Understanding the true value of flowers: How to price flowers fairly

In a recent issue of Floral Management Magazine, Victor Giorgini, president and CEO of Rio Roses, collaborated with the Society of American Florists to offer insights into the complex factors influencing flower pricing. The company emphasized the unique opportunity the floral industry has to grow together, despite challenges. This perspective highlights the importance of collaboration between growers and florists to ensure the sustainability of the floral supply chain.

Labor Costs: The Foundation of Flower Production

Labor is a key factor in flower production, particularly in Colombia and Ecuador, which together supply over 83 percent of the cut flowers purchased in the United States. In these countries, labor accounts for more than 50 percent of production costs, and recently, growers have faced significant labor challenges:

• Rising Wages: Since 2021, minimum wages in Colombia have increased by 38.5 percent, ensuring fair pay for workers but also significantly raising production costs.
• Labor Shortages: A growing trend of younger workers pursuing other career paths has made it more difficult to find and retain skilled labor for the physically demanding work of flower farming.

To address these challenges, many farms are adopting innovative practices to stabilize their workforce while maintaining high-quality, consistent flowers.

Currency and Climate: Adapting to External Challenges

Several external factors continue to influence the floral industry, including currency fluctuations and climate conditions:

• Currency Fluctuations: In Colombia, the strength of the U.S. dollar directly impacts growers’ earnings, with a weaker dollar reducing their revenue when converted to the local currency.
• Unpredictable Weather: Events such as El Niño have brought unpredictable weather patterns, including droughts, extreme temperatures, and heavy rainfall. These disruptions have led to shortened growing cycles and challenges in producing premium blooms.

Despite these external challenges, growers are finding ways to adapt through sustainable practices and innovative solutions to maintain steady production.

Freight and Shipping: Navigating Rising Costs

The process of transporting flowers from farms to florists has become increasingly complex and costly:

• Air Freight Costs: Since 2019, air freight rates have risen by up to 32percent.
• Limited Cargo Space: Airlines tend to prioritize more profitable cargo, such as consumer goods, over flowers, leading to delays and higher transportation costs.

Growers and exporters are working diligently to ensure that flowers arrive at their destination on time and in optimal condition, despite rising costs and logistical challenges.

Why Flower Prices Are Rising

Understanding the factors behind rising flower prices is essential. The increase in prices reflects actual costs, including:

• Higher labor expenses
• Currency fluctuations
• Climate-related disruptions
• Increased freight and shipping costs

When customers are aware of these challenges, they are more likely to appreciate the value of flowers and the effort required to bring them to market.

How Florists Can Support the Industry

Florists play a critical role in educating customers and building loyalty. Here are some ways they can help bridge the gap:

• Share the Story: Florists can help customers understand the care and effort that go into each bloom, from farm to florist.
• Highlight Quality: Florists can emphasize the value of premium flowers and the expertise involved in their production.
• Be Transparent: By explaining how external factors affect pricing, florists can encourage a deeper appreciation for the hard work behind each flower.

Through education and transparency, florists can strengthen relationships with customers and contribute to the success and sustainability of the floral industry.

Moving Forward Together

The floral industry thrives on collaboration. Every part of the supply chain—from growers to florists to customers—plays a vital role in sustaining the beauty of flowers. By embracing change, supporting growers, and promoting transparency, the industry can create a more sustainable and thriving floral supply chain. Together, the industry can overcome challenges and continue to bring joy and beauty to people’s lives through the timeless appeal of flowers.