The North American market for Au

					     The North American
                market for
Australian native flowers:
                A preliminary study
                                 A report for the
                   Centre for Native Floriculture
                  The University of Queensland
                         By Lilly Lim-Camacho




         THE CENTRE FOR NATIVE FLORICULTURE
The North American market for Australian native flowers:
A preliminary study
July 2006
Centre for Native Floriculture
The University of Queensland

The Centre for Native Floriculture's vision is to help create an internationally
competitive and environmentally sustainable native floriculture industry that
provides significant employment opportunities in Queensland. As part of its charter
the Centre for Native Floriculture's Value Chain Management Program undertakes
market research activities that guide and inform in order to enhance the
competitiveness of the industry.

While care has been taken in preparing this publication, the University of
Queensland accepts no responsibility for decisions or actions taken as a result of
any data, information, statement or advice, expressed or implied, contained in this
report.

Copies of this report are available online on: www.aghort.uq.edu.au/cnf

For further information, contact:
Lilly Lim-Camacho
Value Chain Program
Centre for Native Floriculture
The University of Queensland
Gatton Queensland 4343
Email: lilly.lim@uq.edu.au
Ph: +61 7 5460 1647
 ACKNOWLEDGEMENTS
On behalf of the Centre for Native Floriculture, I would like to express my gratitude
to the participants of this research. They have provided such valuable information,
and we at the Centre for Native Floriculture appreciate their openness and
cooperation.

I would also like to thank our Australian contacts who provided us with
recommendations on persons to see in North America. We cannot thank you
enough for trusting us with this information, and it is hoped that you are able to
benefit from the results of this research.

I would also like to thank David and Olive Hockings for providing sample products
for this trip. We also appreciate the assistance that Cedar Hill Corporate Group and
Duamex New Jersey for facilitating the transport of these sample products.




                                       -i-
 TABLE OF CONTENTS
Acknowledgements ..................................................................................................................... i
Table of Contents ....................................................................................................................... ii
Introduction............................................................................................................................ - 1 -
Research methods ................................................................................................................ - 2 -
Results: United states ........................................................................................................... - 4 -
   Los Angeles....................................................................................................... - 5 -
   Chicago ............................................................................................................. - 8 -
   New York ......................................................................................................... - 11 -
   Boston ............................................................................................................. - 14 -
Results: Canada.................................................................................................................. - 17 -
   Vancouver ....................................................................................................... - 18 -
   Montreal........................................................................................................... - 22 -
Discussion ........................................................................................................................... - 24 -
   Can the established market research methodology employed in Japan be
   transferred for market research in North America?......................................... - 24 -
   How are Australian native flowers marketed in the Los Angeles, Chicago, New
   York, Boston, Vancouver and Montreal? ........................................................ - 24 -
   What are the perceptions of Australian native flowers by various customers along
   the supply chain? ............................................................................................ - 26 -
Conclusions ......................................................................................................................... - 27 -
References .......................................................................................................................... - 28 -

Table 1. List of visits.............................................................................................. - 2 -

Figure 1 Channels for Australian native product in Los Angeles, Chicago, New York
     and Boston .................................................................................................. - 25 -
Figure 2 Channels for Australian native product in Vancouver and Montreal..... - 26 -

Plate 1 Barry Veffner with a ready-made bouquet ................................................ - 5 -
      Plate 2 The Jacob Maarse store in Pasadena ............................................. - 6 -
Plate 3 Jacob Maarse florists love using steel grass ............................................ - 6 -
      Plate 4 KaBloom in Beverly Hills ................................................................. - 7 -
Plate 5 A KaBloom kiosk in New York .................................................................. - 7 -
Plate 6 Waxflower is used often in these Pesche arrangements.......................... - 9 -
Plate 7 Unusual customers: The meetinghouse props are combined with flowers ... -
     10 -
Plate 8 Gary Page ............................................................................................... - 11 -
Plate 9 The Renny and Reed interior.................................................................. - 12 -
Plate 10 Floralies delivering to one of their major customers – Cartier. ............. - 13 -
     Plate 11 Kelley Wholesale Florist at the Boston Flower Exchange. ........... - 14 -
Plate 12 Winston’s workshop .............................................................................. - 15 -
Plate 13 Winston’s display at its studio ............................................................... - 15 -
Plate 14 Ilex florist Maryanne shows how Dianella can be used. ....................... - 16 -
Plate 15 Louis Barry florist .................................................................................. - 16 -
Plate 16 The UFG flower auctions ...................................................................... - 19 -
Plate 17 Scentrepiece Flower Market ................................................................. - 20 -
Plate 18 The Thomas Hobbs interior .................................................................. - 20 -
Plate 19 Kips Market in Vancouver ..................................................................... - 21 -
Plate 20 Fleurexpert ............................................................................................ - 23 -
Plate 21 Fauchois Fleurs had Christmas bush and wax flower in stock ............. - 23 -




                                                         - ii -
 INTRODUCTION
The North American market for cut flowers is considered one of the biggest in the
world, with the United States retail market alone estimated to be worth US$7.32
billion in 2003 (Pohmer, 2004). North America – the United States and Canada
combined – is Australia’s second biggest market after Japan.

The North American market for Australian native flowers, especially that of the
United States, has long been recognised as having potential for development. Such
potential has already been tapped by South American producers who grow
Australian native products – wax flower and kangaroo paw from Peru and Ecuador
are common in the market. These are often more affordable than product that is
sourced from Australia due to lower production and logistical costs. However, the
varieties available from South American suppliers are often limited and ‘old
fashioned’. Australian producers perceive differentiation and the supply of high
quality product to be the main source of competitive advantage for Australian grown
products.

The Value Chain Program has established the importance of conducting market
research in order to uncover the needs of customers along the cut flower supply
chain. Market research conducted in Japan has shown that information that
Australian firms have of their markets and customers is limited. With this insight,
market research into the North American market was identified as a necessity in
order to improve current marketing practices and hopefully gain competitive
advantage over other suppliers of Australian cut flowers. This research acts on that
imperative with the aim of providing a description of how Australian native flowers
are marketed in selected markets in the United States and Canada.

The objectives of this research are:

   To identify whether or not the approach employed in conducting market
   research in Japan can be appropriately applied in North America,

   To identify the process of marketing Australian native flowers in selected cities
   of the United States and Canada, and

   To uncover perceptions of Australian native flowers by various customers along
   the supply chain.

This report collates the findings of research conducted in 2005. Cut flower markets
in Los Angeles, Chicago, New York and Boston were investigated in the United
States, while Vancouver and Montreal were visited in Canada. Los Angeles was
chosen as a market to explore because it is an established market for Australian
native flowers and a common point of entry for Australian product. On the other
hand, Chicago, New York and Boston were chosen on the basis of their potential as
high-value, non-mainstream markets for Australian product. Vancouver and
Montreal in Canada were chosen for the same reasons. Previous research by
McKinna (2001) has verified that these markets do have potential for development
for higher value products.




