A temperamental topper

Posted On 29 Jan 2007
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The Dutch flower bulb forcing industry is increasing rapidly. The President of the Royal General Bulbgrowers Association (KAVB), Sjaak Langeslag, explains: “For some years Dutch bulbs were sold to European growers, who produced their own flowers. Nowadays, it has become difficult to keep up with the speed of enlargement by the units in the Netherlands. Dutch forcers have not hesitated to apply high-technology and the economies of scale to produce flowers at a low cost-price, which are now exported to these markets. The national flower bulb forcers in England, Germany and France cannot easily compete against this price. The production is now at 1.5 billion stems with +5% growth each year. Renowned growers in the West Friesland area are today investing in new greenhouses, often doubling their capacity. The bulbs are no longer forced on soil but on water. There are forcers who grow over 75 million tulip flowers each year, mainly from their own bulb production. A close relationship exists with suppliers to main supermarket chains; the partners very dependent on each other as it is not easy to source a stable quality in these volumes.
The Dutch sector involves growers who specialise only in forcing (tulip, lily, iris, hyacinth etc.), numbering around 500-600, among a total of around 2,200 bulb growers. The number of bulb exporters is around 200, where it is evident that about 20% command 80% of the export. The consolidation in the supply chain driven by the changes surrounding volume sold by supermarkets, e.g. Wal-Mart, Aldi, Tesco etc.


Reap the benefits
Table 1 indicates the leading export destinations for Dutch bulbs where the ratio of dry sales: forcing has, according to Langeslag, diminished over recent years in France and Germany, while in Italy forcing gladioli and lily is more common than tulip. Sweden has implemented a strong forcing industry using technology and knowledge from Holland. The tulips are destined for use in their own market.
In the USA and Japan, it remains cheaper to export bulbs in sea containers. There are, however, tulips sold at the Dutch auction, which are air freighted into the USA for sale on the same day – permitted by the time difference. Imported bulbs are forced for sale as potted bulbs for Mother’s Day and Valentine’s Day; there is also a trend towards Dutch owned tulip forcing facilities in the USA.
Langeslag comments, “There is a lot of information available on how to force bulbs. Small scale can be interesting; it is not necessary to copy the large scale of the Netherlands. Many countries have florists and small supermarket chains where Dutch flowers are not easily accessible. Both the strong seasonal appeal of tulips and the exciting market for potted bulbs – lily, hyacinth, crocus, narcissus etc. – is an opportunity for growers in many countries.” 


Shortfall or oversupply?
Commenting on the expectations for this flower bulb season Langeslag says, “Tulips prices were acceptable last year. Subsequently, the forcers are optimistic about this season and have bought a substantial number of bulbs. The number of flowers will, I believe, be more than last year and it is to hope that the price will be at a good level. There is always the risk that too many people are optimistic with too many flowers brought onto the market, forcing the price down. It is always a fine line since 5% over production can cause a dramatic decrease in price.
Various strategies govern production and marketing. Those using their own bulbs, for example, can be flexible in their planning over an extended period. Specialist forcers often already buy their bulbs in January, which will be harvested in June, to make sure they will have the assortment they need. Others may buy bulbs at harvest and thus decide which varieties are needed at a late stage. Most forcers have a preference to have the bulbs in their own storage as early as possible to control the bulb development depending on the desired flowering time. Langeslag reminds, “All plans are subject to the weather; the harvest can always be bigger or smaller than expected.”
The forcing period can be very precisely controlled, e.g. delivery of tulips for February 14, because of the available knowledge about steering the development of the flower inside the bulb during the preparation period. Nowadays, when the bulbs are harvested in June, they are often planted in the forcing boxes in September and October and stored at a low temperature. Sometimes they will be stored at minus 1°C. In the freezer, bulbs can be kept for up to one year. Research is carried out on individual varieties to know how each variety reacts to temperature, the time required for development and climate influences on stem length etc.. Cooling chambers, greenhouses with temperature control support this accuracy.
In a marketing strategy, careful consideration is given to the optimum facility output and the volume of tulips introduced into the market on any one day; auction prices are very sensitive to supply and demand. The large retailers have introduced a level of security by ordering in advance. Langeslag says, “In recent years, the KAVB has tried to monitor production to help avoid extremes in oversupply or shortfall. Actual output remains in the hands of the individual companies. We can only focus on correctly informing the sector about the estimated total output, our promotional activities and the retail interest in long term contracts. Reactions to the latter point are various; some remain comfortable following their own strategy while others, particularly the larger sites, are keen to have more security.”


