Floral industry business owners who are responding to new trends in customer service and demand, and paying attention to economic shifts at the macro level, have good reason to be cautiously optimistic about the future.
That was a message Society of American Florists’ CEO Peter Moran delivered last month when he presented his biennial State of the Industry Address at SAF Maui 2016.
“There is general consensus among economists that the consumer goods sector is a healthy force in the economy today and that bodes well for the floral industry which is so dependent on consumer spending,” Moran said. “The economy has certainly come further than most people realize.”
Moran noted that the private sector has added jobs for 74 consecutive months just under 15 million new jobs, which is the longest period of sustained growth on record. Read more.
“Unemployment, which peaked at 10 percent in 2009, the highest it has been since 1983 is now at 5 percent,” he said. “The budget deficit has fallen by roughly one trillion dollars. And overall U.S. economic growth while still anemic, has significantly out-paced that of every other advanced nation.”
Still, Moran noted, many variables, and significant challenges, remain for business owners trying to forecast the future — not least among them the looming presidential election.
“There is a growing body of research that shows during presidential election years, particularly like this, when there is such uncertainty about the nation’s future, industry becomes almost paralyzed,” Moran said, pointing to national corporations such as DuPont and McDonald’s, which have cut spending in recent months. “A look at the last dozen election cycles shows that during the final year of a presidential term, big corporate investments are routinely postponed and big deals are put on the back burner.”
In his wide-ranging talk, Moran talked about geopolitical, social and technological issues affecting consumer buying decisions, along with specific changes to the national and international industry supply chain and new research on how each generation of flower purchasers makes decisions — and can be persuaded to buy flowers). (Read more about SAF’s 2016 Generations of Flowers Study.)
During the highly anticipated address, Moran also laid out some of the specific challenges for the industry and each segment. Chief among those challenges: labor issues, including minimum wage debates and new laws, and the need to stay ahead of technological innovations that relate to all aspects of the consumer experience, including ordering and delivery.
“For retailers, it is now all about the omni-channel, an industry term that means consumers can transition seamlessly between both physical and digital stores,” Moran said.
Looking specifically at the overall industry, Moran projected that in 2020 there will be:
- 10,000 to 12,000 retail florists in the U.S. (compared to about 13,700 today),
- 300 wholesale florist doors (compared to about 550-570 today), and
- 36 large domestic cut flower producers, “plus a good supply of small specialty cut flower producers supporting the local markets.”
Moran estimated there are currently 225 flower growers in California, 60 of whom have annual revenues over $500,000, along with eight to 10 large growers in Oregon and Washington and many smaller specialty growers in those states. These projections are largely unchanged from Moran’s 2012 projections.
Missed the address? Check out the PowerPoint presentation SAF members can view the video of the full talk; non-SAF members can see an excerpt of it. Look for more coverage in future issues of SAF’s Floral Management magazine.