                                       -1-
 RESEARCH METHODS
Data used for this study was collected over two visits in 2005 – Los Angeles and
Vancouver in April and Chicago, New York, Boston and Montreal in November. As
with market research conducted by the Value Chain Program in Japan, a supply
chain approach was used for this research. Interviews were conducted with
importers, wholesalers, florists and other cut flower users in the chosen markets.
Recommendations from Australian exporters were gained in order to identify
importers, while importers and wholesalers in the United States and Canada were
approached for recommendations of their florist and other retail customers.

One aim for data collection was to visit a range of customers in order to get a
variety of opinions depending on the use of flowers. This was achieved for this
research, with visits made to importers and wholesalers who operate out of various
locations, source from various suppliers and cater to different types of markets.
Similarly, florists and flower customers were also diverse. Some florists were
                                                                       th
classified as very upmarket – such as those located in New York’s 5 Avenue.
Others were not florists – such as The meeting house in Chicago – an events
coordinator, Kips Market, a Asian grocer in Vancouver, and Wholefoods, a
nationwide organic supermarket chain.

A total of 35 importers, wholesalers, florists and other users were interviewed face
to face, not including visits to numerous florists and the UFG flower auction in
Vancouver where interviews were unable to be conducted. Table 1 shows a list of
companies visited for this research.
Table 1. List of visits

         City             Importers and wholesalers                Florists

    Los Angeles       Mellano and Company             Jacob Maarse
                                                      R. Jack Balthazar Fetes et Fleurs
                                                      Conroys Flowers
                                                      KaBloom
                                                      Whole Foods Market
    Chicago           Everflora Chicago               Pesche's
                      Duamex                          The Meetinghouse Companies
                      AMC                             Chicago Blooms
                      Kennicott Brothers
    New York          Gary Page                       Renny and Reed
                      Duamex NJ                       Floralies
                                                      Takashimaya
                                                      Zeze
    Boston            Quinlan Wasserman               Winston Flowers
                      Kelley Wholesale Florists       Ilex
                      RJ Carbone                      Boylston St. Florist
                                                      Louis Barry Florist
    Vancouver         Florimex Vancouver              Scentrepiece Flower Market
                      Kirby Floral Inc                Thomas Hobbs Florist
                      Meyer Floral Company            Kipps Market
                      UFG Auctions
    Montreal          Sierra Flower Trading           Fauchois Fleurs
                      Fleurexpert




                                           -2-
It was important for this research to understand how each firm operates, and how
they source and market their products. For this reason, questions regarding their
background and the nature of relationships with their suppliers and customers were
asked. It was also important to identify the role that Australian native flowers have
in their product range and whether or not the products are deemed valuable by their
customers. Interviewees were also asked questions pertaining to their product
range and their perception and current use of Australian products.

The following section collates the results of this research. Background information
on the cut flowers industries of United States and Canada are also available to
provide the reader with an overview of the environment that these firms operate in.




                                      -3-
    RESULTS: UNITED STATES
A snapshot of the United States1

    Domestic production       A$4,179 million (wholesale, 1995)

    Production by state       California (65%), Florida. Domestic production is going down over the years

    Production by flower
                              Roses, carnations, gladioli, chrysanthemums
    type (volume)

    Area to flower
                              6,033 hectares (1996)
    production
    Exports                   A$48.5 million (fresh); A$22.8 million (dried)
    Exports of all flowers,
    by country of             Top three: Canada (72%), Japan, Ireland
    destination
    Fresh flowers             A$48.5 million (1995); Top 3: Canada (75%), Japan, Netherlands

    Dried flowers             A$22.8 million (1995); Top 3: Mexico, Canada, Netherlands

    Imports                   A$824 million (fresh); A$25.1 million (dried)
                              Colombia: 85% (all flowers) in volume, with a decreasing value from 82% to
    Imports, by country of
                              78% (1995). Imports from Ecuador (2nd) have doubled over three years to
    origin
                              1995.

                              Top three (volume): Carnation, Rose, Chrysanthemum. Top three (value):
    Imports, by flower type
                              Rose, Carnation, Chrysanthemum.

    Fresh flowers             A$824 million (1995); Top 3: Colombia (64%), Ecuador, Netherlands
    Dried flowers             A$25.1 million (1995); Top 3: India, Mexico, Netherlands

                              Miami, for South American flowers, distributed to Northern cities. New York,
    Entry points (import
                              for flowers from the Netherlands and Israel. Los Angeles, for flowers from
    agent locations)
                              Oceania (Australia and New Zealand).

    Consumption               A$4,952 million (1995)

    Per capita
                              A$74 (including fresh, dried, silk and plants)
    consumption
    Buyers                    Women (79%)
                              Occasions (top 5): Christmas (28%), Mothers Day (25%), Easter/Passover
                              (21%), Valentines Day (17%), Thanksgiving (3%). Non-occasions (top 5): no
    Reasons for purchases
                              reason (58%), home décor (11%), birthday (6%), sympathy (3$), get well
                              (3%)
    Retailers, purchases by
                              Top three: Florist (68%), supermarket (17%), toll-free number (4.5%).
    type
                              Majority of imported flowers are handled by importers who also have a
    Major distribution
                              wholesaling function. Flowers imported through the major ports are trucked
    channels for fresh cut
                              all throughout the country for sale in central markets or direct to major
    flowers
                              customers.
    Major flower trade        Los Angeles, San Francisco, Chicago, Detroit, New York, Pittsburgh,
    regions                   Atlanta, Miami, Boston, Dallas, Houston, Denver, Seattle, Portland

    Australian flower
                              A$4.217 million in 96/97; 687 metric tonnes
    exports

                              Australia supplies mainly filler flowers. Sixth largest supplier of dried flowers
    Flower type
                              (not significant)

    Market characteristics    Price sensitive (filler flowers)




1
    McKinna (2001) and The Flower Export Council of Australia (1998)




                                                    -4-
Los Angeles
1. Mellano and Company

Mellano and Company is a cut flower marketing firm that was established in 1925.
Mellano imports, grows, wholesales and ships cut flowers. The wholesale operation
is located in the Los Angeles Flower Market, which houses 54 wholesalers in one
building. The flower market is open to the public, with some wholesalers focussing
their operations towards consumers rather than florists because of cash payments.
Most of these wholesalers stock basic products such as roses, carnations and
gypsophila which are popular with consumers.

Mellano stocks a wide range of products, including ready made mixed bouquets
that are purchased from South America. The specifications for these bouquets are
agreed upon by Mellano and their supplier (Plate 1). Some of these specifications
include bar codes and prices which they use to track product all the way to their
customers all over the United States. Mellano primarily supplies florists, with some
of their customers purchasing from them alone. However, a large volume of product
is also sold to wholesalers interstate, which is why the shipping and distribution side
of the company is important.




               Plate 1 Barry Veffner with a ready-made bouquet

Melano had wax flower, rice flower, leucospermum, boronia and eucalyptus in
stock, although most of these Australian native flowers were grown in California.
Mellano themselves grow rice flower and wax flower at their farms around
California and in Nevada. The company grows 62 crops over 300 hectares, 40
hectares of which are ranunculus.

