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Sweden

Market ReportFocus on the EU and Swedish Market

Floricultural Products

May 2011

The Swedish Chambers of Commerce


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Disclaimer

The information provided in this market report is believed to beaccurate at the time of publishing. It is, however, passed on to

the reader without any responsibility on the part of the authorsand it does not release the reader from the obligation to comply

with all applicable legislation.The authors or publishers made no warranty, expressed or

implied, concerning the accuracy of the information presented,and will not be liable to injury claims pertaining to the use of this

publiation or the information contained therein.No obligation is assumed for updating or amending this

publication for any reasons, be it new or contrary information orchanges in legislation, regulations or jurisdiction.

This document has been financed by the Swedish International DevelopmentCooporation Agency, Sida. Sida does not necessarily share the views expressedin this material. Responsibility for its contents rests entirely with the author.


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The EU and Swedish Market for Floricultural Products

1

SummaryThis market brief provides a description of the EUmarket for floricultural products, including pot

plants, cut flowers and foliage; followed by an in-depth analysis of the Swedish market. Theobjective of this guide is to help exporters offloricultural products in developing countries tounderstand the Swedish floricultural market andtherefore improve their chances of export successon the market. This brief is also useful for BusinessSupport Organisations (BSOs) in developingcountries who want to support the floriculturalindustry in their countries.

Among the three product categories, cut flowersoffer the best opportunity for exporters fromdeveloping countries, and therefore are the focus

of this summary and market brief.

EU floricultural marketThe European market (including non-EU countries)for cut flowers is valued at approximately 18billion in 2011, accounting for around 56% of theglobal market. The size of the European pot plantmarket is smaller, valued at 12.5 billion. Bothmarkets are expected to grow further to reach 22billion and 15 billion in 2016 respectively.

Germany was the largest market in the EU in 2008(23%), followed by the UK (15%), France (14%), Italy(11%) and the Netherlands (8.0%). Germany also

ranked first in the EU in terms of consumption ofpot plants in 2007 (41%), followed by France (12%),the UK (8.0%), Italy (6.0%) and the Netherlands(5.0%). The majority of the EU floricultural marketis supplied by the Netherlands.

Most Western and Southern European markets aremature or saturated, with limited growth potential.These markets have high floriculture consumptionper capita and intense market competition.Consumption in these countries is mainly for gifts,and to a much lesser extent for personal use. TheCentral and Eastern European markets on the otherhand are expanding, and are expected to grow

further with improving consumer wealth.

EU floricultural production accounts for around 40-50% of the world, estimated at 19.5 billion in2009. Major producing countries were theNetherlands (30%), Italy (15%), Germany (13%),France (11%) and Spain (11%).

Most of floricultural import to the EU is traded viaflower auctions. The auctions in the Netherlands(especially FloraHolland) are the most developedand represent an important hub for floriculturalimports from developing countries. Concentratingon a high level of demand and supply, they also

serve as a price setting institution in the EU.Floricultural trade also occurs directly fromgrowers/exporters to intermediaries, such as agents

and wholesalers, who distribute the product tolocal retailers or export to other EU countries.

In the EU retail market, florists continue todominate although other retail channels haveincreased their market share, particularlysupermarket chains and garden centres. Due tomuch stiffer competition, new retail formats withunique value propositions have emerged in the EU,including flower delivery networks, florist chains,online florists, etc.

The most important trends in the EU market areprice sensitivity; growth driver shift to Central andEastern Europe, more complex consumerrequirements, increased importance of fair

flowers, online sales, increased importance ofdirect trade, restructuring of trade channels andincreased transparency in the trade channel.

Swedish floricultural marketSweden is a mature market for floriculturalproducts and is considered a medium-sized marketin the EU. The country accounts for around 1.5-2.0%of the total EU market for cut flowers and around3.0-5.0% for pot plants.

The Swedish cut flower market is dominated byroses (around 30% of cut flower sales), followed bytulips (around 20%). Flowering plants are popular in

the Swedish pot plant market, with orchids beingthe most imported product, followed by Rosa. Themost popular imported foliage plants are Ficus andDracaena.

Around one third of cut flower purchases are forpersonal use, while 75% of pot plant purchases arefor this purpose. Florists strongly dominate theSwedish cut flower market, accounting for anestimated 40% of total cut flower sales, followed bysupermarkets (30-35%) and garden centres (10-15%). Garden retail centres, however, account forabout one third of total pot plant sales, followed bysupermarkets (25%) and florists (15-20%).

Floricultural production in Sweden is quite limitedand has been declining. Tulip is the only type offlower production in Sweden, while production forpot plants includes both indoor (especiallyPelargonium or Geranium) and outdoor (especiallyViolas or Pansy) use.

The most important trends in the Swedish marketare slow demand recovery, continuation of pricesensitivity, change in trade structure, increasedimportance of social and environmentalcertification/labels and increased popularity ofhome and garden decoration.


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Swedish floricultural tradeDue to a limited scale of production, the majorityof floricultural products in Sweden are imported.Imports from other EU countries account for morethan 90% of total imports; half of which is

accounted for by the Netherlands. Direct importsfrom developing countries account for 6.5% of totalimports, with Kenya being the main supplier.However, a significant number of flowers fromdeveloping countries are re-exported from theNetherlands to Sweden. Cut flower imports toSweden from developing countries are estimated toaccount for around 40-60% of total Swedish imports.Important products from developing countriesinclude dianthus (especially from Colombia), rosa(especially from Kenya) and orchid (Thailand).

A small portion (6.7%) of imported foliage is fromdeveloping countries, mostly from China. Pot

plants, however, are hardly imported fromdeveloping countries.

Trade price levels of cut flowers to Swedenrecorded a peak in 2006-2007. In 2008 and 2009,the economic recession resulted in a significantpressure on prices before wearing off in 2010.

Trade channelsThere are around 50 floricultural wholesalers inSweden, most of which are specialised in potplants. Most players are small-sized and locallyorientated. Around 20 wholesalers source theirsupply internationally, mostly from the Netherlands

and Denmark, while around 5-10 of them importfrom developing countries.

Most floricultural products imported to Sweden aretraded via auctions. However, direct trade hasincreased a lot in recent years. Supermarkets, inparticular, engage in direct trade; sincesupermarkets account for 30-40% of cut flowersales, it can be assumed that the share of directtrade in Sweden is at least 20%, roughly.

The best opportunity for companies in developingcountries is in the Swedish cut flower market as

opportunities in the pot plant market are limited.In addition, there are some opportunities for youngplant material; however, for these products otherEU countries than Sweden are more attractive.

Exporting cut flowers to Sweden can be done inseveral ways. In fact, it is not possible to advise onone best channel for the Swedish market. Mostimportant is that exporters should make a distinctchoice between direct sales and auction trade.

Market access requirementsAll floricultural imports into the EU, includingSweden, must meet phytosanitary legislation. Apartfrom that, Swedish consumers are also highlyconcerned about the sustainability aspect offloricultural cultivation, which has led to anincrease in the adoption of relevant consumerlabels, such as Fair Flower Fair Plants (FFP) and

Fairtrade, by Swedish floricultural retailers. Apartfrom consumer labels, sustainability standards/certification systems, especially MPS-ECAS, hasstarted to be regarded as an increasingly importantbuyer requirement in Sweden. This trend is robustin not only Sweden, but also elsewhere in the EU.

Doing businessFinding the right trading partner is a crucial firststep. The market brief emphasises the importanceof direct contact which can be best established byorganising a roadshow or buyer event. While aroadshow is a business trip collectively organised bya group of exporters to meet prospects in the

desired export country, a buyer event is when agroup of exporters collectively invite prospects tovisit their farms/facilities in their country. Bothtypes of events allow exporters the time andopportunity to present themselves and theircompanies to prospects, which increases thechance of establishing mutual agreements. Theorganisation of these events could be well assistedby BSOs. Other, but less relevant channels forpromoting ones company are trade fairs and trademagazines/journals.


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List of Contents

Chapter Page

Introduction 4

1 EU market for floricultural products 51.1 Consumption 51.2 Production 81.3 Trade channels for market entry 91.4 Trends and developments in the EU Floricultural market 10

2 Swedish market for floricultural products 122.1 Consumption 122.2 Trade 152.3 Trade structure

2.4 Trends 202.5 Market access requirements 212.6 Prices 22

3 Doing business in Sweden 27

4 Recommendations for BSOs in developing countries 28

Appendix 1 30Selected product groups and products, based on Eurostat

Compiled by Facts, Figures and Future bv, The Netherlands

Sida May 2011Issued by: Swedish Chambers of Commerce / Trade Promotion Programme.


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Introduction

Objective

The main aim of this market brief is to supportproducers from developing countries inunderstanding and, consequently, improving theirposition on the EU and Swedish market.Furthermore, this report is also very useful for BSOsin developing countries dealing with thefloricultural (export) industry in their own country.

Statistical product classificationThis market brief deals with three productcategories: pot plants including young plantmaterial, cut flowers and foliage. The classificationof products used in this market brief are based onthe European Unions Combined Nomenclature

(CN), which are in turn based on the HarmonisedSystem (HS) classification developed by the WorldCustoms Organisation. The trade statistics areextracted from the Eurostat database (Eurostat isthe statistical body of the EU). Table 1.1 shows thethree product categories and their product groups.Refer to Appendix 1 for an overview of the selectedCN codes. If reference is made to all productsinvolved, the term floricultural products will beused.

