The floral market is looking rosy with a healthy U.S. economic outlook. With consumers, retailers and growers feeling optimistic, it is time to take advantage of opportunities in 2018.
Floral may be getting a boost from unlikely sources. Whole Foods reported that in 2018, floral flavors such as rose and lavender will be trending, as will edible flowers. This is the perfect opportunity to cross merchandize flowers for every eating occasion.
Another positive sign is coming from the Society of American Florists, who reported that 64 percent of respondents to the Society of American Florists’ Economic Outlook Survey said they are either “very optimistic” or “optimistic” about sales expectations in 2018. Fifty-eight percent of survey respondents, who represent the entire supply chain, said business right now is “good” or “excellent.”
- All growers said they are either “optimistic” or “very optimistic.”
- Eighty-five percent of respondents in the wholesaler/supplier/importer segment said they are “optimistic” or “very optimistic.”
- Sixty-one percent of retailers said they are “optimistic” or “very optimistic.”
And, what could be more optimistic than Prince and Prince projecting that nearly 44 million U.S. households would make one or more floral purchases to celebrate Valentine’s Day in 2018. The Prince and Prince U.S. consumer floral aggregate spending projection for Valentine's Day 2018 was $3.4 billion dollars at retail, including all fresh floral products (fresh cut flowers, including roses, arrangements, bouquets, bunches, single stems, and corsages, and indoor potted flowering and foliage plants & planters) and any associated delivery/service fees. The average projected spend would be just over $77, and the projected market value for Valentine's Day 2018 was about $106 million more than P&P's 2017 Valentine's Day market projection.
Of course there are some challenges that the industry will continue to face in 2018. The U.S. is suffering from a shortage of truck drivers, which results in higher rates. Layered on top of the driver shortage, government regulations passed in mid-December have new requirements regarding drivers’ hours of service and electronic logging devices. In general, a driver will get less miles per day, making the cost of moving product more expensive. The Packer is reporting that transportation costs in the U.S. are up 20 to 30 percent above a year ago in some shipping regions. These issues are creating concerns and fueling the exploration of driverless trucks.
Greenhouse Grower lists labor as a top industry concern moving into 2018, with most employers saying they have more job openings than applicants. This is creating increased investments in mechanization and automation and alternative labor sources such as H-2A. There is also a challenge with filling skilled positions with substantial increases expected (2.1 million jobs) in professional and technical occupations in the U.S. Most of this is in computer systems design, especially as it relates to mobile technologies, and in management, scientific and technical consulting, according the Bureau of Labor Statistics. Businesses will need advice on planning and logistics, implementing new technologies, and complying with workplace safety, environmental regulations, and employment regulations.
Greenhouse Grower 2018 Survey results help to clarify some of the challenges the floral industry will be facing in 2018.
Grower top concerns:
- Labor: 61%
- Production costs: 54%
- Government regulations: 44%
- Climate change: 42%
- Insect & disease pressure: 40%
- Transportation costs/availability: 25%
Supplier top concerns:
- Competition: 63%
- Grower consolidation: 33%
- Economy: 30%
- Labor/availability of qualified workforce: 30%
- Weather: 28%
- Transportation: 27%
Top operational goals:
- Increase efficiency: 70%
- Improve produce quality: 59%
- Increase margins: 57%
Top areas where growers plan to invest:
- Greenhouse structures & coverings: 45%
- Computer services and technology: 25%
- Irrigation equipment: 23%
- Soil & amendment handling: 22%
- Planting equipment: 19%
Overall, we are off to a great start in 2018 and PMA is here to guide you - from new business connections to the business information you need.