2. Jacob Maarse

Established in 1966, Jacob Maarse is a renowned florist in Southern California.
Jacob Maarse is based in Pasadena, with a commanding presence due to its large,
classic store that was previously a Cadillac dealership (Plate 2). A second shop is
located in downtown Los Angeles. Jacob Maarse employs sixty employees, with
several floral designers on board. The florist caters to a large corporate client base,
with a workroom in the rear of the store that is constantly producing arrangements
to be delivered to clients. The shop produces a mix of floral designs – some
designers prefer modern, geometric arrangements, while others create classic
designs. All orders made to the shop are custom-made and never pre-arranged.
The shop also stocks a large range of gift ware such as candles, home décor,
antiques and fragrances. The owner Jacob Maarse has his roots in flower growing
in Aalsmeer, the Netherlands. He has continued with this tradition through a three-



                                       -5-
acre rose garden that supplies his two shops from April to December. Steel grass
was available in the shop and is used widely by the designers.




                Plate 2 The Jacob Maarse store in Pasadena




                     Plate 3 Jacob Maarse florists love using steel grass

3. R. Jack Balthazar Fetes et Fleurs

R. Jack Balthazar Fetes et Fleurs is an events organiser based in South Pasadena.
The company provides design and organising services for weddings, charity galas,
fragrance launches and even small dinner parties. R. Jack Balthazar does not just
provide floral decorations, but also provides other props such as fabric and other
accessories to decorate an event. Choice of décor to use in events is based on
meetings with clients and their vision of what the event will be. Flowers, while an
important part of the décor, are not the only component, with the designers often
using furniture and other material to decorate the space. Australian native flowers
are not often used, although they have used proteas and other South African
natives previously. Orchids, especially Cymbidiums, have been a recent favourite.
Rene Delacueva, Creative Director, buys flowers for their events at the Los Angeles
Flower Markets.

4. Conroy’s Flowers

Conroy’s Flowers is a franchise operation that has been running for 30 years. The
company has over 70 stores in the United States, with its headquarters located in
Burbank, California. Richard and Arlene Schraer have been franchisees for 20
years and operate the Downey, and Alhambra stores. According to Richard, each
franchise purchases its own flowers. The Conroy’s name allows them to get
discounted prices, but purchasing themselves allows for flexibility. All products are



                                      -6-
sourced from the Los Angeles Flower Market. The Alhambra store caters mostly to
an Asian market that use flowers for home, worship or holidays. For these types of
customers, mixed bouquets are popular. The store seems to have a steady
clientele of older customers who purchase once a week, along with customers who
walk past and buy on impulse. The Downey business caters to corporate clientele,
along with hospital purchases. The Downey franchise is ranked in the top five of all
Conroy’s stores due to its location. Carnations and roses are two biggest sellers in
both stores, with tulips becoming increasingly popular. Australian native flowers are
not widely used in the store, although some of the foliage products, such as steel
grass, are used.

5. KaBloom

KaBloom is a franchise operation that started in Boston in the late 90’s. The chain
now has over 100 retail stores in 29 states. The Beverly Hills shop was visited in
April. KaBloom prides in its ability to purchase flowers direct from growers, with
imported flowers coming from Colombia, Ecuador, Israel and the Netherlands.
Considered to be the only florist chain in the United States, KaBloom prides itself in
its ability to negotiate prices with growers due to its volume purchases. Flowers are
transported wet via FedEx from the growers to its individual stores nationwide –
with the chain priding itself in its ability to get flowers in-store within 48 hours of
being cut. The stores order the flowers themselves, without the need for a central
distribution system. Through FedEx, flowers are packed at the growers farms in
individual boxes that go directly to the stores such as the one in Beverly Hills (Plate
4). The company has recently developed kiosks (Plate 5), or flower vending
machines, to sell flowers in office lobbies, train stations and airports.




                 Plate 4 KaBloom in Beverly Hills




                    Plate 5 A KaBloom kiosk in New York

6. Whole Foods Market

Whole Foods Market was established in 1980 in Austin, Texas, where it started as
a small food store. Nowadays, Whole Foods is a chain of 184 stores in North
America and the UK, specialising on natural and organic produce. Whole Foods


                                       -7-
has a floral section in each store, offering seasonal flowers and arrangements. The
most common products are roses, daisies and carnations, along with tulips,
orchids, and potted plants. Susan Hillyer, who works for the floral section of Whole
Foods, also buys product from the Los Angeles Flower Market. However, with the
continued expansion of the company, its buying processes may be modified to suit
purchases in larger volumes.

Chicago
1. Everflora Chicago

Everflora Chicago is an importer that was established in 1985, originally catering to
wholesale florists. Recently, due to the changes in the way wholesalers are able to
import themselves, they have focussed on marketing direct to retailers. They
market to internet operations, supermarkets and the traditional florist equally.
Among these three, internet operations have been experiencing the most growth,
while supermarkets and traditional florists have plateaud. The company has its own
bouquet operations where they market to mass market retailers.

According to Peter Linney, wax flower and calcynia are the two most popular
products from Australia. Other filler flowers and greens are also important. In
choosing products to import and stock as part of their operations, Everflora looks at
how long the flower season is. Their customers need to have a consistent supply of
product to incorporate into their marketing programs, including Everflora’s bouquet
operations. Products like Christmas bush are good items, but the season is too
short. They need time to introduce and market the product and the product’s
season does not cater to the time they require to do this. Products need to be
available for at least three months for them to be marketed effectively.

2. Duamex Chicago

Duamex was established over 15 years ago and has offices in Miami, Chicago
(which caters to the Mid-west market) and New Jersey (see New York section). The
Chicago office has roots in Zurrell, an importer that was later purchased by
Duamex. They cater to the wholesale market and do not market directly to florists
as other importers have begun doing. Over the past few years, changes have been
occurring in importer, wholesaler and retailer relationships. Previously, importers
market to wholesalers who then market to retailers. Nowadays, importers are able
to market to retailers, especially those who are able to purchase in large volumes.
Similarly, wholesalers and large retailers have begun importing direct from growers
because changes in grower operations have allowed smaller volumes of product to
be shipped at a cost effective rate. Duamex competes with over 45 wholesalers and
importers in the Chicago area, most of which are located close by.

Australian flowers were at their peak almost 30 years ago, when they were first
introduced in the market and were novel. However, nowadays, they are not too
popular. The most common products imported by Duamex Chicago are Christmas
bush, Didgeri sticks and wax flower.

3. AMC

AMC is an importer who supplies directly from growers in 25 countries around the
world. A third of their supply is sourced from the Netherlands, with dendrobium
orchids being one of the most important products. They market their products to
small-medium sized wholesalers and bouquet makers, often pre-selling product in
order to avoid large inventories. As with Duamex, AMC faces the problem of being
cut out by larger wholesaler customers who are able to import product themselves.
For this reason, they target small-medium scale wholesalers who are unable to



                                      -8-
import product themselves. AMC’s turnover is approximately US$5 million, and the
company is growing. However, the Australian side of the business is small in
relation to other products.

AMC imports from four Australian exporters. The major products imported from
Australia are wax flower, calcynia, Christmas bush, banksia and leucadendron.
According to Jim Miller of AMC, the success of these products in based on how
much time they are able to spend marketing them. Often, AMC has marketing
programs for flowers, but the ability to conduct these programs is based on how
well they can rely on information provided by suppliers on the quality and timing of
supply of a product. Often, marketing programs require a nine-month planning
period.

