Up the Supply Chain BY SARAH SAMPSON GROWING UNDER PRESSURE


> For Oscar Fernandez, director of sales at grower-importer Rio Roses-Equiflor, navigating today’s floral supply chain is no longer simply about growing flowers and filling orders. Increasingly, it requires balancing rising costs, weather volatility, economic uncertainty, changing trade policy and shifting demand while work- ing closely with partners throughout the supply chain. Those pressures are also influencing


the industry’s planting decisions. As growers scrutinize profitability more closely, many are prioritizing varieties with predictable demand, efficient pro- duction and acceptable margins. “The days of assuming stable pricing


and predictable supply are behind us,” Fernandez says. “We’re seeing more variability in costs and availability, so we need to become more collaborative and flexible.”


A Convergence of Cost Pressures Above All Flowers broker David Kaplan says many growers — particularly in Colombia — are facing a convergence of financial pressures that are hitting mar- gins simultaneously.


pesos for every export dollar they earn, further tightening margins. These combined pressures make


long-term production planning excep- tionally challenging. According to Kaplan, uncertainty itself — not just rising costs — is slowing investment and expansion decisions as growers wait to see how economic, political and trade conditions evolve.


Operational Solutions Despite these headwinds, suppliers throughout the floral supply chain say they are focused on finding operational efficiencies rather than automatically passing rising costs on to retailers. Gary Staton of Bill Doran Company


described the situation earlier this year as meaningful but manageable. “Historically, the industry has


adapted to similar changes through effi- ciency gains, operational adjustments and scale, rather than broad price hikes,” he says. Those efforts include better sales


forecasting, improving harvest-to-box efficiency, optimizing freight consoli- dation, reducing shrink and minimizing unnecessary handling.


“Because of the rising costs, new doesn’t always mean right. We’re trying to be specific in what we’re putting in the ground and sometimes your


tried-and-true products are the best.” Oscar Fernandez, Director of Sales, Rio Roses-Equiflor


In addition to ongoing freight costs


and tariff uncertainty, Colombian growers are absorbing the country’s 23.7% minimum wage increase, one of the largest in recent history. For an industry where labor accounts for roughly half or more of production costs, the increase has had significant implications for profitability and pro- duction planning. Growers are also facing currency


pressure. Flowers are sold in U.S. dollars, but wages and many operating expenses are paid in Colombian pesos. As the peso strengthens, growers receive fewer


“We’re relying much more heavily


on business intelligence than intu- ition,” Fernandez says. “In the past, you could balance data with your gut. Today, it’s simply too expensive to do that.” The company is also looking


for ways to increase the number of stems packed into each box to improve freight efficiency. While day-to-day operations and logistics remain largely unchanged, Fernandez says the company is focused on staying disciplined amid continued market volatility.


Planting Decisions Rising labor costs, currency pressures, freight expenses and ongoing economic uncertainty are forcing farms to evaluate product mix more strategically. Many growers are prioritizing varieties that offer predictable demand, efficient pro- duction and acceptable margins. For Rio Roses-Equiflor, sticking with


proven performers such as yellow, white, pink and red roses can help ensure pro- duction investments generate a return. “Because of the rising costs, new


doesn’t always mean right,” Fernandez says. “We’re trying to be specific in what we’re putting in the ground and some- times your tried-and-true products are the best.” Fernandez acknowledges that flo-


rists and consumers are always looking for something different, and growers enjoy introducing new varieties as well. But with production costs continuing to rise, he says the company is holding off on many new introductions unless it believes they will generate consistent, year-round demand. “Our goal as an industry is to deliver


smiles to the end consumers and make flowers part of their everyday lives,” he says. “There is a cost to that.”


Sarah Sampson is a contributing writer for the Society of American Florists.


The magazine of the Society of American Florists (SAF) 37


SHUTTERSTOCK/ANGELA N PERRYMAN


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