Rabobank issued a new publication last month about developments in the ornamentals sector. The outlook is very bright indeed, provided the sector is aware of the changes in the market and the impact on production.
For example, the bank identified a rising interest in more ‘green’, both at home and at work: an opportunity for growers of house plants. Consumer behaviour is also changing rapidly. More and more consumers, particularly younger people, are buying flowers and plants online. Experts expect that online purchases will account for 30% of the market within ten years! And the prosperous economy means that people will be spending more money on flowers and plants.
So these are upbeat developments suggesting healthy prospects. But they are demanding for modern growers of ornamentals! What strikes me is that the consumer has become less predictable. The report states that ‘the same person wants to have products of different quality at different times’. In addition, consumers increasingly want sustainability.
Because of all these changes on the demand side, the bank expects three main sectors to develop in ornamentals. The first consists of the specialists in consumer experiences, in other words the physical shops. These are expected to continue, albeit in much lower numbers. They will be dealing primarily in products with added value.
The second sector will specialise in supplying the large retail channels. Here, cost price, production and continuity are vital. In response to these requirements, large growing companies or growers’ associations will emerge to deliver the large orders with a wide range.
Finally, there are the consumers who buy flowers or plants online. The online retailer uses a logistics service provider to deliver the right product to the consumer quickly and directly from the grower. The focus here is on a high number of small, customer-specific orders.
A continued role in the future as a grower will depend vitally on opting for one of the sectors, and tailoring the strategy and business organisation accordingly. That seems obvious. Obviously, an ongoing important factor will be sustainable business practices. That is equally obvious. So as a grower with an eye to the future, I would be looking for a sustainable, and above all flexible, cultivation system that allows me to adapt along the way.
In our work also, we have to make choices all the time. Flexibility has always been a priority here. The concept of our ErfGoedFloor must be able to respond to what are sometimes relatively minor changes. Only then can it be used to cultivate different types of plants. And we face new challenges regularly. As a business, you must be able to change tack quickly and effectively.
So I think it’s vital to make choices but, at the same time, flexibility doesn’t mean concessions. Developments in horticulture are certainly not standing still and they seem to be coming ever faster: you must make sure you remain flexible within your focus area.
If you are interested or have other ideas, please don’t hesitate to send me an email!
ErfGoed General Manager