4. Kennicott Brothers

Kennicott Brothers is a cut flower wholesaler owned by AMC. Majority of product
stocked by Kennicott is sourced from AMC, although they may purchase from other
importers if AMC is unable to source certain products. All products sourced
through AMC are pre-ordered.

Kennicott caters to local florists who come to their shop to choose product that they
purchase. Kennicott also stocks florist sundries as part of their range.

5. Pesche’s

Pesche’s is a florist, nursery and gift shop located in the suburbs of Chicago. The
shop is a large operation that also includes growing sections that supply feature
products to their nursery operations, such as poinsettias for the Christmas season.
Christmas is a very busy season for the whole shop with decor, plants and floral
displays all geared for the festivities. The shop employs 11 designer florists,
although the share of the florist side of the business is smaller than gifts. The store
has a large workroom in the back where arrangements are constantly made and
dispatched for delivery. As a florist, Pesche’s caters to a large funeral market, with
a funeral home located opposite the shop. They also cater to customers who
purchase for gifts, which supplements the gift shop that they have. The owners
purchase products from Kennicott Brothers, among other wholesalers. They do not
stock too many Australian native flowers – most of their flowers are traditional
although, through their designers, they try to differentiate themselves from other
florists with original designs. The most common Australian native flower used is
wax flower (Plate 6).




                Plate 6 Waxflower is used often in these Pesche arrangements




                                       -9-
6. The Meetinghouse Companies

The Meetinghouse is a special events design and production company that caters
mostly to corporate clients. The company provides an all inclusive service to clients,
with décor, floral design, audio-visual and entertainment services available (Plate
7). Some of its corporate clients include the likes of McDonalds, Microsoft,
American Airlines, Marshall Fields and FedEx.




Plate 7 Unusual customers: The meetinghouse props are combined with flowers

The company employs several in-house designers who work with clients in creating
an event, often starting with themes or colours that clients prefer. Some events take
a year to plan, while others, such as smaller events during the Christmas season
may only have weeks in preparation. Christmas is the busiest time of the year, with
over 50 events planned for the 2005 season. In terms of floral design, The
Meetinghouse specialise in distinctive designs that often feature non-floral products
such as feathers and glass, with geometric designs being the most popular at the
time of the visit. Roses, calla lilies, carnations and orchids are the most frequently
used products. Australian natives are not often used, although designers may be
convinced to use them if they suit the design required by the client. The company
purchases flowers from wholesalers only.

7. Chicago Blooms

Chicago Blooms is an established florist located in downtown Chicago. The shop
has been in its current location for over 20 years. Chicago Blooms caters to
residents who purchase for home use or gifts – Chicago is one of the few larger
cities in the United States that still have a lot of residential space within the central
business district. The shop has a large volume of flowers in stock, and customers
prefer this as they are able to choose which flowers will go into bouquets or
arrangements. Their clients prefer classic, soft looking arrangements, which lend
themselves to the use of traditional flowers. Chicago Blooms prides in its ability to
provide customers with high quality flowers. The florist purchases from wholesalers
in the area several times a week, and everyday if required. According to the florist,
the owners always try new flowers when they see them at wholesalers. Wax flower
(My sweet sixteen) was the only Australian native product in store.

There are no florists within the main streets of Michigan and State in downtown
Chicago. These two main streets are frequented by shoppers as the major
shopping centres of Marshall Fields and Sears are located here, among other



                                        - 10 -
upmarket boutique shops. It possible that florists in downtown Chicago are located
within office buildings and department stores. According to wholesalers and
importers, there are more florists located in North Chicago, where an affluent
population resides. In suburban Chicago, florists are located in ‘smaller’ shopping
centres (small by United States standards), where a large retailer such as Home
Depot, a supermarket and several restaurants may also be located. These florists
often cater to the gift market, with a large range of ready made arrangements and
bouquets available in store. Flowers are not often displayed outside the shops,
largely due to weather conditions.

New York
1. Gary Page

Gary Page is a flower wholesaler set up 10 years ago in the New York Flower
Markets, targeting high end florists and providing them with high quality products.
Gary Page the owner has been involved in flower marketing for over 20 years. His
core customers are florists in Manhattan, although he also ships to florists outside
New York State. According to Gary, florists in New York have a variety of suppliers
to choose from, including importing flowers themselves via the internet.




                     Plate 8 Gary Page

The company handles flowers that are not mass-marketed, focussing on products
that are of high value and sought after by his customers. He no longer markets wax
flower because they are no longer special and are available to all types of florists –
including mass marketers and delis.

According to Gary Page, new flowers introduced to the market need to have high
impact, otherwise they can be easily substituted. He believes that Australian
suppliers need to focus on native products because they are different and unique,
and therefore provide an advantage over traditional flowers. However, he also
believes that Australian grown flowers are overpriced, to their disadvantage. This
disadvantage is compounded by the fluctuating prices demanded by growers,
which tends to make customers discontinue purchases.

Gary Page sources Australian native flowers from a specialist exporter who is able
to offer a large range of product in smaller volumes. Orders with this exporter are
based on an availability list provided a week before shipping. His customers on the
other hand, are not provided such a list as he believes that good florists need to
see product in order to appreciate the quality that they are purchasing. He wants



                                      - 11 -
his customers to come to his store to see the range and quality that he has
available.

2. Everflora New Jersey

Everflora New Jersey is part of the Duamex group. The company’s core customers
are mass market retailers, such as supermarkets, and wholesalers in the tri-state
area where they can deliver overnight. They focus on customers who are able to
purchase in large volumes, as marketing to smaller customers is not profitable for
them. Duamex also has a bouquet operation based in Miami, which is able to
deliver all over the country.

Everflora New Jersey sources Australian native flowers from two major exporters.
According to Dan Padula, volumes of product from Australia has gone down
significantly, from 600 boxes a week five years ago, to less than 100 boxes a week
in 2005. This change has been brought about by the ability of wholesalers in the
United States to import directly from exporters in Australia.

Their main products from Australia are wax flower and calcynia, which they are able
to market in volumes to mass market retailers. In addition, these products can be
priced according to the needs of their customers. According to Dan Padula, choice
of products to market is critical, because the cost of importing products is
continually increasing and large volumes help alleviate these costs. Specialty
flowers are difficult to import because they cannot sell large volumes of them. Such
specialty products are also difficult to market because their customers are not
familiar with them. Wax flower and calcynia on the other hand, are widely accepted
by his customers.

3. Renny and Reed

Renny and Reed (Plate 9) is a Park Avenue florist that was founded in 1972. With
owners with backgrounds in event organisation and lifestyle design, the florist
specialises in entertainment design. Some of its clients include Yves Saint Laurent,
Giorgio Armani, The Metropolitan Museum of Art and even The White House.
However, Renny and Reed still have a good residential client base, mostly wealthy
residents of downtown New York. For these clients, the florist tends to focus on
classic arrangements, using a large amount of bulbs and roses. Peonies from New
Zealand are also an important product, as well as orchids. There were no
Australian native flowers in stock at the time of the visit. The florist purchases its
flowers from several wholesalers at the New York Flower Market, one of which is
Gary Page.