Table 1.1 Selected product categories and productgroups for floricultural products

Product category Product group

pot plants finished indoor plants

finished outdoor plants

young plant material

cut flowers Chrysanthemum

Dianthus

Gladiolus

Rosa

Orchids

other cut flowers

Foliage Dried

Dyed

Fresh

Source: Facts Figures Future, based on Eurostat (2011)

MethodologyThis research was conducted in the period April-May 2011. A list of the main sources used for deskresearch can be found in Chapter 10. In addition,

in-depth interviews with representatives of several

types of organisations were conducted. Theinterviewees represented the following (type of)organisations:

An international agency representingKenyan rose growers, working from Dubaiand selling to one of the main wholesalersin Sweden.

The Swedish Floricultural trade Association(BRO).

The Swedish Fair-Trade Association.

One of the two leaders in the pot plant

market in Sweden, Gasa.

Report structureThis market brief describes and explains theSwedish market for a selection of floriculturalproducts. Although the main focus is on cutflowers, since these products offer the mostopportunities to exporters from developingcountries, some attention will also be paid tofoliage, pot plants and young plant material. Inseveral chapters, attention is paid to thecharacteristics of consumption, trade, distribution,trends and developments, buyer requirements,prices and doing business. Before focusing on the

Swedish market, we will consider the EU market forthese products. The last two chapters containuseful links for conducting further research and tipsfor growers and Business Support Organisations(BSOs).


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1 EU market for floricultural products

This chapter describes the floricultural industry in

the EU. Discussions on the Swedish market areprovided in the chapters that follow. Marketopportunities for floricultural exporters indeveloping countries are far more promising for cutflowers than pot plants. As a result, this chapterwill focus more on the cut flower market.

1.1 Consumption

Market sizeAccording to the Dutch Association of WholesaleTrade in Horticultural Products (VGB), the totalvalue of the global cut flower market is 31 billionin 2011. The European market (including non-EU

countries) for cut flowers accounts for the majorityof the global market (56%) or approximately 18billion in 2011. This regional market is expected togrow further to reach 22 billion in 2016,representing a growth of 41% between 2006-2016.The size of the European pot plant market issmaller, valued at 12.5 billion in 2011 and isexpected to reach almost 15 billion in 2016,representing a growth of 37% in the period 2006-2016.

Major flower consuming countries in the world areconcentrated in Western Europe. Of the worlds tenlargest national markets for cut flowers, six are in

the EU, namely Germany, the UK, France, Italy, the

Netherlands and Spain. Other important markets

are the U.S. and Japan, accounting for around 20%each. Recently, Russia and the Middle East havealso become important markets with rapid marketgrowth.

The EU consumption of flowers and plants has beenrelatively stable in recent years with a temporarysales decline in 2009. The crisis led to anoversupply of flowers and decline in demand in thatyear.

International trade plays a main role forfloricultural products. The Netherlands, inparticular, supplies almost 75% of the EU marketand around 80-90% of the UK, Germany andFrances imports. In addition, the Netherlands isalso the main distribution hub of floriculturalproducts, with products being imported anddistributed to other EU countries.

EU market characteristicsIn Europe, the different national markets have theirown particular characteristics. The Flower Councilof Holland categorises different EU markets intofour stages of product life cycles (PLC). The tablebelow provides a brief market description of eachstage of PLC and also indicates which nationalmarkets belong to each stage.

Market characteristics Cut flower markets Pot plant markets

Market

introduction

This stage is characterised by relatively low

consumer awareness of the product and its

benefits. Customers have to be prompted to try

the product. Level of competition, sales and

consumption per capita is the lowest.

- Romania

- Ukraine

- Romania

- Ukraine

Growth Public awareness about the product starts to

increase, and as a result increases sales

volume.

The market becomes more established with a

few new players. Improved competition leads to

price decreases.

Expenditure per person is relatively low.

Flowers are considered a luxury item and are

bought mainly as gifts.

- Estonia

- Hungary

- Ireland

- Poland- Slovakia

- Estonia

- Greece

- Hungary

- Ireland- Poland

- Portugal

- Slovakia

- The Czech

Republic

- The UK


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Market characteristics Cut flower markets Pot plant markets

Maturity Sales volume peaks at this stage and market

saturation is reached. Flower purchases for

personal use are relatively higher.

Competition level increases as more

competitors enter the market. Brand

differentiation and feature diversification are

often needed to maintain or increase market

share. Prices and profits tend to drop.

- Belgium

- Denmark

- Finland

- France

- Greece

- Portugal

- Sweden

- The Czech

Republic

- The UK

- Austria

- Finland

- France

- Italy

- Sweden

Saturation

and decline

At this stage, sales volume is stable or even

declines. Prices and profitability diminish.

Markets at this stage have a relatively high

consumption per capita of flowers and/or plants.

Flower purchases for personal use are relatively

high.

- Austria

- Germany

- Italy

- The Netherlands

- Belgium

- Denmark

- Germany

- The Netherlands

Source: Flower Council of Holland (Marktvisie 2006 - 2011 - 2016) and Facts Figures Future (2011)

In general, according to the Flower Council ofHolland, most markets for cut flowers in the EUhave entered either market maturity or saturation,and therefore have observed negative or no marketgrowth over the years. On the other hand, thecountries with the highest growth potential are

those in the market introduction and growthphrases. The Swedish markets for cut flowers andpot plants both fall into the maturity stage.

In general, floriculture consumption is stronglyrelated to income levels. This is why markets withhigh purchasing power also have high floricultureconsumption. According to the Flower Council ofHolland, the Nordic countries, as well as Germany,the Netherlands and Austria have the highestconsumption per capita of flowers and plantscombined in the EU. In these countries, theconsumption per capita is in the range of 75-95. Incomparison, other countries in the EU spend much

less on cut flowers and pot plants. Most countries inCentral and Eastern Europe, for example, spend(far) less than 30 per capita.

For the cut flower market in particular, theNetherlands is the leading country in the EU interms of consumption per capita, followed by theUK, Denmark and Ireland. Sweden and Belgiumranked fifth. For the pot plant market, Germanyhas the highest consumption per capita, followedby Sweden, Denmark, Finland and Austria.

Market segmentationThe flower and foliage market is usually segmented

according to consumer use. In general, consumerspurchase flowers for two main purposes, namely asgift items and for own use.

Gift itemPurchases of flowers as gift items are mostly madefor special occasions, such as birthdays, weddings,funerals, as well as for festive occasions orholidays. In the EU, demand for cut flowers peaksaround holidays or festive days, especially Mothers

Day and Valentines Day, which together accountfor almost 20% of cut flower sales. In addition,certain species of flowers are associated withparticular occasions, for instance, carnations forfunerals and poppies for Remembrance Day.

The gift segment is important for the flowermarket. Flowers marketed/sold as gifts, however,experience relatively high price elasticity. This isbecause their demand also depends on the pricelevel of other gift items, e.g. wine, jewellery,ceramics and confectionary, which can besubstituted for flowers. If the price of flowersbecomes higher than other gift categories,

consumers are likely to buy other gift items insteadof flowers. Buying flowers as gifts is more commonamong women than men.

Own useEU consumers also buy flowers for their own use,usually with the intention of creating a pleasantatmosphere or brightening up their home, office orgarden. EU consumers, especially in the mature orsaturated markets, generally find pleasure in homeand garden decoration and increasingly purchaseflowers and plants for this purpose.

More than half of cut flowers in most Western and

Southern European countries are purchased for giftsand a smaller proportion are purchased for personal


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use. This includes Germany, Italy, Spain, theNetherlands, France and Sweden.

In the two market segments, consumerrequirements differ significantly. In the gift

segment, consumers tend to spend more time andeffort in planning and sorting out the product. Thiscan be a special wedding bouquet or flowerarrangement for a funeral. On the other hand,flower purchases for own use can be described asimpulse buying, in which consumers have had noprior plan or intention of buying a flower/plant.Ease of finding and buying the product, as well asaffordable price levels are crucial for purchases inthis segment.

Market segmentation also determines where theproduct is available. For example, florists tend totarget the gift and special occasion segment as

they are able to custom make bouquets or flowerarrangements according to customers wishes interms of size, flower variety, colour and design. Onthe other hand, flowers and plants for the own usesegment in the EU are purchased more viasupermarkets, garden centres and Do-It-Yourselfstores. As these retail chains focus on bulk buying,they are able to offer their flowers or plants at arelatively low price suitable for this segment.

AssortmentThere are no official data available on the salesvolume of flowers and plants in the EU.Nevertheless, in order to provide an indication ofwhich flower and plant varieties are in demand, a

summary of the amount of turnover per type offlowers at Dutch auctions in 2009 is provided in thefigures below. These data present a good indicationof which cut flowers and pot plants are currently indemand in the EU.

As can be seen, roses are by far the most importantcut flower, followed by Chrysanthemum, Tulipa,Lilium and Gerbera. There is a wide and deepassortment of roses available in the EU and theyare purchased for many different occasions.Consumers preferences have gradually shiftedfrom small-budded (e.g. Intermediates andSweethearts) to larger ones (e.g. T-Hybrids).