Standard season
There are two separate markets for the flowers; large retail chains absorbing high numbers at low price and the florists seeking special varieties, high quality, heavier flowers at a higher price. The standard season is December to March. Year round production is possible, using freezing or bulbs from the southern hemisphere. On a small scale tulips are grown year round since there are occasions, out of season,  where tulips remain popular. Langeslag emphasises, “The spring season is a strong phenomenon and must be nurtured.”
Finally, the seasonal spirit does introduce one disadvantage, Langeslag ends: “The problem for tulip sales is Easter as this is traditionally the end of the tulip season. It can be very strict – we are not sure whether this is because of the consumer or the retailer. Discussions are now underway with retail to try and postpone the moment that tulip sales stop. In 2008, for example, Easter is very early and the shortening of the season has dramatic effects on potential business for the sector.” 

Retail supplier
One of the largest retail suppliers in Europe is the Leliveld Group located in Aalsmeer, the Netherlands. Advice from a designer, with origins in the fashion world, have allowed the group to characterize three key types of consumer; the extrovert Vanessa, a more classical Sophie and the modern, no nonsense Ellen. The consumer philosophy provides the group with a visual basis for product innovation in flowers, plants and arrangements.Frank Spring in ‘t Veld, Commercial Director Leliveld Group, says, “Growers have to realise who their customers are. One of our functions is to increase their involvement in this area, and we put direct contact with European growers as a priority. The relationship will reduce costs in the supply chain. Supermarkets, discounters and garden centres are increasingly more professional and in years ahead, they will sell a broader ornamentals assortment. The advantage for growers is continuity. Our retail customers have a sales calendar whereby successful actions are repeated. Growers can plan and grow based on these orders. The contract production delivering products to exact specifications from traceable locations.” Spring in ‘t Veld adds, “There is also no reason why growers cannot deliver products directly to their own local market using our established sales, marketing and logistics network. Growers do have to adapt to negotiating over price rather than using the clock.”
Referring directly to the tulip season, Spring in ‘t Veld categorises the tulip as a special product. He says, “Management of this seasonal product is always difficult. Every year there are always a lot of rumours about the price where comparisons are made to the previous year and the bulb harvest results. Price rumours decide how many tulips are sold before the season starts. This year, prices are expected to be up one euro cent due to a forecast shortfall in supply; the combination of the high bulb wastage at harvest (5% compared to 2% in the previous season) and less bulbs having been sold – but, you never know!” 


Promotional boost
The appreciation of seasonal products among consumers is increasing. The Flower Council of Holland and the International Flowerbulb Centre organizes specific consumer promotion activities to support the flower bulb season.

The Netherlands
Linking into the year round consumer promotion program ‘Gek op Bloemen’ (Crazy about flowers), during week 2-5 the TV spots and media releases place extra attention to the theme ‘Crazy about Tulips’.

A group of 29 Cash & Carry outlets are participating for the first time in a promotional campaign for tulips in week 3, 10 and 15/16. The latter period, after Easter, particularly targeting an impulse to extend the sales season for tulips.The German supermarkets will also be exposed this year to an array of promotional activities and information about the large choice in tulip varieties.

Russia, Poland, Czech Republic
Activities at wholesale level focus on transferring good information and inspirational concepts, e.g. printed brochures in three languages and organised floral demonstrations. 

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