              Plate 9 The Renny and Reed interior




                                      - 12 -
4. Floralies

Kostas Panagopoulos, owner of Floralies, has been in the industry for 23 years.
                                th
The Floralies shop in East 55 Street of New York has been in its location for 11
years. Floralies cater to events and corporate clients such as Cartier, CBS, and The
Four Seasons Hotel, along with some residential customers (Plate 10). Orders are
made everyday over the phone, with some clients walking into the shop. Kostas
purchases flowers from the New York Flower Market everyday, spending up to
US$30,000 with one wholesaler. He prefers not to store the flowers himself in order
to be assured of freshness. Orchids and exotic, non-traditional flowers are his
favourites. Often, he mixes these flowers with traditional flowers such as roses in
their arrangements. There were no Australian native flowers in store at the time of
the visit.




        Plate 10 Floralies delivering to one of their major customers – Cartier.

5. Takashimaya

The Takashimaya flower shop is part of the Takashimaya New York department
                   th
store, located in 5 Avenue. The store is owned by the Japanese Takashimaya
Corporate Group which has 20 shops in Japan and four shops internationally (New
York, Taipei, Paris and Singapore). Takashimaya New York is a very high-end
store which provides a combination of retail services – clothing, gift ware, flowers
and even spa treatments. The store is fronted by its flower shop, which caters to
events, corporate customers with weekly orders and walk in customers. These are
often wealthy customers in their 40’s and 50’s. A small table arrangement is priced
at US$125, while a taller arrangement is valued at US$200. The shop uses a lot of
unusual products such as banksia cones and dried branches, which their florists
love to use. Peonies, roses and calla lilies are the most popular flowers.

6. Zeze’

Zeze’ is a New York florist that has been in existence for 18 years. Based in New
           st
York’s 1 Avenue, Zeze’ caters to both upscale corporate and residential clients.
According to their florist, corporate clients often buy flowers for their own use at
home as well. Weddings are also a major part of its clientele. Zeze’s style is classic,
preferring compact arrangements with minimal foliage. Orchids are popular
products, both for cut flowers and as pot plants. Apart from flowers, Zeze’ also
stocks plants, gifts and home ware. In addition to floral services, Zeze’ also designs
gardens and even has its store available for use in small events. At the time of the
visit, yellow kangaroo paw was available in store, although according to their florist,
this is unusual. A client wanted yellow and gold tones for an arrangement and this
was the only product they could find that would suit the colour scheme. Australian
native flowers are not a common product to have in stock.




                                       - 13 -
The florists visited in New York were all high end florists, but these are not the most
common florists in the city. New York has many corner stores and delis that carry
flowers as part of their product range. These shops often have a large volume of
product on display in their shop front, and can be found in almost every corner of
downtown New York. Prices are significantly lower in these shops, and there are no
arrangements available as most customers purchase for home use. Apart from this,
there are also the mid-range florists, which, upon observation, seem to have a large
amount of ready made arrangements in modern, geometric styles. As one New
York florist commented, mid-range florists tend to favour this style, while high-end
florists tend to focus on classic styles.

Boston
1. Quinlann Wasserman, Kelley Wholesale Florists and RJ
   Carbone

Quinlann Wasserman, Kelley Wholesale Florists and RJ Carbone are wholesalers
located at the Boston Flower Exchange. The flower market houses 17 wholesalers
in its Albany Street location, a few blocks from downtown Boston. Quinlann
Wasserman is a wholesaler at the Boston Flower Exchange, supplying a range of
flowers to various customers, most of which are florists in Boston and surrounds.
Kelley Wholesale Florists (Plate 11) is a wholesaler that specialises in non-
traditional flower products, importing products from around the world. RJ Carbone
was established as a distributor in 1953, and has since then expanded to three
locations in New England. The company stocks a range of flowers in its Boston
location, but also markets plants and florist sundries. All three wholesalers import
Australian product, although not as regularly as they would like. Kelley Wholesale
Florists and RJ Carbone import through an exporter based in Victoria.




        Plate 11 Kelley Wholesale Florist at the Boston Flower Exchange.

2. Winston Flowers

Winston Flowers has been in operation for over 50 years. The company has eight
flower shops in Boston and its surrounds, plus an internet operation. Each Winston
Flower shop has its own designer florist apart from other trained florists in store. All
stores are fitted to standards set by the main designers of Winston Flowers, who
use its design studio as a guide for all shops. Florists are continually trained by their
designers in order to keep them up to date with current trends and changes in the
market.

Its main office also houses a large workshop where its internet arrangements are
made (Plate 12). The location also has a large warehouse which stores furniture
and other decorations that are used for its shops and any events it may cater to. In
addition to this, Winston Flowers also has a gourmet food section, which it has
recently added to its range of services.




                                        - 14 -
The company imports its own flowers, largely due to its ability to handle and
process large volumes. However, it also partners with other importers when it
requires smaller amounts of special flowers, such as Australian natives.




                Plate 12 Winston’s workshop

Winston Flowers in Boylston St. caters to upmarket clients, from corporate orders to
the wealthy residents of downtown Boston. The hotels that surround the shop are
its major clients, including the Four Seasons Hotel in the same street. According to
the concierge of the hotel, Winston Flowers are a very good florist and have always
supplied the hotel with all its flowers. Winston Flowers at Boylston St. also has a
steady clientele of students who purchase smaller bouquets. As part of the Winston
chain of shops, the Boylston St. shop’s interior design is consistent with the
Winston standard – very stylish (Plate 13).




                   Plate 13 Winston’s display at its studio

3. Ilex Designs

Ilex Designs is owner by Andrew Anderson and Carol Sharp, who both have
backgrounds in design. Located in the Boston’s South End, Ilex is surrounded by
upscale restaurants and shops that are popular with young professionals. The high-
end florist caters to residents and corporate customers who often prefer
contemporary designs. Some of its corporate customers include retailers such as
Marc Jacobs and Wish Clothing, and businesses such as Sotheby’s, Kitchen Living
and The Boston Design Center. The florist also specialises in weddings and event
work. The florist purchases its flowers from Boston’s flower market everyday. Ilex
stocks ‘special’ flowers such as peonies, hydrangeas, orchids and high end roses,
with arrangements priced from US$65. There were no Australian native flowers at



                                      - 15 -
the time of the visit. According to Maryanne, florist, Australian native flowers are not
often used in their shop although she is interested in them (Plate 14).




            Plate 14 Ilex florist Maryanne shows how Dianella can be used.

4. Boylston St. Florist

Boylston St. Florist was established 28 years ago. Owned by a family of Greek
descent, the florist prefers traditional flowers and designs. According to the owner,
the shop has a mix of clients, owing to its location of being close to hotels, offices
and a park often frequented by residents. Their clients prefer bouquets that can be
easily placed in a vase rather than arrangements in baskets or boxes. The owners
purchase their flowers from the markets, visiting a two to three times a week
depending on their needs. The shop also stocks fruits and food items, as a result of
competition arising from temporary flower stalls at the Boston Commons park.