Small-budded roses are increasingly associated withgeneric or bulk product, partly due to their lowerprice and dominant presence in supermarketchains. Larger rose varieties, on the other hand,are primarily sold in more specialised channels,such as the florist. They are relatively higher pricedand are bought for special occasions.

Figure 1.1 Top ten cut flowers at Dutch auctions, turnover in million, 2009

Source: VBN (2010)


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Figure 1.2 Top ten pot plants at Dutch auctions, turnover in million, 2009

Source: VBN (2010)

Between 70-80% of all cut flowers sold in the EU arebought in mono bunches, which contain onevariety, or bought per stem. The rest is bought inbouquets of different varieties of flowers andfoliage or in flower arrangements. The FlowerCouncil of Holland reports that when purchasingflowers, consumers usually look for criteria asfollows: quality (36%), price (13%), species (13%)and colour (10%).

1.2 Production

Traditionally, demand for cut flowers was satisfiedby local production. This is also why countries withlarge domestic markets - such as the U.S., Japanand Germany - are also major producers of flowers

and plants. The EU is the largest producer offlowers and plants, accounting for 40-50% of theworlds production. Other main producers are theU.S., China and Japan, each of which accounts foraround 10-15% share. Other smaller producersinclude Canada, Colombia, South Korea and Kenya.

In the EU, production was estimated at 19.5 billionin 2009. Most of the production is concentrated inWestern and Southern Europe, where theNetherlands is by far the leading producing country,accounting for 30% of EU total production value.Other major producers in the EU are Italy (15%),Germany (13%), France (11%) and Spain (11%).

Figure 1.3 EU production of cut flowers and plants, share of main countries, 2009

Source: Eurostat


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According to the Agricultural and Rural Develop-ment (European Commission), the land area offlowers and ornamental plants and nursery plants inthe EU was estimated to cover 195,000 hectares in2009. The Netherlands accounted for the largest

share of this area (43 thousand ha), followed byFrance (27 thousand ha), Germany (26 thousand ha)and Italy (24 thousand ha). The amount of land areaused for growing flowers in the EU is expected todecline in the long term, except for theNetherlands.

1.3 Trade channels for marketentry

Trade of floricultural products in the EU mainlyoccurs either via auctions or direct trade betweenflower growers/exporters and buyers, such as

agents or wholesalers or retailers. The fourchannels are as follows:

Flower auctionsFlower auctions continue to be the mainmarketplace and distribution point of floriculturalproducts in the EU. There are around 10 flowerauctions in the EU, but the most important ones areFloraHolland (http://www.floraholland.com;theNetherlands) and Langard (http://www.langard.de;Germany). Other auctions generate only a smallauction turnover and usually have local importance.

Dutch flower auctions serve as an important

international hub for products from developingcountries. They are owned by domestic growers,but also comprise EU members (growers) outsidethe Netherlands and an increasing share of non-EUmembers. They handle around 80-90% of the localproduce and 60% of Dutch floricultural imports.Concentrating on a high level of supply anddemand, they greatly influence global trade and setthe price of floricultural products, especially in theEU market. Buyers at Dutch auctions are mostlyDutch wholesalers, who resell to retailers or exportto other markets in the EU.

Auction suppliers are subject to the costs ofhandling and selling the flowers, which do notoccur in other trade channels. Exporting viaauctions also takes two to four extra days as theflowers must be re-cut and placed in water prior tothe auctions. This preparation is done again bybuyers after they have been auctioned and beforebeing sent to the final destination. Double-packingpractised in this trade channel reduces vase-lifeand stem length. However, flower auctions are stilla preferred option for many suppliers because theyrepresent a fast and convenient way of sales. Salesat auction are done at the market price andpayments are guaranteed. In addition, there ishardly any quality dispute between buyers andgrowers because flowers via auctions are subject to

a random quality inspection which ensures that the

actual quality of flowers is the same as whatsuppliers declare.

AgentsExporters/growers also deliver directly to an agent,

who in turn either sells the products via an auctionor to wholesalers. Agents represent an importanttrade channel especially for exporters who lackrepresentation and marketing ability in the exportmarket. Agents generate value by providing a rangeof crucial services, including consultancy, marketinformation and consumption trends, facilitatingrelationships with retailers or importers in the EUand (assistance in) marketing activities.

WholesalersThe (import) wholesalers are the link between thegrowers and the retailers. Most wholesalers buyfrom auctions although some also buy directly from

growers or agents. In turn, they deliver the productto other (smaller) wholesalers or retailers both inthe domestic and foreign markets. Product deliveryis usually done on the FOB or CIF basis. While thechallenge of distributing most fresh products lies ingathering large quantities required by retailers,wholesalers of floricultural products have anindispensable role in compiling a large variety offlowers in small volumes. An increasing number ofEU wholesalers conduct business online, withmodern online stores and ordering formats.

Some export wholesalers and agents have built up asystem of supplying to foreign retailers. By doing

so, they take over some market share of localwholesalers. As most of them are from theNetherlands, they are sometimes referred to asFlying Dutchmen.

Many large-sized wholesalers in the EU areinternational corporate groups that have grown byacquiring or forging alliances with other companiesin the floricultural industry. Members in a group areusually from different countries and play differentroles in the supply chain, such as agents,wholesalers, growers, traders or retailers. Eachplayer brings their own specialisations and exportmarkets to the table. Examples of large-sized

wholesalers include the Dutch Flower Group (DFG;largest flower supplier in the EU with turnover of800 million in 2008), Zrel (the Netherlands; partof Italys Ciccolella group) and Florimex (Germany).

RetailersIn the EU, flower shops or florists are the mainretail channel of floricultural products and areexpected to continue their leading position in theyears to come. Nevertheless, florists in somemarkets have started to lose their share to otherchannels, such as supermarket chains and gardencentres. This is particularly true for the UK, wheresupermarket sales of cut flowers increased from

around 2.0% of market share twenty years ago to animpressive 68% in 2008. It is estimated that 10-20%of cut flowers are sold in supermarkets in Europe.
http://www.floraholland.com/http://www.floraholland.com/http://www.floraholland.com/http://www.langard.de/http://www.langard.de/http://www.langard.de/http://www.langard.de/http://www.floraholland.com/


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In Central and Eastern European markets, mainsales channels for cut flowers are street stalls,markets and kiosks. Other retail channels in the EUinclude DIY stores, petrol stations and, increasingly,on-line florists.

Florists in the EU usually get their supply fromwholesalers while supermarkets are supplied mainlyby flower providers. Flower providers are largescale wholesalers, often with a bouquet-makingdepartment. Florists generally hold a competitiveedge against other retail channels as they offerexclusivity and creativity. They custom makeflower arrangements according to the occasion andconsumers wishes. In addition, they offer a widerrange of products, usually of higher quality and arealso more likely to accept new non-traditionalproducts. On the other hand, supermarket chainsare known for their efficient logistics operations,

which enable them to deliver a large volume ofproducts (of reasonable quality) and at acompetitive price. However, these operations arenot suitable to handle delicate flowers, which arenot mostly found at florists.

Different retail channels in the EU have differentrequirements. It has become important, especiallyfor small-sized growers and wholesalers in the EU,to specialise in serving a channel in order to stay inbusiness. In general, they can be specialised ineither large-scale production against low price orsmall-scale production for a niche market.

Due to much stiffer competition, especially inWestern European markets, new retail conceptsand brands have emerged in order to offerinnovative or differentiated value propositions forcustomers. For example, Monceau Fleurs is aFrench florist chain, aiming to combine low priceswith convenience. In addition, an increasingnumber of florists in the EU form strategicpartnerships in order to perform joint purchasingand joint marketing, including Blume in Germany.As the market becomes more mature, more newflorist retail formats are expected.

1.4 Trends and developments in

the EU floricultural market

In general, the prospects of the EU floriculturalindustry are positive. However, challenges arisefrom stiffer competition, pressure on selling priceand general increase in cost. Suppliers ability todeliver unique quality, control costs and diversityof products will determine his success on themarket. The most important trends on the EUfloricultural market are discussed below.

Cautious marketThe EU floricultural market recorded a decline in2009 when it was hit hard by the economic

recession. The drop in demand and lowerpurchasing power put significant pressure on price

in 2009 and 2010. In general, consumers are stillcautious and are asking for lower prices.

New demand drivers in the EUWhile demand for floricultural products has

stabilised in the largest markets, includingGermany, France, the UK and Sweden, growth hasbeen impressive in the past decade in Central andEastern Europe. Despite currently low consumption,the attractiveness of these markets will growfurther as consumer wealth expands and thestandard of living continues to improve. Theaverage market growth rate of Central and EasternEuropean markets is also higher than that of theWest.

Consumers demand moreTodays consumers want to express theiridentities/personalities through their choice of

consumption, and therefore, demand morepersonalised products than ever before. For thefloricultural market, there is a growing demand forexclusive and tailor-made products (e.g.arrangements and packaging).

Consumer demand is also becoming more complex.Their product requirements can be a combinationof the following factors: long shelf life, goodtexture, colour diversity, affordable prices,sustainable cultivation, organic products,convenience for taking and treating andfavourable or unique scents. From the producersperspective, meeting these requirements at the

same time can be contradictory. For example, pricepressure on growers often leads to a trade offbetween economy and sustainability.

