FloraHolland adapts to meet changes in the sector

The annual turnover of the Royal FloraHolland Flower Auction Cooperative for 2012 amounts to €4.4 billion. That is a slight growth of 3% compared to the previous year. This growth in sales is due to an increase in the average price. Volumes remained practically stable, totaling 12.5 billion flowers and plants traded.

“While not all growers were able to profit from the improved prices, on the whole, our 5000 national and international members are satisfied. European consumers continue to purchase flowers and plants and the Dutch floriculture cluster has retained its strong position,” said FloraHolland General Director Timo Huges.

Despite the current economic circumstances, FloraHolland’s turnover has risen. At the same time, the auction is facing the challenges posed by a change to the sales method. The international sales platform is being used differently and in the market, a further and more rapid shift from clock sales to direct sales via FloraHolland Connect has been observed. Even though direct sales continue to be settled via FloraHolland, less auction trolleys are appearing at the clock, resulting in reduced logistics work and a reduced need for manpower. The auction is working on its flexibility in order to reallocate manpower elsewhere in the company. On balance, this will lead to downsizing that the auction wants to absorb via natural wastage.

Expenses and incomes are not aligned currently and a healthy result is needed for the continuity of the business. In the coming years, FloraHolland will arrange its incomes and expenditures in such a way that revenues from services will be generated where the costs are found. Additionally, the members see the clock as an essential sales instrument. For this reason, the auction is taking steps to make the clock system technically and commercially more attractive.

Developing services
FloraHolland’s members continue to use their cooperative to sell their products. The auction develops services to put its members into the best sales position for the lowest possible price and to do so, FloraHolland forms consortiums with various chain parties, allowing growers, together with buyers and end customers, to generate increased returns from the flowers departments in stores. Via the Florist Exclusive service, unique products are offered to florists who desire to further distinguish themselves. To this end, FloraHolland has set up collaboration with eight wholesale companies to make these unique products from a select group of growers available online. Now that sales are increasingly proceeding via the members themselves, the auction is developing new services internationally. Growers want to settle international transactions via the auction, so FloraHolland has adjusted its invoicing methods to make this possible.

Product-specific promotion
Through the cessation of statutory trade organizations such as the Horticultural Product Board and the Agricultural Wholesale Commodity Board, fewer collective levies are available. FloraHolland will be taking on those tasks that will be useful and/or necessary for its members. For instance, it has taken on the organization of the Horticultural Product Board’s consumer panels. Thanks to these panels, the auction’s members and customers can continue to gain insight into consumer behavior in the most important sales regions. Additionally, FloraHolland has taken on the financing of the collective promotion of flowers and plants, and has simplified the financing of product-specific promotion.

Source: Hortibiz

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