Pandemic fuels growth prospects for online flower market
If Eliza Doolittle were alive today, she’d be as likely to be found pitching investors for seed funding as she was shouting “a dime a heap” at passers-by in Covent Garden.
The sale of flowers, the job of George Bernard Shaw’s heroine Cockney, is moving online, the latest upheaval in a sector still dominated by thousands of independent operators.
According to Aron Gelbard, managing director of UK flower and plant delivery company Bloom & Wild, the fragmented nature of the industry and its lack of technological savvy makes change painful. “Flowers are an emotional product and as an industry we do a terrible job,” he said.
Bloom & Wild last month announced the acquisition of Dutch rival Bloomon, for an undisclosed sum, creating what it claims is Europe’s biggest online player. But its projected revenue of £200m will still be less than 1% of the estimated total market of £22bn.
As in other industries, Covid-19 has pushed consumers online. Florists were closed to walk-in customers during lockdowns, and at the start of the pandemic supermarkets diverted sales and distribution space to essentials. Meanwhile, homebound consumers have been spending a lot of energy to light up and green their homes.
John Hackett, managing director of flower delivery company Arena Flowers, said many customers forced to shop online had “found a better experience than they expected. We expected central England to go online, but much older people, who we thought wouldn’t buy online, adopted very quickly.
Newly formed online habits will put more pressure on traditional florists, he added, who “probably have even less of a lead now than they thought”.
More than 600 street florists have closed in the past six years, according to the Local Data Company. Interflora, which has been organizing flower deliveries among its member florists since 1923, was sold to a US company in 2019 for $59.5 million.
That’s comfortably less than the £75m Bloom & Wild raised in its last funding round, although Interflora still accounts for a significant share of UK flower orders.
Bloom & Wild, launched in 2013, is typical of a new breed of florists. Most of his expertise lies in website coding, data capture, analytics, marketing and search optimization – skills and resources that Gelbard says are well beyond the average street operator.
It operates a sleek website with beautiful images and was one of the pioneers of subscription flowers delivered in flat cardboard boxes through the mail.
Flower arranging is fully outsourced to Flamingo, a low-key UK-based wholesale florist who grows flowers in Africa and ships them from dedicated warehouses in Europe. Its customers include almost all major supermarkets in the UK.
It’s the same at Moonpig, the greetings and gift card company that recently floated in London. Around a fifth of its £340million annual turnover comes from bouquets – all processed, dispatched and delivered by Arena Flowers, who buy direct from growers.
Supermarkets spurred the industrialization of floristry in the 1990s, according to Arena Hackett, when they began to develop nationwide distribution capacity for flowers.
Around the same time, flowers from Africa, which can be grown outdoors all year round, began to disrupt the traditional European supply chain. “Production costs fell, packers were able to cut prices, and many wholesalers disappeared,” Hackett said.
The new modus operandi has reduced delays as well as costs. “With traditional florists, it can easily take five or seven days from the flowers being cut to their arrival on the customer’s kitchen table,” said Bloomon’s Bart Troost. “For us it’s about 36 hours.”
Gelbard and others argue that airlifting flowers from Africa is less environmentally destructive than consumers imagine.
“When you grow a flower in Kenya, which has the right climate, it has about one-sixth the climate impact compared to growing it in a heated greenhouse in northern Europe.”
Subscription business models, which drive recurring revenue, customer data and predictable demand patterns, have been an important area of growth, but the on-demand market still has huge potential, according to Troost.
“We actually shifted our focus from subscriptions to demand two years ago. This now represents about 70% of our activity, compared to 90% two years ago, and it will be at most 30% in the long term.
Not everyone thinks traditional stores are doomed. Caroline Marshall-Foster, third-generation florist and editor of The Florist website, expects weaker operators to close, as do struggling chain stores, but not for there to be a sector-wide implosion.
“Will the florists survive? I’m pretty sure the good ones will,” she said. “Local florists are still the only ones who can arrange funerals and weddings and they are the only ones who can perform same-day services.”
They may not have the buying power of an arena or the technological wizardry of Bloom & Wild. “But they offer a very personal service – and for a lot of people that still means a lot.”
The pandemic has been difficult for many local florists; the lucrative wedding market all but shut down, the wholesale price of flowers skyrocketed and productivity was reduced as they had to operate behind closed doors. But the closings have boosted purchases of plants and flowers.
Mintel researchers expect that over the next five years, flowers will become more of a daily pleasure and less of an event purchase.
Marshall-Foster said the power of flowers “has never been more appreciated than it is today . . . they can be used to say anything: I love you, I miss you, I am thinking of you “.