Florensis: sowing the seeds of colour in its sector
Every glorious plant and flower sold at your local florist or garden centre was once but a humble seed or seedling. As the world’s largest producer of planting stock, seedlings and seed for flower or plant nurseries, Netherlands-based Florensis quite literally adds a splash of colour to trends in the floriculture trade.
A consumer buying plants at Carrefour in Bordeaux, flowers at Ikea in Prague or organic primulas at Coop in Salzburg probably won’t give much thought to where these items originated. Most likely, they’ll be thinking about how these varieties of nature’s jewels will brighten up their home – or that of a loved one.
We tend to forget that every plant and flower started out as a seedling, cutting or seed a few months earlier. Of course, the germination period will be longer if, say, a researcher sets out to develop an even more stunning, superior variety of orange primula – in these cases, it will take years for the product to become commercially available.
900 million small plants a year
If anyone knows about cuttings, seedlings and seeds, it is Dutch company Florensis, which will have its 75th anniversary in 2016. With its head office, and 11 hectares of greenhouse space, based in the small town of Hendrik-Ido-Ambacht near Rotterdam, the company also operates production sites as far afield as Kenya, Ethiopia and Portugal. Florensis develops and produces flower and plant species and manages the distribution of 4,000 different products to a total of 7,500 growers, making it the world’s largest player in its sector. In addition to seeds and cuttings, the company also produces 900 million small plants annually.
As Florensis COO Leo Hoogendoorn explains, the flower or plant nurseries in their network subsequently tend to these plants and flowers and prepare them for the consumer market. Florensis, which operates at the top of the supply chain, won the Dutch Horticultural Entrepreneur Award in early January 2015. ‘As far as recognition from the industry goes, it doesn’t get any better than that’, Hoogendoorn beams.
‘We’re not interested in taking over the grower and retailer’s jobs, but we do take on the role of supply-chain managers, as it were.’
Not only a financier, but also a valuable partner
Over the years, the Florensis team has established a close relationship with the company’s principal banker, Rabobank. Hoogendoorn: ‘Our industry is one of peaks and troughs, and Rabobank perfectly understands the processes involved. They support us in ways that go well beyond providing finance – Rabobank is the only bank with the expertise required to provide this kind of service in our industry. They know the sector well, are able to assess our financial needs and are a valuable partner to us every step of the way.’
Florensis recognises some of the trends noted by Rabobank in its most recent international report on the floriculture industry. In fact, with its global operations, Florensis is the very embodiment of a number of these trends, checking every box including ‘specialisation’, ‘internationalisation’, ‘cooperation’ and ‘supply-chain management’.
Increasing focus on protected species developed in-house
Florensis markets products which could also be produced by other companies in the sector, but the company is focusing increasingly on using its expertise to develop its own plant and flower species, complete with patented names and properties. Consumers purchasing a primula with the mellifluous name ‘Primula Princess’ or ‘Primula Cleopatra’ can be certain that the seed of the plant was sown by Florensis. These protected species help the company to strengthen its market position – and that of the businesses that grow these products for the consumer market.
More specialised products, longer lead times
As a result of this change of direction, Florensis has found that its financing needs have changed as well, Hoogendoorn explains. Whereas your basic garden-variety plants take a maximum of six months to grow from seeds into the seedlings that are supplied to nurseries, the germination times for the species developed by Florensis itself will be significantly longer. ‘We have to start out by developing a parent line, for which we will produce the seeds. We then have to select the highest-quality seeds from the bunch, build up a stock, and start producing young plants that we can then go on to supply to nurseries. This means our lead time could be up to four times as long as for other products, so our working capital requirement will change as a result’, Hoogendoorn says. He acknowledges that these changes will also increase the risk levels to which his company is exposed. For example, it may turn out that one of its new products is not viable for large-scale production after all. ‘That could be due to the demands of the market: say we have created a new red-coloured plant and customers at stores suddenly develop a taste for yellow. What can you do?’ Hoogendoorn shrugs.
Despite being ensconced at the top of the supply chain, Florensis, then, is not immune to shifts in consumer behaviour, and the company is looking to gain greater control over the processes that influence this behaviour. Hoogendoorn: ‘We’re not interested in taking over the grower and retailer’s jobs, but we do take on the role of supply-chain managers, as it were. We work with retailers to develop a proposition, for example for the plants and their packaging. We develop the promotional materials and then find growers who can take over from there. We put them in touch with buyers so that they can broker a deal. Growers are guaranteed a premium price and added value is created for the entire supply-chain.’
Additional greenhouse space and expertise
Florensis depends on its network of partners to be able to maintain its output of seedlings and seeds. ‘We’re a typical seasonal company. We’re lucky because the Netherlands has a thriving vegetable greenhouse industry, and many of those greenhouses have adjacent nurseries. Their operations are countercyclical to ours in that their low season is our peak time, so during the busy season we rent an additional 16 hectares of greenhouse space, including the services of a team of growing experts. This process is coordinated by our own people. The products grown in this way are shipped back to our facilities here in Hendrik-Ido-Ambacht, where we prepare them for distribution. We can truly say our model of cooperation is unique in the world.’