AALSMEER, Netherlands: FloraHolland closed 2014 with a positive result. General Manager Lucas Vos commented, “After the one-off loss we had to accept in 2013, I am pleased with the positive net operating profit of €9.6 million for 2014. In fact, the result actually exceeded the expected €7 million. FloraHolland is on the right track for 2015, too.”
The product turnover increased by 1.4% to €4.5 billion, with a slight increase in both the average price and the volume of supply of flowers and plants contributing to the increase in turnover. While in general the results were positive, not all individual growers were able to profit due to differences at the product level. While the economic recovery that started in Europe in 2014 was favorable, this advantage was curbed by tensions in Eastern Europe and the Middle East. Sales in Russia in particular were disappointing as a result of the unfavorable exchange rate between the euro and the ruble. The fact that the floriculture industry was nonetheless able to grow demonstrates the continued strength of the sector.
For FloraHolland, 2014 was a year of change. In this year, the company turned loss back into profit. In addition, it was the year in which the share of direct sales – at 51% – overtook the auction sales. At 2.7%, this shift was less extreme than in previous years, however, the volumes at the clock are expected to continue to drop, which calls for action on the part of FloraHolland. 2014 was also the year in which the negative attitude of stakeholders changed to generally positive. The new strategy, FloraHolland 2020, and the manner in which it was developed in collaboration with members, customers and employees, was received well by all parties. The introduction of the new strategy was motivated by several reasons. In 2014, the members, customers and employees all indicated a need for direction and clarity on the part of the company. In a world in which electronic trade is on the rise, demand is falling and the competition is growing fast, the need for a new strategy was clear. With FloraHolland 2020, the cooperative has set a course for the future in which we will make the floriculture industry bloom; a course aimed at improving the margins for our members and their customers, and for greater consumer spending on flowers & plants.
In 2014, the direction was determined in FloraHolland 2020. In that year, the company started the implementation of the new strategy with the first five programs. Lucas Vos: “The New Style of Auctioning is the first program for which we are discussing the content with our members. How do they view the future of the clock? How can we reorganize the clock and the physical marketplace to make them future-proof? The discussions are generating a lot of valuable input and we will continue the discussion with other stakeholders, too. The aim of the program is to establish optimum and stable pricing for our members and their customers and reduce the costs of an affordable open marketplace.” The “Consumer” program is focused on promoting the demand for flowers and plants among (European) consumers. The aim is to gain better understanding of the consumer, market and competition, in order to develop new and established joint ventures, concepts and innovations. The focus is the creation of long-lasting value for the customer across the floriculture industry as a whole and for members in particular. In the ” Standards and Simplification” program, the company intends to facilitate the more efficient and effective – and therefore less expensive – functioning of the chain. Collaboration within and beyond the floriculture industry is essential in this regard. In the “World Flower Exchange” program, FloraHolland focuses on the development of a virtual platform for flowers and plants and pooling market knowledge, ideas and innovation, with the aim to achieve turnover of €1 billion in 2020. Last but not least, the intention of the “Improve Together” program is to improve the entire company and the implementation of the strategy by means of a single working method. Later this year, the roll-out of FloraHolland 2020 will continue with the launch of additional programs.