5. Louis Barry Florist

Louis Barry has been serving the Boston market for over 25 years. Louis Barry is
located in Boston’s Prudential Tower that houses a shopping centre, the Sheraton
Hotel and offices (Plate 15). With universities and offices close-by, the florist caters
mostly to employees and students who walk through nearby shops and food court.
Customers are usually between the ages of 20 and 40, who purchase mostly for
gifts. There are no Australian native flowers in stock – majority of the flowers are
traditional, such as roses, chrysanthemums, tulips and lilies. Gypsophila is the most
used filler. According to the florists, the shop holds 25 per cent more than its usual
stock because of the Thanksgiving season, one of the United States’ biggest flower
consuming occasions. The shop employs three full-time employees. The shop
sources its flowers from the Boston market, purchasing everyday.




                   Plate 15 Louis Barry florist




                                       - 16 -
    RESULTS: CANADA
A snapshot of Canada2

    Domestic production          A$668 million (1996)

    Production by state          Quebec, Ontario and British Columbia (85% all together)

    Production by      flower
                                 Roses (52%), chrysanthemums, Alstroemeria, tulips, etc.
    type (volume)
                                 12, 412,000 sq. m. under production, with most in green houses or glass
    Area to flower production
                                 houses
    Exports                      A$23 million

    Exports of all flowers, by
                                 USA: 99.9%
    country of destination

    Imports                      A$70.3 million (1997)

    Imports, by country of       Colombia (53%), US (15.1%), Ecuador (12.7%), Netherlands (6.6%),
    origin                       Others (2.5%)

    Imports, by flower type      Carnations and roses

    Consumption                  A$2.54 billion

    Per capita consumption       A$8.6 (1997)

                                 Highest purchasers: 25-45 yrs, under 25's are smallest purchasers.Higher
    Buyers                       incomes and educational attainment correlate with purchases. Both male
                                 and female are regular purchasers of flowers

                                 Mostly for occasions or events; funerals (20%), holidays (19%), get well
    Reasons for purchases        presents (10%). Increasing purchases as a result of promotions and
                                 impulse buying.

                                 Demand varies based on holiday flowers are bought for. Red and white
    Colour preferences
                                 seem to be the dominant colours.

                                 Florist shops, toll free ordering, on-line computer services, kiosks,
    Retailers, purchases by
                                 supermarkets. Direct sales to public is popular, followed by florists, and
    type
                                 mass market chain stores


                                 Four producer owned and operated flower auctions - three in Ontario and
                                 one in British Columbia. Substantial volumes go through other marketing
    Major       distribution
                                 channels direct from growers, shippers, import brokers and wholesalers to
    channels for fresh cut
                                 retail florists and mass marketers. Auctions, through importers and
    flowers
                                 wholesalers (50%), direct sales from Canadian growers to retailers, and
                                 grocery stores


    Australian flower exports    A$570,000 (90 tonnes) in 1997/98

    Flower type                  waxflowers and other Australian native species

                                 Through importers or distributors, who sell to wholesalers. Some sales
    Method of sales
                                 done through flower auctions.

                                 Flowers purchased for own use are often bought at the supermarket or
    Market characteristics
                                 from street vendors

    Quality requirements         Florists carry the highest quality flowers




2
    McKinna (2001) and James (1999)




                                                   - 17 -
Vancouver
1. Florimex Vancouver

Florimex is an importer, seeing themselves as providing a buying service for the
fresh cut flower industry. Their customers include bouquet makers, wholesalers and
a wide range of florists. Individual clients can purchase one box, or 10,000 boxes.
They purchase what the customer wants, and often work with their larger clients to
plan what products to stock for a certain period in time. Programs are often planned
with bouquet makers and large retailers, where they are able to work on pricing and
choice of products. All products are pre-sold, none of their products are stocked
and offered on the day. For this reason, Florimex prefers suppliers who are able to
provide mixed boxes or create mixed bouquets themselves, as this lessens
handling and therefore reduces costs throughout the chain. The company ensures
that product stays in their premises for the shortest time possible. Customers order
between Monday and Thursday. Products arrive at the airport on a Sunday and are
with their customers three days later.

The company handles Australian product, but have had difficulties with purchasing.
The most common problem with Australian product is consistency in terms of
quality and pack outs, and Florimex believes that Australian suppliers are one of
the worst in the world in terms of getting pack outs right. In addition, product takes a
long time to get to Vancouver. Australian product is often shipped out of Melbourne
or Sydney and arrives Miami. This is then transported by truck to Vancouver, which
takes a long time and product quality may suffer in the process.

2. Kirby Floral Inc.

Kirby Floral is a cut flower importer and wholesaler that has been in operation since
1980. The company has 25 employees, and Kirby prides in its ability to maintain a
loyal employee base. The company provides customers with a large range of
products that are sourced from all over the world. Most of their suppliers are
growers, with the exception of exporters in selected countries such as Australia.

They supply only from one Victorian exporter, and Ken Kirby believes that this
exporter provides consistent quality product. Their relationship with this exporter
remains strong due to their open communication. Wax flower is the most important
Australian native product, but Kirby Floral also imports a range of products. Cherry
grass, leucadendrons, preoteas, banksias and steel grass are also often imported
from Australia.

Majority of their customers are retail florists – from high end florists to corner stores
who stock flowers. Smaller wholesalers, those who cannot import themselves,
comprise 40 per cent of their customer base. In addition some of their product is
marketed through the auction market, but only a small amount. The company does
not market to chain stores, as he prefers having personal relationships with his
clients. He also wants clients to prioritise quality above pricing, which most chain
stores do not adhere to. Like with his suppliers, Ken Kirby values good relationships
with his customers, and prioritises clients on the basis of their relationships and
consistent large volume purchases.




                                        - 18 -
3. Meyer Floral Company

Meyer Floral Company was established 20 years ago, and is owned by Bob Meyer.
The company imports once a week from all over the world. During high season
(July to November), the company imports from Australia once a week. Product is
also purchased from Californian suppliers twice a week. Locally produced flowers
are purchased from the UFG auctions. The company markets their products to local
florists who come to their store to choose product themselves.

4. UFG Auctions

The UFG Auctions is a grower-owned auction market, handling mostly locally
grown flowers from farms in British Columbia. The auctions are owned by the
United Flower Growers Cooperative. There are three clocks in the building, with the
auction room at the time of the visit holding approximately 200 seats for buyers. Cut
flowers are sold through clocks A and B, while pot plants are sold on clock C.
Majority of product sold are traditional flowers – roses and chrysanthemums were
widely available, as well as tulips, lilies and alstroemerias. There were some
Australian natives available – kangaroo paw, wax flower, rice flower and eucalyptus
foliage. However, these products were all sourced from the United States. The
product is displayed through automated trolleys, with auction masters present to
indicate which product is on sale.

The auction is based on the Dutch system, with prices starting at a high target price
and moving down to prices accepted by buyers (Plate 16). Buyers are provided
information such as minimum lot purchases, quantity of flowers per lot, and number
of lots remaining. In addition, the display also contains information on upcoming
products, providing grower numbers, product names and descriptions, quality
grades, size and colour. Wholesalers and major suppliers have booths in the
auction room, where they can monitor sales.