In addition, it has been observed that thedistinction between exclusive and mass productshas become more clear, especially in WesternEurope. Traditionally, value was generated by fairquality products at a reasonable price. However,value is now generated based on either low priceor luxury.

Increased importance of fair flowersConsumers in the EU are highly knowledgeable and

concerned about the impact their consumption hason the environment and farm workers. This isespecially true of Western European markets.Consumers are aware of social issues frequentlyfound in the industry, including labour right andoccupational safety and health abuses. As a result,EU consumers have increasingly demandedsustainably cultivated products.

The concerns of sustainability issues have led to agrowing magnitude of social and environmentalcertification/accreditation systems and consumerlabels. The Netherlands, for example, incorporatedfair trade flowers in auction sales in 2008. Many

retail channels also put labels on their products tosignify sustainability, such as Fairtrade. Majorretailers also develop private labels especially for


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this purpose, such as Tesco Natures Choice byTesco, the main supermarket chain in the UK.

Online salesFlorists traditionally deliver their products to the

consumers door. However, for the past ten years,online flower shops, dedicated to flower and plantdelivery, have increased in number. Many of themoriginate from IT-based companies or online giftshops (such as Amazon.com; the U.S. largest onlineretailer), without experience in the floriculturalindustry. In addition, traditional florists have alsogone online. This includes not only individualflorists, but also retail florist networks (such asEuroflorist from Sweden and Interflora originatingin the UK), florist chains (such as Blume fromGermany and Monceau Fleurs originating in France)and supermarket chains (such as Lidl Blumenservicein Germany, Tesco in the UK in corporation with

Interflora) and non-traditional players (such as TNTpost in the Netherlands who offers onlinefloriculture sales). Market research reveals thatonline sales are expected to expand at a rapid rateand a significant number of online consumers havenever ordered flowers before.

Increased importance of direct tradeWhile auction trade of pot plants had significantlydecreased years ago, this process has just begunrecently for cut flowers. It is an ongoing trend andthe cut flowers trade is expected to increasinglysurpass flower auctions and exporting wholesalers(often from the Netherlands). Instead, trade is

done directly from the grower to the wholesaler inthe destination market, which shortens the supplychain. In fact, two developments have stimulatedthis trend: 1) the low prices in recent years, whichhave more or less forced growers/exporters to lookfor other, more profitable sales channels, and 2)the increasing transparency in the trade channel(see below). The increased importance of directtrade has led flower auctions in the EU to increasetheir competitiveness by merging (e.g. the DutchVBA and FloraHolland in 2008) or joining operations(e.g. Langard and FloraHolland in 2009).

Restructuring of trade channels

Trade channels in the EU floricultural market haveevolved significantly over the years. In particular,the increase in direct trade between growers andretailers has made the intermediary role ofwholesalers redundant. In response, many flowerand plant wholesalers need to differentiatethemselves and offer a unique value to thecustomer they serve. The situation has meant thatmany wholesalers have gone out of business or havebecome acquired, which has resulted in a decline inthe number of floricultural wholesalers/traders. Inthe Netherlands, for example, the VGB reportedthat the number of flower and plant wholesalers in

the Netherlands decreased by 20% between 2007and 2011, with the largest decline in the cut flowersector.

Another important trend over the past years is the

increase in acquisitions and strategicnetworks/alliances of players. Most large-sizedfloricultural suppliers in the EU have joinedtogether to become a larger flower group. Inaddition, flower networks and alliances in the EUare also formed vertically across the supply chain.Vertical integration enables companies tostrengthen their competitiveness and marketposition. For example, Ciccolella transformed froma local Italian floricultural producer to aninternational floricultural group, after acquiring theDutch Zurel Group (flower trader) and Leliveldgroup (supplier to large retailers).

One of the most recent examples is the acquisitionof parts of the Mavuno Network by the DutchFlower Group (April 2011). From this acquisition,the Dutch Flower Group (DFG) will strengthen itsflower supply and procurement position in Africa,especially from the Oserian farm, which is well-known for its sustainably cultivated flowers. Thisalso fits DFGs aim of establishing a strong footholdin sustainable products.

More transparency in the supply chainIn recent years, the supply chain of the floriculturalindustry has become increasingly transparent,which represents an opportunity for some and a

threat for others. The emergence of the virtualflower auction (in the Netherlands it is called KOAwhich stands for purchasing at distance) enablesbuyers to participate from a distance withouthaving to travel to the auction building. This allowsfor a much wider base of buyers to source fromgrowers or exporters they have been unable tosource from before. At the same time, this alsomeans that flower traders, especially in theNetherlands, who buy from auction and re-sell theflowers at a profit, are worse off. As informationbecomes transparent at a virtual auction, buyersare better informed of market prices and productorigin, and therefore surpass the trader or allow

them only a small margin. While Dutch exportersneed a margin of 15-20% to cover their costs, as aresult of the increased transparency theysometimes receive margins as low as 6%. Inpractice, many exporters nowadays do not knowwhich flowers they will actually export the nextday, since they do not know which distance buyingorders their customers have made in the precedingdays/weeks.


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Useful sources for further research

Agricultural and Rural Development (European Commission) -http://ec.europa.eu/agriculture-provides useful studies on the EU agricultural sector.

Association of Wholesale Trade in Horticultural Products (VGB) -http://www.vgb.nl- represents

companies in the Dutch floricultural wholesale market. They provide useful studies on the industry. Flora Culture International -http://www.floracultureinternational.com- leading International

floricultural magazine with reports on industry trends and updates.

Flower Council of Holland -http://www2.flowercouncil.org- promotes floricultural products from theNetherlands. They provide market research on the EU floricultural industry.

Hortinews -http://www.hortinews.com- (Dutch) news portal for the floricultural industry.

International Association of Horticultural Producers (AIPH) -http://www.aiph.org- association ofhorticultural producers from all over the World.

Prof news -http://www.profnews.nl- (Dutch) professional news portal for many industries, includingthe floricultural industry.

2 Swedish market for floricultural products2.1 Consumption

Like the other Scandinavian countries, Sweden isconsidered a mature market. This means that theper capita spending on floricultural products isrelatively high and that the market is relativelystable. In addition, consumers in mature marketstend to spend a relatively high share of flowerexpenditure on personal use. For cut flowers,Sweden can be considered a small to medium-sizedmarket in the EU, accounting for approximately

1.5-2% of the total EU market. For pot plants,Sweden accounts for 3-5% of total EU demand,making the country a medium-sized market in theEU, ranking seventh after the big five countriesGermany, France, UK, Italy and Spain, and theNetherlands.

Market sizeSince there are no detailed market data available,apparent demand needs to be deduced fromimports, local production, imports and exports.Import statistics are available; they are discussed inChapter 4. The main conclusion that can be drawnfrom these statistics: as a result of the decline in

imports since 2008, the import value in 2009reached the 2005 value again.

Floricultural production in Sweden is relativelysmall and shows a declining trend. As a result ofthe cold climate in Sweden, the country is not verysuitable for floricultural production; it must bedone in greenhouses. Clearly, Swedish localproduction has lost competition from foreignsupplies; local production has continued to declinein the last decade. Nowadays, virtually the onlylocal cut flower production is of tulips (about 30-40 million; grown from Dutch bulbs). This mainlytakes place in the form of contract production forSwedish retailers. Swedish retailers use the tulipsas traffic builders, and therefore the contractprices are relatively low.

Pot plant production comprises both production forindoor and outdoor use. In the first category, themost cultivated plant is Pelargonium (Geranium),followed by Kalanchoe at a distance, EuphorbiaPulcherrim (Poinsettia) and Dendranthema(Chrysanthemum). Smaller volumes of Aster,Begonia, Petunia, followed by some 5-10 morespecies are cultivated. In the outdoor category, themain cultivated plants are Violas (Pansy),accounting for 40% of the total number of plantscultivated. Petunia, Lobelia and Tagetes are insecond, third and fourth position (each about 10%).The total cultivation area for pot plants, includingyoung plant material, is approximately 130 ha. Itshould be noted that most of the young plantmaterial used for pot plant production is importedfrom the Netherlands and Denmark.

Although it is a very rough estimation, the localproduction value of cut flowers can be estimated at25-30 million. For pot plants, production outputcan be estimated at 60 million (40-50 millionplants). There are virtually no exports offloricultural products to other countries.

Based on the above mentioned data, and assumingthat sales margins are in the range of 30-40% forwholesalers and about 130% for retailers, a marketvalue of about 700-800 million can be calculatedfor 2009. About 30% of that value is for cut flowersand 70% is for pot plants. From 2005 onwards, themarket first experienced growth in 2006 beforedeclining in 2007. Growth returned in 2008, while2009 showed a drop again as a result of theinfluence of the economic crisis on consumerspending. With this development, the market valuein 2009 was more or less back at the level of 2005.However, in terms of numbers of flowers and potplants sold, the market seems to show a slightly

declining trend.
http://ec.europa.eu/agriculturehttp://ec.europa.eu/agriculturehttp://ec.europa.eu/agriculturehttp://www.vgb.nl/http://www.vgb.nl/http://www.vgb.nl/http://www.floracultureinternational.com/http://www.floracultureinternational.com/http://www.floracultureinternational.com/http://www2.flowercouncil.org/http://www2.flowercouncil.org/http://www2.flowercouncil.org/http://www.hortinews.com/http://www.hortinews.com/http://www.hortinews.com/http://www.aiph.org/http://www.aiph.org/http://www.aiph.org/http://www.profnews.nl/http://www.profnews.nl/http://www.profnews.nl/http://www.profnews.nl/http://www.aiph.org/http://www.hortinews.com/http://www2.flowercouncil.org/http://www.floracultureinternational.com/http://www.vgb.nl/http://ec.europa.eu/agriculture


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2010 and beyondAlthough overall market development in 2010 is notknown so far, it can be concluded that 2010 salesremained at least stable, but probably recorded asmall growth in the range of 1-3%. For example, it

is already known that the imports of cut flowersand pot plants from the Netherlands increased in2010.

