week at the supermarket I frequent. Small bunches with no appearance. That’s bad for the image. We do see price increases in fruit and vegetables and dairy products, for instance. But in flowers, it remains absent. It is in the interest of the entire sector that the real value of flowers and plants is reflected in the price. If this does not happen, growers will soon be unable to earn a dry living, with all its consequences.
Plenty of challenges
We face more challenges this year. From the Members’ Council, we are shaping the cooperative of the future. Over the next six months, this should lead to new forms of binding in combination with user packages that will have to be defined in more detail. One-size-fits-all no longer works well for the cooperative either. In addition, we want to move towards a new rhythm for the sector. It is no longer tenable to start auctioning at six o’clock by default and then deliver the products to the customer within a few hours. New combinations of day trading and today for tomorrow are necessary. It is a complex puzzle where the pieces of new auctioning and new logistics must fit together seamlessly. This should ultimately create a more efficient whole that ensures cost savings at all links in the chain. It, therefore, affects everyone. It means that growers and buyers will also have to adapt. The basis will soon be standard services, with additional (paid) services and many more possibilities for customization. Only then will it be possible to work more efficiently and achieve chain optimization.
Our digital platform Floriday forms the basis for that chain optimization. We are already seeing chain efficiency increase. The APIs are available, and so software suppliers can connect with their customers. Many growers and buyers are already taking advantage of the convenience and other benefits Floriday offers. I expect that this year we will take a very big step and many more users will benefit from Floriday.
I see plenty of opportunities for everyone in the industry to respond to the challenges we face. Many will say that I have forgotten some important ones, and reality is unpredictable. I certainly haven’t forgotten them, but it would go too far to name them all now. The unpredictability is out of our control. But if we succeed in working together as a sector to entice consumers to pay a more realistic price for flowers and plants, solve the puzzle that leads to a new rhythm in the sector, and, in addition, take steps towards further digitalization, I am convinced that together we will have a bright future.