                        Plate 16 The UFG flower auctions




                                      - 19 -
5. Scentrepiece Flower Market

Across the road from Thomas Hobbs is Scentrepiece Flower Market. Unlike
Thomas Hobbs, Scentrepiece has a more casual feel, with loose flowers in buckets
giving their customers a ‘market’ environment (Plate 17). Scentrepiece caters to
walk-in, corporate, wedding and event clients around the area. The shop prides
itself in its popular list of clientele, one of which is Bill Gates.




                Plate 17 Scentrepiece Flower Market

Scentrepiece buys product through the auctions most of the time, where they
source local product. However, they also buy from importers especially for event
work where they need a reliable supply of product. According to Ghada Malek,
manager, their florists like trying new products all the time, and visiting an importer
provides good opportunities to see a large range of products up close.

6. Thomas Hobbs Florist

Thomas Hobbs florist can be found on West 41st Avenue in Kerrisdale, a shopping
precinct dominated by travel agents, banks and homeware stores – a true sign of
wealthy clientele. Thomas Hobbs is considered an establishment in the area,
having been in operation for 30 years. Inside is a buzz of florists working frantically
on numerous flower arrangements for an event. Ready-made arrangements adorn
the shop, along with pot plants in ornate containers and other home décor (Plate
18).




                       Plate 18 The Thomas Hobbs interior



                                       - 20 -
The shop caters to both business and residential customers, with some clients
walking in every day to purchase flowers. Thomas Hobbs stocks imported and local
flowers – purchasing through auction markets and importers. When asked about
Australian flowers, Maureen Sullivan, owner, commented that they need to be
promoted for Canadian buyers to be familiar with them. At the moment, waxflower
is still their biggest Australian product, with nothing new to replace it just yet.

7. Kips Market

With a mix of everything from everywhere around the world (as most Asian grocers
usually have), Kips is an illustration of the multicultural society that Vancouver has
become. Kips Market is located in a residential area at the corner of Yew and York
St., servicing mostly apartment dwellers who walk past the shop everyday. Kips
also caters to business clients, with Collin (son of owner Laura) often making 10
deliveries per day.




                Plate 19 Kips Market in Vancouver

Acknowledged by local wholesalers as one of the flower shops with the highest
turnovers, Laura and Collin buy from the flower auctions and wholesalers three
times a week. The shop stocks mostly seasonal flowers because they are cheaper,
and therefore easier to sell at lower price points. A small, ready-made bouquet of
gerberas with sprigs of waxflower sells for CA$8.99.

8. Granville Island Public Market

Opened in 1979, the Granville Island Market is alive with locals and tourists who
come to eat, shop, browse and take in the Vancouver lifestyle. Food, vegetables,
fruit, home wares and crafts abound – including flowers. At the market’s east
entrance you will find Granville Island Florists – and you can’t miss it with the large
volumes of flowers it has in stock. V&J Plant Shop can also be found on the other
side of the market, again full of flowers. However, V&J not only sells flowers, it also
has a nursery attached to the shop.

Both florists do event work, but their major customers are locals who often come to
the markets after work or during weekends. Customers can pick up flowers along
with their regular fresh produce shopping. Fruits, vegetables, herbs and all forms of
wonderful food ingredients can be found in the markets, and what better way to top
it all off than with a fresh bunch of flowers.




                                       - 21 -
Montreal
1. Sierra Flower Trading

Sierra Flower Trading is a flower wholesaler that was established in 1986 in
Montreal. The company is now the biggest wholesaler in Eastern Canada, with
another office in Ontario. The company sources products from 80 farms in 12
countries. Sierra markets their products to wholesalers and chain stores. Although
they do not market to florists, Sierra assists its customers in marketing flowers to
florists and consumers through the Sierra Flower Finder website, where growers
and customers logos and information are made available.

Sierra also has a bouquet operation – producing and delivering bouquets to their
customers. The company provides a five-day guarantee to consumers for all its
bouquets. However, in order to do this effectively, they have to use the right
products and work with the right customers to make sure that the bouquets are
handled appropriately.

Flowers are often flown in via Toronto. Sierra Flower Trading tries its best to
maintain the cool chain throughout transport and has an employee responsible for
monitoring the cool chain for all products handled by the company. Problems have
been encountered with logistics in importing Australian flowers, and the company
has tried to resolve this issue by working with several members of their supply
chain. All product from Australia are shipped out of Sydney, and the freight
forwarder in Sydney ensures that product is pre-cooled and leaves in the right
temperature. This was an agreement that Sierra and their freight forwarder made in
order to ensure that flowers arrive at the best possible condition. Temperature
loggers are used throughout the flight which provides the whole supply chain with
information on the product’s environment throughout transport.

Sierra Flower Trading is promoting the use of information management systems
across its supply chain through bar codes. This information, ideally, starts with the
grower and is made available all the way throughout the chain to the retailer.
Growers in South America have adopted this system quite well, however, smaller
growers such as those in Australia are more hesitant in taking on this system. In
addition to this, Sierra uses its website as a communication tool for its suppliers and
customers. Customers are encouraged to visit the website to see what products are
available and who supplies them. On the other hand, suppliers are encouraged to
promote their products and their company through the website on a fee basis.

2. Fleurexpert

Fleurexpert (Plate 20) is a customer of Sierra Flower Trading. Although a
wholesaler, Fleurexpert also imports products themselves, mostly from Holland.
The company services florists in the Montreal area. Customers can come to the
shop to purchase products themselves, although the company also has a truck that
goes around selling and delivering products. Fleurexpert conducts marketing
programs, promoting the use of certain products to customers by featuring photos
in the shop and through email. At the time of the visit, the wholesaler had Christmas
bush and steel grass in stock. Australian flowers are not a primary product as they
are not popular enough.




                                       - 22 -
                  Plate 20 Fleurexpert

3. Fauchois Fleurs

Fauchois Fleurs is a flower shop owned by the Fauchois family, located in St.
Denis, in the heart of Montreal. The shop caters to local businesses in the area and
customers purchasing for home use. The shop stocks a large volume of flowers,
with ready made arrangements available. With the range of product available, it can
be observed that Fauchois Fleurs also caters to clientele that purchase for gifts. At
the time of the visit, the shop had Christmas bush and wax flower in stock (Plate
21). According to the florists, these two products are easy to use and are often
stocked at this time of the year. However, they both did not know where they came
from and did not know that they were Australian flowers.




        Plate 21 Fauchois Fleurs had Christmas bush and wax flower in stock




                                      - 23 -
 DISCUSSION
Can the established market research methodology employed in
Japan be transferred for market research in North America?

The study has found that utilising a supply chain approach to market research is
still an ideal strategy in collecting data in North America, as it has been in Japan.
However, there are some differences. Japan has a clear delineation of roles when it
comes to importers and wholesalers. Importers focus on importing flowers, while
wholesalers act as middlemen between importers and florists. The auction houses
in Japan also have a very clear role in the supply chain.

On the other hand, the supply chain in the United States and Canada is different.
Importers may sell their product to other wholesalers, but can also act as
wholesalers, marketing or selling products directly to florists from their own sites, or
from a central wholesale market. The supply chain in North America is not as clear
as it is in Japan – an importer has various ways of selling their products, making
‘tracking a product through its supply chain’ not as easy as it is in Japan. A product
from one firm may end up with a florist through various channels. In conducting
market research in the United States and Canada, it is important to understand this
condition in order to fully grasp the complexity of needs of the various customers
through the chain.