Forecasts for 2011 and the years after are difficultto make. This is because two variables are ratherunpredictable: first, the exchange rate of theSwedish Koruna against the and USD, and, second,the weather circumstances in Sweden. If assumingthat the forecast of the Economic Intelligence Unit(EIU) considering the exchange rate of the SwedishKoruna (Swedish Koruna is getting stronger in thecoming years) is reliable and that weathercircumstances in Sweden remain relatively

favourable for flowers in Sweden, the market willmost probably show growth in the coming years.

Cut flowersThe cut flower market in Sweden is dominated byroses, accounting for some 30% of total cut flowersales each year (in value). Tulips follow at adistance with approximately 20% market share. Theother half of the market consists of the sales ofLilium and Chrysanthemum (about 5-7% marketshare), Gladiolus, Dianthus and Gerbera (4-6%),Orchids (1.4%) and several other species likeFreesia, Anemone, Ranunculus and Alstroemeria.

Pot plantsThe Swedish like flowering plants the most. Thiscan be seen clearly from import statistics. In termsof imports, the most popular pot plants in Swedenare Orchids by far. Orchids are sold the whole yearround. The same goes for the following popular potplants (in range of popularity): Rosa, Kalanchoe,Dendranthema, Spathiphyllum, Anthurium,Saintpaulia and Guzmania.

Pot plants that are only popular during a certainpart of the year are the following: CyclamenPersicum and Azalea, (October-February), Muscari(December-March), Hyacinthus (November-March),Primula (December-April), Narcissus (January-

March), Dianthus (April-May), Helianthus(May- August), Lilium (April-August), Hippeastrum(October-December), Euphorbia Pulcherrim orPoinsettia (November-December, related toChristmas), Begonia (February-August), Gerbera(March-June), Zantedeschia (April-June), Celosia(May-August) and Tillandsia (August-October).

The most popular imported foliage plants are Ficusand Dracaena. With the exception of the periodbefore Christmas, these foliage plants are the mostimported plants throughout the year. They arefollowed by Cacti; the most popular cacti areHaworthia and Crassula, and Echeveria (peak in

November). Other foliage plants that are in gooddemand are Zamioculcas, Hedera, Calathea,Dieffenbachia and Peperomia.It should be noted that because of the climate inSweden (cold winters), tropical plants, such asOrchids, are kept indoors.

In addition to the above mentioned pot plants, oneshould not forget the main locally cultivated potplant: Pelargonium. Like in many other EUcountries, this is a very popular outdoor beddingplant

Market segmentation

The Swedish market can be segmented in severalways. For example, the reason for purchasing canbe used. As stated before, consumers in maturemarkets, and thus also Swedish consumers, tend tospend a relatively high share of expenditure onpersonal use. This can be seen from the statistics:approximately one third of cut flower purchases arefor personal use, for pot plants this share is almost75%. Other reasons for purchasing can be gifts orfunerals, for example. Gifts, in turn, can be furtherdivided into, for example, birthdays, visits, andspecial celebration days.

Another relevant market segmentation is the type

of trade channels used by customers. Althoughseveral sources present different figures, it can beestimated that florists account for about 40% oftotal sales value of cut flowers, followed bysupermarkets (30-35%) and garden retail centres(10-15%). For pot plants, the information is slightlydifferent: garden retail centres account for aboutone third of total sales, followed by supermarkets(one quarter) and florists (15-20%). As compared toother EU countries, the position of florists in cutflower markets is relatively strong.


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Main celebration daysThe main days of celebration in Sweden that causepeaks in the sales of floricultural products are thefollowing:

Mothers day, each year celebrated on thelast Sunday of May. Bouquets, especially ofpink roses but also of other flowers andcolours, experience a peak in sales in theweeks before Mothers day. Pot roses,mainly pink, are also in high demand. Atypical Mothers Day gift is to receiveflowers with breakfast in bed, whilechurchyards are often ablaze with colourfrom bunches of flowers placed on thegraves of mothers in loving memory. Apopular item used for Mothers day is theso-called hanging basket, mostly filledwith annual garden and bedding-plants.

Students Day. On this day, one weekafter Mothers Day, students know if theywill graduate or not and get flowers asgifts.

Easter. Yellow is the main colour offlowers sold in the period before Easter.Most bunches of Narcissus are sold in thisparticular period. In the pot plant market,there is a peak in the sales ofarrangements and bulbs in pot, often withattached Easter decorations.

Midsummer Eve. Midsummer is a verypopular festival in Scandinavia. Midsummeris the longest day of the year (June 21)and in Sweden it is actually celebrated asa national holiday. The most popularflowers for the Midsummer festival arewhite, red or blue and especially whiteChrysanthemum.

Christmas. In November and December,there is a peak in sales of the pot plantEuphorbia Pulcherrim and also ofarrangements and bulbs in pot, many ofthem equipped with Christmas

decorations. Valentines Day. In particular, roses, but

also other flowers see an increase in salesin the week of Valentine. An estimatednumber of 2 million roses are sold onValentines Day every year.

The following days in November are also a reasonfor Swedes to buy floricultural products:

Fathersday. Bouquets in autumn coloursare the most popular (orange, forexample).

All Saints Day. In Sweden, it is customaryto place flowers on graves on All Saints

Day.

Below is an overview of the annual search volumeindex for the keyword blommor, which is theSwedish word for flowers. The figure shows severalpeaks, from the left to the right these are the peakof Valentines Day, the long peak caused byMothers Day and Easter, and also a clear peak forMidsummer Eve. The peak at the right is related tothe Christmas period. In addition, the newsreference volume shows that news items peak inthe Valentines period, two months before the peakof Mothers Day and Easter, and around MidsummerEve.

Figure 2.1 Search volume index and news reference volume by Google trends for the keyword blommor, 2010

Source: Google trends (2011)


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Other market characteristics One pot plant experienced a large decline

in popularity in the last decade: Begonia.

The main food retail chain for floriculturalproducts is ICA with the Coop lagging

behind. The main garden centre chains are

Plantagen, Blomsterlandet and Bo Grnt.

The weekly peak in sales is on Friday,followed by days at the weekend.

Mixed bouquets account for almost 50% ofall cut flower sales, followed by monobouquets (about 30%). Arrangementsaccount for 16-18% and single cut flowersfor an estimated 5% of sales.

Flowering plants account for 45-50% of allpot plant sales in Sweden. They are closelyfollowed by foliage plants (40%).Arrangements account for about 8% of

sales, followed by bulbs in pot (3%).Usually, the period before Christmas seesa peak in sales of bulbs in pot andarrangements. A trend in recent years isthat supermarkets increasingly sellarrangements of several pot plants, often

in combination with a decorative pot andsome decorative items attached. Thesame, although to a lesser extent, goes forbulbs in pots.

2.2 Trade

Since local production in Sweden is small, a mainshare of the Swedish market consists of imports.Read all relevant details below.

Imports and main trade partnersSweden imports more than 90% of all floriculturalproducts from other EU countries. More than half ofthat amount is accounted for by the Netherlands;Denmark takes second place with one third of intra-EU imports of Sweden. Imports from developingcountries represent 6.5% of total floriculturalproduct imports. Kenya is the main supplier (4.3%

of total imports), followed by Colombia (1.3%),Ecuador (0.4%) and Zimbabwe (0.2%). Refer toTable 2.1 for more information.

