17April 2020. The Crash of the $8.5 Billion Global Flower Trade. The flower trade is a miracle of modern capitalism. A chain of cold storage starts with stems being picked in places as far-flung as Africa, the Middle East, and South America, then packed into refrigerated trucks, driven to refrigerated planes, and flown to Amsterdam to be auctioned off. They’re then repacked into more cold trucks and planes and delivered to supermarkets, florists, and bridal bouquets across Asia, Europe, and the U.S.
The auctions are run by a cooperative, Royal FloraHolland, formed a century ago by a group of growers who met in a pub and devised a system to better control how their flowers were sold. Royal FloraHolland now runs four auction sites that handle the bulk of the global trade. Its facility in Aalsmeer, a concrete warehouse larger than 75 soccer fields, is one of the biggest buildings in Europe. Each day before sunrise, workers fill it with truckloads of chrysanthemums, roses, and tulips. Buyers assemble in rooms filled with computer screens, where photos of each lot are displayed.
March 16, was the “blackest day” at the auctions, says Fred van Tol, international sales manager at Royal FloraHolland. Growers were calling him in a panic. “Those are difficult phone calls,” he says. “Their life work is about to implode.”
Rose prices dropped to €0.07 (8¢) a stem that day, down 70% from their price a year earlier. Traders struggled to make any deals. At the Naaldwijk auction site, outside The Hague, workers tossed cartful after cartful of wrapped bouquets and potted houseplants on the floor so small tractors could scoop them into dumpsters. The auction house could stabilize prices only by capping supply at 30% of last year’s level.
Before the pandemic, 42 of the cargo flights arriving at Aalsmeer each week came from Kenya,
whose climate allows roses to grow year-round. The East African nation ships about $1 billion worth of flowers a year, making it Europe’s biggest supplier. That figure represents tenfold growth since the 1990s, as investments in infrastructure made large-scale exports possible. More than 150,000 people now toil on Kenyan flower farms, many of them women. The work is grueling, with long shifts in steamy greenhouses, and laborers earn as little as $70 a month, but it’s a steady paycheck in a country where those can be hard to come by.
Billy Coulson employs 1,200 people at Nini Flowers, one of many farms in a valley north of Nairobi, near Lake Naivasha. Giraffes sometimes wander up to his 50 greenhouses, from which he usually exports 2.2 million stems each week. He offers nine varieties of roses, pink and orange and yellow and red, selling mostly to big European supermarket chains such as Morrisons. Coulson, 56, was raised in the U.K. and went to work for Kenyan flower farms after serving in the infantry of the British army. He lives on-site with his wife and three children.
His costs, though, haven’t fallen. He still has to buy chemicals, fertilizer, and water, and to pay his workers to harvest the flowers, chop them up, and pile them for disposal. He’s cut his staff to half time—two weeks on and two weeks off. He estimates he’s losing €300,000 ($327,930) a month, a level of disruption far worse than the Kenyan postelection violence and global financial crisis of more than a decade ago or than the Icelandic volcanic ash cloud that grounded many cargo flights in 2010.
▲ Dumping roses at Nini Flowers, a farm in Naivasha, Kenya.
VIDEO: NATALIA JIDOVANU
The auctions are run by a cooperative, Royal FloraHolland, formed a century ago by a group of growers who met in a pub and devised a system to better control how their flowers were sold. Royal FloraHolland now runs four auction sites that handle the bulk of the global trade. Its facility in Aalsmeer, a concrete warehouse larger than 75 soccer fields, is one of the biggest buildings in Europe. Each day before sunrise, workers fill it with truckloads of chrysanthemums, roses, and tulips. Buyers assemble in rooms filled with computer screens, where photos of each lot are displayed.
Rose prices dropped to €0.07 (8¢) a stem that day, down 70% from their price a year earlier. Traders struggled to make any deals. At the Naaldwijk auction site, outside The Hague, workers tossed cartful after cartful of wrapped bouquets and potted houseplants on the floor so small tractors could scoop them into dumpsters. The auction house could stabilize prices only by capping supply at 30% of last year’s level.whose climate allows roses to grow year-round. The East African nation ships about $1 billion worth of flowers a year, making it Europe’s biggest supplier. That figure represents tenfold growth since the 1990s, as investments in infrastructure made large-scale exports possible. More than 150,000 people now toil on Kenyan flower farms, many of them women. The work is grueling, with long shifts in steamy greenhouses, and laborers earn as little as $70 a month, but it’s a steady paycheck in a country where those can be hard to come by.
Billy Coulson employs 1,200 people at Nini Flowers, one of many farms in a valley north of Nairobi, near Lake Naivasha. Giraffes sometimes wander up to his 50 greenhouses, from which he usually exports 2.2 million stems each week. He offers nine varieties of roses, pink and orange and yellow and red, selling mostly to big European supermarket chains such as Morrisons. Coulson, 56, was raised in the U.K. and went to work for Kenyan flower farms after serving in the infantry of the British army. He lives on-site with his wife and three children.
Business was strong in February, he says. His first cancellations came in early March, even before Kenya saw its first Covid-19 case. “We knew there was a problem in China,” Coulson says. “We had no idea of the scale.” By mid-month his sales had dropped by more than half.
“It’s a black hole,” he says. “If this goes on for three or four months, we’re faced with the prospect of closing down.”
Very interesting article! Thanks a lot
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