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SAF looks forward with cautious optimism

The Society of American Florists is looking forward to 2018 with cautious optimism. Anecdotally, we know from a roundtable discussion during the fall board of directors meeting that many businesses were having a stable to a very strong year.

An SAF Economic Outlook survey supports this — conducted in July among SAF members at the end of the second quarter, about half were optimistic about 2017 sales and another 14 percent were very optimistic. Couple that with the early December reports that consumer confidence is at its highest level in 17 years, while unemployment is at its lowest for the same time period, and there’s plenty to suggest that 2018 could be a strong year.

KATE-PENNKate PennNone of this takes into account the storms and fires of the last several months that have left a path of destruction in parts of Texas, Florida and California — their impact will no doubt linger well into 2018 for industry members in those markets.

But there are opportunities out there for businesses well positioned to take advantage of them. Product quality has never been better, thanks to years of research that has led to better varieties, growing practices and postharvest care. Consequently, long-lasting flowers and plants are more of the rule than the exception —and marketers who can’t at the very least provide that will get left behind.

Demand for locally grown flowers continues to increase, as does demand for specialty flowers, and the use of foliage and greens at weddings has increased significantly. SAF-commissioned research shows that millennials have a strong appreciation for flowers — and we’re seeing more and more retailers figure out how to target that market.

Freight out of South America is becoming more expensive and less reliable, and the problem was only exacerbated by the hurricanes — many predict this isn’t a passing challenge but a permanent reality of the industry, the “new normal.” Buyers will have to plan ahead in order to adjust to this —even more so if buying product sent via sea container, which is being used by more and more distributors.

This certainly opens up an opportunity for domestic growers, but they have plenty of challenges: labor is a primary challenge, due to increased minimum wages and a decreasing pool of experienced workers. Larger growers are responding with automation, to replace a workforce that simply isn’t there.

On the retail side, online purchasing is where SAF retailers are seeing the strongest gains — this is good news for retailers well positioned to capture the mobile consumers; those who are not will be playing catch-up.

Driving in-store traffic is a bigger challenge and requires a great deal of investment and ingenuity, but research indicates that millennials will flock to an “experience” — retailers who figure out how to provide that experience will come out ahead. Providing access to a DIY experience will give retailers an edge.

Outstanding customer service continues to be important to today’s buyer. More than ever, savvy retailers are figuring out how to leverage technology to streamline back-end operations — buying, inventory, logistics, marketing — so they can put more time into developing a relationship, a connection, between the customer and their brand.

For SAF’s part, we plan to help the industry leverage that technology and stay ahead of trends, and continue to build on the successful programs and services our members rely on to grow and to be profitable. We’ll continue to advocate for important issues like immigration reform and research funding, provide networking opportunities to bring the industry’s buyers and suppliers together, and develop consumer promotions such as the Petal It Forward initiative that get consumers thinking about flowers not only at holidays but year-round.

Kate Penn is the executive vice president and chief executive officer at the Society of American Florists. She can be contacted at kpenn@safnow.org.