Flowers: Deeply Rooted in the Economy 

In the last issue of KIF we looked at the impact Valentine's Day can have on the supply chain.  Here in Florida we can see firsthand the cyclical nature of the floral industry and its impact on the entire economy, particularly around the holidays.  Cards, candy, fruit boxes and flowers are the images we associate with holidays.  But if you are involved in the supply chain, you have a very different perspective.  

According to Christine Boldt from the Association of Floral Importers of Florida (AFIF), increase in sales are seen starting February 1st, as consumers start buying gifts for their Valentines.  One of the most popular holiday commodities are flowers.  Valentine's Day flowers alone account for 12% of annual flower sales.  Since normal supply won't meet the demand, many US flower producers take use of "pinching" in November.   This prevents the roses from blooming until the demand increases in February, which allows for an unusually high harvest rate for the holiday.  However, this prevents two potential future harvests, hitting farms with a sales loss, in turn increasing prices for consumers.  

During Valentine's Day season, the US not only delays their flower harvests, but imports more than 1 billion flowers to meet the increased demands.  Growers, logistics teams, distributors, wholesalers, florists, retailers, and inspectors work overtime to cater to the demand.  US consumers spend $17.6 billion overall on Valentine's Day, an average of $1.9 billion on flowers, with over 110 million roses bought.  With high expectations from retailers, sales are expected to continue an increasing trend.  Last year, consumers spent $126.03 per person and were expected to spend 4% more this year.

Valentine's Day isn't the only holiday that deals with consumer spending, Mother's Day is right around the corner, and according to the National Retail Federation, $18.6 billion is spent on gifts for this day.  66.4% is spent on flowers, importing about 40 million stems from Columbia and Ecuador.  The amount spent per person has been increasing since 2009, despite the economic ambiguity and high fuel expenses, averaging $152 per person in 2012.  Retailers are expecting the increase to continue in 2013.

Around these holidays, more drivers are needed to deliver the extra holiday commodities.  Transportation brokers need to spend more time locating drivers, who are looking for the best paying trip.  Those working anywhere from the ports or farms to the retail stores must dedicate extra time to supply the gifts that consumers demand for these special occasions.  

Although Americans are becoming more conscientious with their spending, we continue to increase our spending to celebrate people in our lives.  This holiday season, remember your extra hours at work are appreciated by the millions of people purchasing gifts for their loved ones. 

   Michelle Elsaid

Intern, Orlando Office