The year 2014 has been one of many challenges for those who are in the business of distributing fresh flowers in the United States. In short, their costs are higher and their customer base is declining.

Global economics have converged to create an environment of higher freight expenses and limited availability of air space for moving flowers from offshore growers to the U.S. Airlines have reduced their capacity for transporting flowers from Colombia and Ecuador to Miami because they were losing money by providing the service. This situation is very likely to become more acute in 2015.

Costs of flowers have also faced upward pressure by increased demand, especially for premium roses, from other parts of the world such as Europe and Russia. This has limited the accessibility of some of the more desirable varieties.

Domestically, local wholesale florists who historically have served traditional brick-and-mortar, full-service retail florists have seen their customers dropping like flies. The Society of American Florists and U.S. Census Bureau statistics show that the number of retail florists in the USA peaked at 27,341 in the early 1990s. Today there are about 12,000. This tendency is continuing, with the expectation that there will soon be fewer than 10,000 surviving florists. Wholesalers parallel this same trend — in the 1990s there were over 1,000 “wholesale doors” throughout the U.S. Today there are fewer than half that number. The consolidation process appears likely to carry on as the consumer market share of the traditional florist continues to decline.

Importers and distributors who serve the supermarkets and big box stores are also experiencing significant concerns. This segment of the industry appears to have reached maturity and the growth of retail supermarket floral sales has become stagnant. Corporate management of the large supermarket companies has generally paid little attention to flower sales, because flowers produce only a small percentage of their total sales. Their position is usually that flower department costs should fit the overall business model. This viewpoint results in limiting the payroll available for the flower department and hence sales growth, even though flowers can return a higher gross margin contribution than other supermarket categories. This corporate philosophy presents particular challenges for those who operate the flower departments, and subsequently to those distributors who serve them.

Flower purchases on the Internet are the “new kid on the block,” and they have increasingly captured additional market share in each of the recent years. Many consumers, particularly millennials, have become accustomed to doing their shopping online. The phenomenon of shipping a box of flowers directly from the grower or distributor to the consumer via overnight courier has experienced dramatic growth. This growth has come at the expense of the traditional sources of flowers, supermarkets and retail florists, putting all the more pressure on wholesalers who serve them. Even though this sounds like sour grapes coming from a traditional wholesaler, the facts are that consumers who receive a box of flowers by overnight courier are receiving a much more costly bunch of flowers which will not last as long, because the box of flowers has been transported outside of the cold chain. Many of those first-time flower consumers are not likely to see enough value in the flowers they receive in the box to make it probable that they will purchase flowers again.

Although 2015 will probably see a continuation of the negative dynamics that we experienced in 2014, there are also some positive developments.

•Flowers for weddings and special events have become increasingly popular. Retailers who specialize in obliging this demand depend on services that a local wholesaler can provide best. This customer segment is growing rapidly for the wholesalers.

•Flower quality, and the potential consumer experience, is better than ever. Availability of new flower varieties and increased sophistication in the traditional distribution chain combine to deliver a more desirable and higher-quality product.

•Development of latent consumer demand should increase with promotion of occasions such as Women’s Day (a huge holiday in Europe).

•There is a promising new generation of flower buyers, as evidenced by growth in prom flower sales.

The greatest opportunity for all in the flower industry is to dramatically increase consumer demand through major national promotion. Americans love flowers. They just need to be reminded to purchase them. A federal promotion order could raise the funds to accomplish this, in a way that is broad based and fair to all. All we need to initiate the process for a promotion order is the enthusiastic support of the largest importers and growers. 2015 could be the year.

Red Kennicott is chief executive officer at Kennicott Bros. Co. in Chicago. He can be contacted at [email protected].