Rabobank in business

9-5-2008 | Other news

The U.S. floriculture industry, led by a boost in sales on Mother’s Day, has enjoyed a slow but steady growth rate over the years, says Rabobank in a new report entitled Rabo Ag Focus: U.S. Floriculture.

Mother’s Day accounts for roughly 10 percent of total annual U.S. cut flower sales, which totals about USD 41 million. But when compared to a more lucrative European market, the U.S. floriculture industry has plenty of catching up to do. 

American flower buying culture
According to the report, on average Americans annually spend USD 31 per capita on cut flowers as compared to over USD 100 per capita spent by Swiss nationals on the demand-driven product. 

Industry needs in-roads
Improving public image is a key element for success, the report further argues. The industry could see off these hurdles by boosting consumer confidence and making in-roads on potential opportunities in the personal-use segment. Better still, marketing strategies need to be uplifted.

Innovative marketing
"The fact that the wine segment, for instance, has welcomed people at their vineyards has resulted in a change in consumer perception. The floriculture sector could profit from such innovative marketing efforts, as well," said author of the report Marieke de Rijke, Rabobank Food & Agribusiness Research and Advisory (FAR) Assistant Vice President.

"The consumer needs to recognise the value of the product and gain appreciation. Flowers could become more commonplace and widely enjoyed," said De Rijke.

California leading domestic production
On a positive note, California stands as the major flower-producing state in the U.S. market. However, the opportunities are not without threats. America’s position in the market is being challenged by competition posed by overseas growers. 

Columbia and Ecuador 
Cashing in on hot climate and low wages, Latin American countries including Colombia and Ecuador have been topping cut flowers charts, promptly becoming principal producers for the region. 

India and China
While India and China have become prime competitors to the U.S. at almost every front, their capacity in the floriculture industry is less threatening. Despite their low-cost focus, production in the two Asian giants is primarily focused on the domestic market. 

Trade beyond borders
The low value of the U.S. dollar has had both a positive and negative impact. While depressingly increasing input costs, the underperforming dollar has also created opportunities for the U.S. floriculture sector to trade beyond borders. The export market could generate an increased interest in and consumption of U.S. flowers in Canada.