Table 2.1 Imports by and leading suppliers of floricultural products to Sweden, 2005-2009, share in % of value in 2009

Productgroup Origin*

2005

million

2007

million

2009

millionLeading suppliers in 2009 (share in %)

Share(%)

Total Intra EU 150.0 197.0 149.0 the Netherlands (55), Denmark (30), Germany (5.2),

Belgium (1.3), Italy (1.1)

93

Developing

countries

(DCs)

10.0 11.0 10.0 Kenya (4.3), Colombia (1.3), Ecuador (0.4), Zimbabwe

(0.2), China (0.1), Thailand (0.1), Sri Lanka (0.1)

6.5

Indoor plants Intra EU 86.0 113.0 87.0 Denmark (49), the Netherlands (44), Germany (5), Belgium(1.1), Italy (0.2)

100

DCs 0.0 0.0 0.1 Sri Lanka (0.1) 0.1

Other cutflowers

Intra EU 29.0 37.0 27.0 the Netherlands (94), Italy (1.9), Denmark (1.5), the UK(0.5), Belgium (0.3)

99

DCs 0.4 0.5 0.4 Colombia (0.6), Ecuador (0.5), Zimbabwe (0.1), SouthAfrica (0.1)

1.3

Cut flowers -Rosa

Intra EU 13.0 19.0 12.0 the Netherlands (58), Germany (2.2), Denmark (0.9) 61

DCs 7.2 7.9 7.7 Kenya (35), Ecuador (2.4), Colombia (1.1), Zimbabwe (1),Ethiopia (0.2), India (0.1)

39

Young plantmaterial

Intra EU 12.0 17.0 15.0 the Netherlands (42), Denmark (35), Germany (13),Belgium (3.9), the UK (1.6)

98

Extra EU excl.DCs

0.2 0.4 0.2 Israel (0.4), Singapore (0.3), Norway (0.2), USA (0.2) 1.2

DCs 1.1 1.0 0.2 Kenya (0.5), Costa Rica (0.3), Mexico (0.2), Thailand (0.2) 1.2

Outdoor plants Intra EU 11.0 14.0 13.0 the Netherlands (44), Denmark (22), Germany (20),Belgium (7.7), Poland (4)

99

Extra EU excl.DCs

0.2 0.2 0.1 Norway (0.9), USA (0.1) 1

DCs 0.0 0.0 0.0 - 0

Foliage Intra EU 5.0 4.9 4.7 the Netherlands (30), Denmark (22), Germany (18), Italy(18), Poland (4.1)

92

Extra EU excl.DCs

0.1 0.1 0.1 USA (1.2), Norway (0.1) 1.2

DCs 0.4 0.4 0.3 China (4.4), El Salvador (0.9), India (0.5), South Africa(0.5), Turkey (0.3), Costa Rica (0.2)

6.7


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Productgroup Origin*

2005

million

2007

million

2009

millionLeading suppliers in 2009 (share in %)

Share(%)

Cut flowers -Chrysanthemum

Intra EU 3.5 5.7 3.7 the Netherlands (98), Germany (1.5) 99

DCs 0.0 0.0 0.0 Colombia (0.7) 0.7

Cut flowers -Dianthus

Intra EU 0.8 0.8 0.9 the Netherlands (32), Germany (2.2), Denmark (0.4), Italy(0.1)

34

DCs 1.8 1.8 1.7 Colombia (65), Ecuador (0.9) 66

Cut flowers -Orchids

Intra EU 0.5 0.8 0.5 the Netherlands (65), Denmark (20) 85

DCs 0.1 0.2 0.1 Thailand (15) 15

Cut flowers -

Gladiolus

Intra EU 0.5 0.7 0.4 the Netherlands (100), Italy (0.1) 100

DCs 0.0 0.0 0.0 - 0

Source: Eurostat (2011)

*For only a few groups there are imports from other extra-EU countries than developing countries.

The Netherlands plays an importantrole in the international trade offloricultural products: the main bulkof floricultural products from ex-EUcountries are directed to theirdestination market (no matter wherein the world) via the Netherlands.As can be seen from Table 2.1, theNetherlands accounts for 55% of totalSwedish imports of floriculturalproducts. For cut flowers alone, onecan calculate a share of even 78%.A certain amount of this trade flowincludes flowers from developingcountries; these are flowers that aretransported to the Netherlands, soldthrough a Dutch auction and thentransported to and sold in Sweden.The main question that arises now ishow much of the cut flower importsto Sweden come from developingcountries? This share is likely to be40-60%. Read the textbox below foran explanation

How much of the cut flower imports toSweden originate from developingcountries?

Based on the information of Table 4.1, it ispossible to calculate that 18% of all Swedish cutflower imports come from developing countriesdirectly. This is the first step.

The second step is to calculate and estimate theshare of flowers from developing countries thatreach Sweden through the Netherlands. Of allDutch cut flower imports in 2010, some 66% came from developing countries.With the assumption that the same percentage of all Dutch cut flower exportsto Sweden is from developing countries, a figure for the share of 70% can be

calculated. However, the Netherlands itself is a foremost production country ofcut flowers and Dutch exports of flowers to Sweden will also consist of a majorshare of locally produced flowers. For example, all flowers used for the RoyalWedding in Sweden (2010) were from Dutch produce. This means that theshare of flowers from developing countries in Swedish imports is less than thatcalculated share of 70%, but, at the same time, also more than 18%.

More details can be found when looking at the trade flows of the several typesof cut flowers (such as rosa, orchids, etc.). Roses are particularly interesting tofocus on, since most of the flowers from developing countries are roses. Dutchimports of roses consist of virtually 100% roses from developing countries.Although roses are still produced in the Netherlands (especially red and whiteones), it can be assumed that most of the roses exported to Sweden originatefrom developing countries. Roughly, this would almost double the developingcountries share of Swedish flower imports from 18% to 36%.

With this information, it is possible to make the assumption that the share ofimports from developing countries in Swedish imports is somewhere between36% and 70%, but likely somewhere between 40% and 60%.

Imports from developing countriesIn particular, dianthuses are imported a lot fromdeveloping countries directly. As a roughestimation, every 2 out of 3 stems come directlyfrom developing countries. Colombia is theforemost supplier (98% of all dianthus imports fromdeveloping countries), with the balance left forEcuador. Roses are also imported a lot fromdeveloping countries directly. Roughly, every 2 out

of 5 rose stems are directly imported fromdeveloping countries. Kenya is the main supplier,representing almost 90% of all imports from

developing countries. The main part of the balanceis left for the main flower countries from LatinAmerica: Ecuador and Colombia.

The third species grown in developing countries anddirectly exported to Sweden is orchids. In fact, it isonly Thailand that plays a role here. It accounts for15% of total Swedish imports of orchids. Foliage isalso imported from developing countries directly

(6.7% of total imports); most of it comes fromChina, followed at a considerable distance by ElSalvador and a few other countries. The last


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category in which developing countries play somerole is other cut flowers (1.3% of imports comefrom developing countries). The main suppliers inthis category are Colombia and Ecuador.

When looking at the position and growth ofdeveloping countries, who are the main suppliers, itbecomes clear that the two largest developingcountry suppliers (Kenya and Colombia) haveconsolidated their position as leading developingcountry suppliers to Sweden. Their floricultural

products exports to Sweden continued to increasein the period 2005-2009, while exports from manyother developing country suppliers experienced adecrease (Ethiopia, South Africa, El Salvador,Zimbabwe, Ecuador and Thailand). Only China

(mainly foliage) and Sri Lanka (mainly indoorplants) experienced a higher growth in theirexports to Sweden than Kenya and Colombia. Referto Figure 2.2 for more information.

Figure 2.2 Size, growth and share of top 9 developing country suppliers of flowers to Sweden,2005-2009

Source: Eurostat (2011)

2010 and beyondSwedish imports of cut flowers and pot plantsrecovered in 2010 and 2011. Although all details arenot available yet, this can be concluded from theinformation from experts and from some statisticalinformation from the Dutch Flower Council. This

information confirms that Dutch cut flower and potplant exports grew by 9% and 17% respectively in2010. In the first two months of 2011, Dutch exportgrowth even reached +30% and +45% respectively,compared to the first two months of the previousyear.

2.3 Trade structure

The best opportunity for companies in developingcountries is in the Swedish cut flower market, asopportunities in the pot plant market are limited.In addition, there are some opportunities for young

plant material; however, for these products EUcountries other than Sweden are more attractive.

Exporting cut flowers to Sweden can be done inseveral ways. In fact, it is not possible to advise onone best channel for the Swedish market. What is

extremely important is that exporters should makea distinct choice between direct sales and auctiontrade.

Cut flowersThere are several opportunities for developingcountry growers/exporters to supply cut flowers tothe Swedish market. Figure 2.3 shows allpossibilities. It should be noted that virtually allflowers are repacked in Sweden or beforehand inthe Netherlands. This means that export packagingshould only protect the flowers against transportdamage; it is not used for the presentation of theflowers in the store.


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Figure 2.3 Main trade channels for cut flowers to the Swedish market

Source: Facts Figures Future (2011)

As Figure 2.3 shows, flowers can go through theauctions or bypass the auctions (direct trade).Although the auctions have lost market share to thedirect trade channel in the past years, they are stillthe main trade channel through which flowersreach flower providers and traditional wholesalers.So far, most direct trade concerns cut flowers andfoliage sold through supermarkets. As a roughestimate, supermarkets sell 30-40% of all cutflowers. It should be noted that the shop-in-shopconcept is often applied in Sweden. This meansthat the shop is not part of the supermarket, but itis run by independent companies, often specialisedflower distributors.

Young plant materialThe leading players in the Swedish young plantmaterial market are mainly Europeanbreeders/propagators and young plant traders,mostly from the Netherlands, Denmark andGermany. Examples are Gasa(http://www.gasagroup.com), Florensis(http://www.florensis.nl)and Fleischle(http://www.fleischle.de). While Dutch traders are

the overall number one on this market, thesegment for tropical young plant material isdominated by Gasa from Denmark. Gasa imports itsyoung plant material mainly from Central Americaas well as from China, Taiwan, Sri Lanka and othercountries. It should be noted that most of theyoung plant material sourced in developingcountries is produced on behalf of EUbreeders/propagators through licensed productionor joint ventures. Independent young plant materialproducers from developing countries haveopportunities by supplying to an importer or bydirect sales to growers in Sweden.