How are Australian native flowers marketed in the Los Angeles,
Chicago, New York, Boston, Vancouver and Montreal?

All Australian flowers to North America are exported through agents in Sydney,
Melbourne, Perth or Brisbane. However, once it reaches the United States or
Canada, product will be distributed through various channels depending on the
importer. This research has uncovered these channels, and figures 1 and 2
illustrate the supply chains for the United States and Canada.

The figures show that there are various ways to which Australian product can reach
consumers. Each firm interviewed catered to a certain segment of the market –
very rarely do they try to cater to everyone. This segmentation has been the result
of the changes in the roles of firms in the United States and Canada. Importers are
now able to market directly to retailers, while wholesalers and larger retailers are
now able to source directly from growers overseas. This has been brought about by
a number of changes:

   Changes in grower operations and cost structures, where the need to diversity
   and lower labour costs allow growers overseas to provide boxes of mixed or
   arranged products.

   The growth of larger retailers, such as supermarkets and florist chains, who are
   able to purchase directly from growers, resulting to the lack of need for an
   importer and wholesaler. Changes in mass market retailing occurred in the 80’s,
   where supply and distribution was consolidated to reduce costs.

   The response of a number of firms as a result of the above changes in order to
   remain competitive. Importers have changed the way they operate in order to
   remain profitable, and some have found marketing to retailers and developing
   bouquet operations as a solution.

These changes present opportunities to adjust according to the market that a firm
caters to. A firm’s choice of supply chain partners is critical in determining which
segment of the market their product will end up in, therefore determining price and
quality requirements.



                                       - 24 -
       Los Angeles

                 LA Flower Market
                                                   Florists and other retailers
                          Wholesaler
      Importer
                                                   Florists and other retailers


      Chicago


                         Chain stores
      Importer
                          Bouquet makers




      Importer             Wholesaler              Florists and other retailers



     New York

                          Wholesaler             Florists and other retailers

      Importer

                          Bouquet makers

        New York Flower Market

       Importer            Florists




       Boston

                   Boston Flower Exchange

                          Florists and other retailers
      Importer
                          Chain stores




Figure 1 Channels for Australian native product in Los Angeles, Chicago, New York
and Boston




                                               - 25 -
          Vancouver

                         Wholesaler                Florists and other retailers

         Importer       Chain stores

                        Florists and other retailers

                          Flower auction               Florists and other retailers




          Importer       Florists and other retailers




                       Wholesaler             Florists and other retailers

        Importer       Chain stores

                        Bouquet makers


Figure 2 Channels for Australian native product in Vancouver and Montreal

What are the perceptions of Australian native flowers by various
customers along the supply chain?

Australian native flowers are not common flowers in the United States and
Canadian markets. Traditional flowers, such as roses, carnations and
chrysanthemums, still dominate, and are often available at affordable prices.
However, products such as wax flower are no longer unique as these are available
all year round from a variety of sources. Competition from South American product
is fierce. Although unable to provide new varieties of wax flower and kangaroo paw,
cut flowers from Ecuador and Peru compete on the basis of price. Quality is
comparable; therefore the customer is left to decide on the basis of price and their
need for a differentiated product. Most customers prioritise price, especially those
who purchase large volumes of the product. As with most new varieties of cut
flowers, it is only a matter of time before competitors are able to take hold of them.
Therefore, the marketing of new products must be planned and implemented with
care to target customers who value new varieties and are willing to pay a premium
for such.

Still, Australian grown product are still considered novelties in that suppliers are
able to provide a wide range of product that is often not available elsewhere.
Banksias, boronias and different types of foliage can be sourced from Australia and
nowhere else. These products are considered ‘different’ but are not often seen as
worthy of fluctuating and high prices. The high and often fluctuating prices of these
products serve as a barrier in maintaining a customer base that regularly purchases
Australian grown product. In addition, quality is not always consistent. The reasons
behind this may vary – growers not being vigilant enough in providing consistent
product, or distribution systems fail due to the long distances and time required to
get the product to market. Still, there are firms in both Australia and North America
who see the value of Australian product, and the value that working together brings
in providing customers with a valuable product and service.




                                          - 26 -
 CONCLUSIONS
The United States and Canadian markets are important markets for Australian
growers, and there are opportunities to develop these markets further. This report
has shown that through market research, Australian suppliers are able to
understand their market better, which may result to the identification of
opportunities for further development. These opportunities, as identified in this
report, may arise from identifying the right segments of the market to work in, or
through better understanding what limitations their products face in getting flowers
to consumers.

This research therefore concludes the following:

1.      Market research conducted using a supply chain approach is applicable in
        the North American markets. It provides an advantage of truly
        understanding the various issues that different types of firms face in
        marketing Australian product. The methodology used in conducting market
        research in Japan is transferable and it is recommended that this
        methodology be continually used in other markets. However, caution must
        be taken in doing so, as each market has its own characteristics, and firms
        in the industry react differently to data being collected from their suppliers
        and customers due to the competitive nature of the industry.

2.      The supply chains for each city differ – some cities have central flower
        markets which serve as a common location where numerous customers
        meet with a large number of suppliers, as in the case of Los Angeles, New
        York and Boston. Australian flowers follow various paths depending on the
        firms that handle them, which results to the product entering various
        segments of the market. The challenge for firms in the industry is to identify
        which segment suits them best, and whether or not they are able to meet
        the requirements of this segment and the firms that operate within them. As
        this research has also shown, each flower retailer or customer has its own
        needs based on its styles and preferences, and firms must understand
        these needs in order to compete effectively in the market.

3.      Australian native products are seen as different and sometimes unique.
        However, there are products that are perceived as common, such as wax
        flower. This is largely due to its availability and the ability of firms in North
        America to source them from various suppliers throughout the year. For this
        product, Australian suppliers need to compete on the basis of price and
        consistently better quality product. On the other hand, other products not
        produced in countries outside Australia still provide an advantage in terms
        of differentiation. While these products are not meant to be targeted for
        mass market retailers due to their small volumes, they are able to be
        marketed better because of being unique. Australian suppliers need to
        ensure that for these products to maintain their advantage, consistently
        high quality at reasonable prices need to be achieved.

The North American market for Australian native flowers can be grown, but not
without significant marketing efforts made by firms who are serious about meeting
their customers needs and wants. It is a market that is highly competitive, largely
due to its ability to source product from various suppliers. Firms in this market are
coping with this level of competitiveness by changing the way they do business –
their suppliers must do the same. Australian suppliers to the North American
market now face the challenge of adapting to the changes that their customers are
going through.




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 REFERENCES
James, K. (1999). A study of the Canadian flower market. Barton, RIRDC.

McKinna, D. (2001). A study of the USA and Canadian flower markets. Canberra,
Department of Industry, Science and Resources.

Pohmer, S. (2004). U.S. flower buyers: What do we know about them?
Presentation at the Seeley Conference, Cornell University, Ithaca, NY.

The Flower Export Council of Australia Inc (1998). A study of the USA flower
market. Barton, RIRDC.




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