Management Board column: International growers and buyers strengthen the marketplace

February 23, 2022
International

In this series of columns the Royal FloraHolland Management Board and managers have their say. The world is gradually opening up after two years of COVID-19. Fred van Tol, Manager International Sales & Account Management, foresees that the production of floriculture products outside the Netherlands as well as global demand will only increase further. “This international growth is also reflected in our marketplace.”

Many of us have been living in a smaller world than in pre-COVID-19 times. Due to the COVID-19 measures and the restrictions they brought with them, we spent more time than ever in our very own environment. However, the world keeps moving on. I believe that both the production of floriculture products outside the Netherlands and global demand will only increase further, with Asia and the Middle East as important growth markets. This international growth is also reflected in our marketplace.

Floriday

As a cooperative, we have always strived for optimal pricing. In the modern digital world, this can only be achieved by creating a neutral digital platform. In our case; Floriday, which offers various ways to buy or sell products (including at auction). All growers can make themselves stand out on the platform; there are more options for exporters or international buyers. We make sure that Floriday transparently reflects which product, with which quality and sustainability certificate, is offered under which conditions. Here growers are in control. This is the best guarantee for optimal pricing.

We have seen that the share of foreign floriculture products on the marketplace has been growing for years. This started when local producers in Israel opted to sell their products on the marketplaces in the Netherlands. Subsequently, supply also increased due to the growth in production areas around the equator, such as East Africa, partly due to Dutch pioneers who recognised opportunities as a result of the favourable production conditions. Partly as a result of this, we have also seen a strong growth in the number of international buyers, resulting in an increase in KOA buying power at the auction. In order to remain an attractive, digital marketplace in the future, the connection to a broad and substantial assortment is necessary to meet the demand of buyers both at home and abroad to the maximum extent. Besides roses, Gypsophila and Waxflower, to name but two, also enrich our assortment.

Blurring of national borders

The sector is digitising at a rapid pace and the insight into what is going on around the world is growing as a result. Including with regard to the production of floriculture products. Growers increasingly trade through direct flows, while sustainability is another trend that cannot be ignored. Our international members actively respond to this. Buyers, including large retail companies, have strict requirements in this respect. Companies are consolidating on both the grower and buyer sides; companies are expanding through takeovers or collaboration. This also means that these companies need to respond to global developments, causing national borders to blur more than ever.

Production is distributed across the continents in order to remain attractive suppliers throughout the year and thus always be able to offer the most appropriate supply at the right time. Internationalisation is also reflected in the sharp increase in flows directly from the country of production to the country of destination, anywhere in the world.

The strength of the collective

With our current services, we are in a position to bind a significant part of international supply to our marketplace. Despite constraints such as pressure on transport availability, we are seeing growth in international volume traded here. Currently, 17% of floriculture products supplied to the marketplace comes from international producers. At the auction, this share is even 28%. Today, 24% of international transactions in direct flows are handled through Floriday. In order to continue connecting to the global market in the future, we are also developing new supplementary international services in the areas of ordering, payment and delivery to serve growers and their buyers in the best possible way according to their business models. Dollar payments, for example, are now an option.

I am convinced that the strength of the marketplace is determined by the strength of the collective of producers who contribute to it and use it. Our international strategy is aimed at strengthening this collective in both breadth and depth. This will lead to a higher demand and optimal prices and is fully in keeping with the reason growers founded the cooperative and started using the auction clock as a unique selling tool over one hundred years ago.

Fred van Tol
Manager International Sales & Account management

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