Pot plantsThe main distinction between trade channels forpot plants and trade channels for flowers is that

pot plants from developing countries do not godirectly to auctions. Instead, most of the pot plantsgo to importers, who are actually wholesalenurseries. They acclimatise the pot plants for acertain period of time before selling them throughauction or to other wholesalers. As with flowers,Dutch auctions play a main role in EU trade of potplants. Pot plants produced in the Netherlands(which is also the leading producing country in theEU, accounting for two-fifths of EU production) andpot plants from other countries are mainly soldthrough Dutch auctions. The main suppliers of potplants to the Swedish market are the Danishwholesalers Bog Madsen and Gasa. Their maincustomers in Sweden are supermarkets, gardencentres and florists. The market for pot plants isequally divided between these three segments,accounting for about one quarter of the marketeach. Note that the market segmentation issomewhat different: garden retail centres accountfor about one third of total sales, followed bysupermarkets (one quarter) and florists (15-20%).This is mainly because garden retail centres sourcea large amount of pot plants locally.

Interesting playersSweden is home to approximately 50 wholesalers,most of them trade in pot plants, whereas only alimited number of them (5-10) trade in cut flowers.Most wholesalers are relatively small and work on alocal or regional basis. Twenty of them sourceworldwide; however, most of them buy from Dutchand Danish companies, like Hilverda de Boer andGasa Group. Only 5-10 of them are independentwholesalers importing directly from developingcountries. Sweden is also home to a few physicalmarket places where Danish and Dutch exportersand Swedish importers and wholesalers sell

floricultural products to small, local wholesalers,florists and retailers. The largest one in Oxie(Malmo) is good for more than half of the

Consumers

Agent

(Developing countries) grower/exporter

Flower provider

F lower fl ow: see general retail .

Dutch exporter/ Swedish Importer and/or wholesaler

F lower f low: small and medium-sized quantiti es of bul k and exclusive

flowers.

(Dutch) Auction

Supermarkets (Coop, ICA and Axfood)

Type of consumption : own use, impul se consumers

F lower flow: large quantit ies of bulk f lowers, especiall y traditional f lowers: small -

budded Rosa, standard vari eties of chr ysanthemum, dianthus. Al so ready-made

bunches of fl owers.

Florist (Interflora and independent shops)

Type of consumpti on: special occasions, gif ts

F lower fl ow: small quantiti es of wide range of

high-quali ty mainstream and exclusive

fl owers such as lar e-budded roses.
http://www.gasagroup.com/http://www.gasagroup.com/http://www.gasagroup.com/http://www.florensis.nl/http://www.florensis.nl/http://www.florensis.nl/http://www.fleischle.de/http://www.fleischle.de/http://www.fleischle.de/http://www.fleischle.de/http://www.florensis.nl/http://www.gasagroup.com/


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floricultural products trade in Sweden; two othersare in Goteborg and Stockholm.

Virtually all interesting players in the trade offloricultural products for the Swedish market are

listed below, per category.

Flower providersBloom Flowershttp:/www.bloom-flowers.nl-

flower provider of ICA. Bloom is part of theMavuno Network (http://www.mavuno.com)andhas recently become part of the Dutch FlowerGroup.

Saba Blommor -http://www.saba.se- flowerprovider for Axfood and Coop. Subsidiary of DoleFood Company.

S-Blommor -http://www.s-blommor.se-flowerprovider.

Dutch exporters of flowersBarnhoorn -http://www.barnhoorn.nl- Dutch

exporter of flowers.Hilverda De Boer -http://www.hilverdadeboer.nl

- Dutch exporter of flowers and one of themarket leaders in Scandinavia. Supplies towholesalers in Sweden.

Martin Bakker Bloemenexport -http://www.martinbakkerbloemenexport.nl-Dutch exporter of flowers.

Nieuwkoop Flowers -http://www.tnieuwkoopflowers.nl- Dutchexporter of flowers.

Verdel Bloemenexport- http://www.verdel-

bloemenexport.nl- Dutch exporter of flowers.This company also sells fair-trade roses (linked toAG Blommor), albeit not very many.

Importers and/or wholesalers of flowersAPH -http://www.aph.se- traditional wholesaler

and importer of cut flowers, the largest one inSweden with more than 50% market share. APHimports directly from developing countries andsells to wholesalers, florists and also to Coop.Owner of the brand best out of Africa forroses,APH also runs two Cash & Carrys (wholesalemarkets). APH is also an important player forfair-trade roses in Sweden.

De Tulp -http://www.detulp.se- importer andwholesaler of cut flowers, second largest. Alsosales of fair-trade roses.

AG Blommor -http://www.agblommor.se-importer and wholesaler of cut flowers, thirdlargest. Also sales of fair-trade roses.

Gustafssons -http://www.gustafsblom.se-importer and wholesaler.

Hukra -http://hukra.nl- importer andwholesaler of cut flowers, owned by the floristorganisation Interflora.

Lambes Blomservice -http://www.lambes.se-importer and wholesaler of cut flowers.

Pot plant tradersThe pot plant trade to Sweden is dominated by twocompanies.

Gasa Group -http://www.gasagroup.com-Danish company, market leader in Scandinaviafor pot plants and young plant material,supplying to Swedish wholesalers. Gasa is also thepot plant provider of ICA.

Noviflora -http://www.noviflora.nl- Dutchexporter of pot plants and market leader inSweden together with Gasa, supplies to Swedishwholesalers.

Note that there are also several local pot plantwholesalers in Sweden; however, they buy fromGasa and Noviflora, or from local producers.

FloristsBuketten -http://www.buketten.se- small

florist chain with its own purchasing departmentand direct sourcing from countries such asEcuador and Kenya.

EuroFlorist Sverige AB -

http://www.euroflorist.se- retail association offlorists. The sourcing and assortment decision ofthe associated florists occurs individually.

Interflora -http://www.interflora.se- retailassociation of florists, also includes the conceptsof Blommogram and Teleflora. The sourcing andassortment decision of the associated floristshappens individually or in small cooperativegroups.

Main opportunities for developing countryexporters

FlowersThere are several possibilities for supplying flowersto the Swedish market. To some extent, the bestopportunity depends on the type of product. Somemain questions to be considered are: are theflowers exclusive or of bulk type, is the volumesmall or large? Even then, several opportunitiesremain, not just one. Refer to Figure 2.3 for ageneral overview of all possibilities.

Young plant materialEU breeders/propagators play a key role in EUtrade of young plant material. Since they regularlymake use of relationships with developing country

producers in the form of licensing production orjoint ventures, this could be an opportunity forproducers from developing countries. Of course,producers from developing countries can also try tosell license-free young plant material although,generally speaking, market volumes for license-freematerial are limited, compared to licensedmaterial. However, compared to cut flowers,opportunities for young plant material are limited.

Pot plantsIt is difficult to supply (finished) pot plants to theEU and the Swedish market. Transportation costsare generally high and competition from EU growers

is strong. In fact, there are only limitedopportunities for developing country exporters ofplants that can be transported in sea containers.
http://www.bloom-flowers.nl/http://www.bloom-flowers.nl/http://www.bloom-flowers.nl/http://www.mavuno.com/http://www.mavuno.com/http://www.mavuno.com/http://www.saba.se/http://www.saba.se/http://www.saba.se/http://www.s-blommor.se/http://www.s-blommor.se/http://www.s-blommor.se/http://www.barnhoorn.nl/http://www.barnhoorn.nl/http://www.barnhoorn.nl/http://www.hilverdadeboer.nl/http://www.hilverdadeboer.nl/http://www.hilverdadeboer.nl/http://www.martinbakkerbloemenexport.nl/http://www.martinbakkerbloemenexport.nl/http://www.tnieuwkoopflowers.nl/http://www.tnieuwkoopflowers.nl/http://-%20http/www.verdel-bloemenexport.nlhttp://-%20http/www.verdel-bloemenexport.nlhttp://-%20http/www.verdel-bloemenexport.nlhttp://-%20http/www.verdel-bloemenexport.nlhttp://www.aph.se/http://www.aph.se/http://www.aph.se/http://www.detulp.se/http://www.detulp.se/http://www.detulp.se/http://www.agblommor.se/http://www.agblommor.se/http://www.agblommor.se/http://www.gustafsblom.se/http://www.gustafsblom.se/http://www.gustafsblom.se/http://hukra.nl/http://hukra.nl/http://hukra.nl/http://www.lambes.se/http://www.lambes.se/http://www.lambes.se/http://www.gasagroup.com/http://www.gasagroup.com/http://www.gasagroup.com/http://www.noviflora.nl/http://www.noviflora.nl/http://www.noviflora.nl/http://www.buketten.se/http://www.buketten.se/http://www.buketten.se/http://www.euroflorist.se/http://www.euroflorist.se/http://www.interflora.se/http://www.interflora.se/http://www.interflora.se/http://www.interflora.se/http://www.euroflorist.se/http://www.buketten.se/http://www.noviflora.nl/http://www.gasagroup.com/http://www.lambes.se/http://hukra.nl/http://www.gustafsblom.se/http://www.agblommor.se/http://www.detulp.se/http://www.aph.se/http://-%20http/www.verdel-bloemenexport.nlhttp://-%20http/www.verdel-bloemenexport.nlhttp://www.tnieuwkoopflowers.nl/http://www.martinbakkerbloemenexport.nl/http://www.hilverdadeboer.nl/http://www.barnhoorn.nl/http://www.s-blommor.se/http://www.saba.se/http://www.mavuno.com/http://www.bloom-flowers.nl/


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They can be sold to EU growers (directly orindirectly) who in turn can finish the cut plants in alimited period of time. Sweden, however, is notinteresting in that respect since it is only a verysmall production country of pot plants; the main

production country in the EU is the Netherlands.

2.4 Trends

When planning your export to Sweden, suppliers offloricultural products in developing countriesshould take recent trends into account anddevelopments on the Swedish market. This chaptersummarises key trends relevant to developingcountry exporters.

Market is waiting for recoveryThe global economic recession has had a negativeimpact on the value of Swedens floriculturalimports. In 2009, the value dropped to around159.3 million, which was even lower than the 2005level. Recovery is expected to be at a slow rate.The first indications for the overall marketdevelopment in 2010 are positive, mainly due tothe stronger Swedish Krona compared to 2009. Onthe other hand, the very low temperatures inwinter had a negative effect on sales. Although it istoo early to draw a final conclusion on the marketdevelopment in 2010, a small growth in the rangeof 1-3% is expected.

Consumers become more price-consciousLike elsewhere in the EU, Swedish consumers have

reduced their expenditure on floricultural productsand have become more cautious about purchasingflowers. The unfavourable exchange rate hasresulted in rising prices, which has further reduceddemand. Since 2008, it appears that consumershave been buying cheaper varieties and importerslower volumes. Flower varieties in the uppermarket have faced the most difficult challenges.Increased price sensitivity among Swedishconsumers has significantly affected the sales ofsustainably cultivated products, such as Fairtraderoses, which are sold at a higher price.

Development in consumption patterns

Demand for certain flower varieties depends on theoccasion. For instance, Swedes like to decoratetheir homes with poinsettias, amaryllis andhyacinths during Christmas. Moreover, preferredcolour and type of flowers/plants also depends onwhat is in fashion at the time. Orchids sold as cutflowers, for instance, used to be a popular cutflower in Sweden more than ten years ago, buthave become less fashionable today. Instead,orchids sold as potted plants are gaining moreappeal. Some organisations and websites in Swedenthat provide inspiration and tips on trends andideas for home or garden decoration through theuse of flowers and plants include:

Blomster Frmjandet (Flower Promotion) -http://www.blomsterframjandet.se- Swedishtrade organisation that aims to provideinformation about flowers and its management.

Tulpanguiden -http://www.tulpanguiden.se-

specifically for tulips.

The media drive floricultural demandOver the past few years, Sweden has seen animpressive increase in the popularity of home andgarden decoration, or so-called Home-styling andHome makeover, which is considered a lifestyletrend. There are new magazines, books andtelevision programmes dedicated to this. Cutflowers and pot plants are regarded as homedecorative items and are therefore part of thistrend.

Social and environmental labels have

gained importanceThe concept of green and sustainability is veryimportant in Sweden, including the floriculturalmarket. Swedish consumers do not only demand agreater variety of floricultural products, but theyare also increasingly interested in theenvironmental and social dimensions of how theyare produced. Since 2007, the presence ofsustainability labels, such as FFP and Fairtrade, hasincreased significantly. Swedish retailers are at theforefront of initiating and bringing certifiedproducts onto the market. Although Swedish greenconsciousness presents an opportunity forsustainably cultivated products, demand has

recently declined due to the economic recession.The speed of recovery will depend on how fastconsumers restoreconfidence, become lessprice-sensitive and arewilling to spend more onfair products again.

More direct tradeAn increasing number offloricultural imports toSweden are bypassingauctions. This is becauseseveral Swedish importers

and wholesalers havestarted to trade directlywith growers/exporters oragents. In fact, two developments have stimulatedthis trend:1) the low prices in recent years, which have moreor less forced growers/ exporters to look for other,more profitable sales channels, and2) the increasing transparency in the trade channel(refer to Chapter 2 for more information). Oneexample of a Swedish importer who has increaseddirect sourcing is APH.
http://www.blomsterframjandet.se/http://www.blomsterframjandet.se/http://www.tulpanguiden.se/http://www.tulpanguiden.se/http://www.tulpanguiden.se/http://www.tulpanguiden.se/http://www.blomsterframjandet.se/


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2.5 Market access requirements

The export of floricultural products into the EU issubject to certain legislations required by EUgovernments, and increasingly, the non-legislative

requirements of trading partners. This chapterdiscusses important market access requirements.

Legislative requirementsFlowers, plants and fresh fruits and vegetablesimported into the EU must meet phytosanitarylegislation. The EU has based its phytosanitarymeasures on international standards developedunder the IPPC framework. A phytosanitarycertificate is issued to indicate that the importedproducts meet phytosanitary import requirementsspecified by the EU. The inspection and issuance ofsuch a certificate is carried out by the NationalPlant Protection Organisation (NPPO) in the export

country. The list of NPPOs is available on thewebsite (http://www.ippc.int;click on Countriesand Description of the NPPO).

Industry requirementsIt is estimated thatat least half of theflowers imported tothe EU adhere toone or more socialand environmentalstandards. Swedishconsumers areknown for their

green behaviourand are stronglyconscious of theimpact theirconsumption has onsociety and theenvironment.Increasingly, products carrying sustainability and

organic labels are a preferred choice in manyproduct categories. In Sweden, the SwedishFloricultural trade Association (BRO) played a keyrole in introducing the Fair Flowers Fair Plants labelin 2007 and sustainability has become animportant theme of floricultural trade exhibitions.

There are many social and environmental standardsin the global flower industry; the most importantones in the Swedish market are discussed below.

Fair Flowers Fair Plants (FFP)FFP is a consumer label in the floricultural marketwhich is gaining increasing importance in the EU.Flowers and plants bearing this sustainability labelcome from growers whose production processescomply with FFPs environmental and socialrequirements. FFPs social requirements are basedon the ILO conventions. Growers are inspected byindependent accredited inspectors, with observersfrom trade unions and NGOs. FFP products are sold

by affiliated FFP traders and retailers, and thuscover the whole supply chain.

FFP initially targeted the florist channel, but hasbecome widely adopted by supermarkets andgarden centre chains; including Coop in Sweden.According to FFP, as of October 2010, Sweden

ranked second in the world in terms of the numberof florists that have adopted the label. There were1,567 such retailers in Sweden, which is fewer thanGermany (2,135), but much higher than France (72)and the Netherlands (63). All flower shops inSweden belonging to either EuroFlorist orInterflora/Blommogram sell FFP certified flowersand plants. Despite the large adoption of the FFPlabel in Sweden, consumer awareness of FFP isbelieved to be lower than that of the Fairtradelabel, which also covers many other productcategories such as coffee, tea and cotton.

Fairtrade

The Fairtrade standards and certification cover 20product groups and is represented in Sweden byFair Trade Sweden. Fairtrades social requirementsinclude adherence to ILO agreements and theUnited Nations charter of human rights. The

Fairtrade certification system aims toimprove farm workers low wages and poorworking conditions (e.g. mandatory overtimeand extensive exposure to dangerouschemicals) typically found in the floriculturalindustry. As with FFP, Fairtrade certifiedgrowers are inspected by independentaccredited inspectors and products are soldby affiliated traders and retailers. 10% of the

commercial price of Fairtrade flowers is usedas Fairtrade premium for social and economicdevelopment in local grower communities.

Fairtrade flowers were first launched inSweden at the beginning of 2007 and it wasthe initiative of the countrys biggest

supermarket chains: ICA and Coop. Although it waslimited to only roses from Kenya (which is still thesame in April 2011), the start of fair trade flowersales in Sweden was quite successful. In 2008, 95%of ICAs fresh cut flowers were roses from Kenyaand between 70-80% of them carried the fair-tradelabel; Coop reported that 10% of their cut flowerssales were Fair-trade certified. The number of fair-trade certified roses sold in that year reached 13million, or 15% of the Swedish market for cut rosesin that year. However, the market for fair-traderoses experienced a sharp decline as a result of therecession. Many (shop-in-shops in) supermarketsstopped the sales of fair-trade roses and in 2010 theshare of fair-trade roses was reduced to only 5%.

In the meanwhile, fair-trade roses are no longeronly sold by ICA and Coop; they are also sold atseveral outlets of the Plantagen chain of gardenretail centres, the supermarket chain Axfood, andby the florist chains Interflora and Euroflorist.
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MPS-ECAS certificationMPS (Milieu Programma Sierteelt) certificationoriginates from the Netherlands and aims topromote sustainable production and trading offlowers and plants. ICA is an example of a Swedish

supermarket chain that sources flowers and plantsfrom MPS certified growers. MPS offers a variety ofcertificates for different aspects of sustainablecultivation. Examples are as follows:

MPS-ABC certificate verifies that the holder usesa minimum amount of energy andfertilisers/pesticides, as well as generatesminimum waste. MPS-ABC is believed to be themost adopted certification by growers indeveloping countries who trade via flowerauctions.

MPS Quality certificate verifies that the holderprovides reliable product information and safe

produce.

MPS Socially Qualified certificate providesassurance that the certified growers cultivatetheir products under good working conditions.

flowers eu final webb

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