Introduction
There are a good number of potential market streams for cut flowers, perhaps more than you originally considered. This week’s interview covers cut flower market streams, from selling to distributors to florists to designers. The pros and cons of each are weighed and even compared and contrasted to help you find the best fit for your farm.
Selling to Wholesalers
When you consider wholesaling flowers what comes to mind and is it possible at the scale you’re operating at? (4:20)
Yes, if we scaled up our production of particular products it would be possible even though we only grow on ½ an acre. You want to consider your most profitable and popular products first. Perennials like peonies or and large blooms like dahlias that demand a good return per stem are a good way to go.
You can contact your distributor to find out what the demand is like, there are some flowers that don’t ship well, for example. Dahlias don’t ship well and in MD distributors buy all local sunflowers.
If you are growing a single product, one flower variety, on your farm, will your production and therefore your income come in all at one time during the year? (7:30)
Yes. You can stagger it with different products during different seasons. You could grow tulips during the spring and then move into dahlias during the summer. You would need more land to keep these products in production.
If you were to consider the numbers when approaching a wholesaler with a product like a sunflower, how does that look compared to a direct to consumer model? (8:30)
First, we would consider what specific kind of sunflower are they interested in. The size of the head, the color or even the specific variety. We would get into a discussion with them about that, and then also specifics about quantities and delivery dates. It’s a lot of eggs in one basket, and so with that comes a lot of risk. What’s guaranteeing that they are going to take those flowers once they are harvested months down the line? We would approach multiple wholesalers to have backup.
As for the economics, we would negotiate a 60% margin per stem. Meaning if it retails for $1 then they are paying us 60 cents a piece. To meet our income goals we would increase what we produce to make up for that decrease in margins vs. selling retail. Our production cost is roughly 15 cents per stem, but that cost would come down as we increase production of that product.
Are you considering selling wholesale at the moment? (11:45)
Other smaller-scale flower farms in the area that we’ve talked to who have more experience wholesaling flowers than we do have expressed they’re not keen on it to us. We think you should also consider the demand in your area carefully. We are located near D.C. and there are a number of wholesalers close by. They have also approached us recently with inquiries so demand for local flowers seems to be growing. They would be happy to put “USA Grown” on their packaging.
Wholesale to Florists
What are your thoughts on selling to local florists? (15:00)
It’s an excellent option if you can find the right florists, meaning the ones that are willing to use local product. You can discern if they do by searching in your area for florists and viewing their website. Many florists are part of a network called Teleflora, and they only use product from within their distribution channels.
Is there a difference between local florists and designers who only do weddings? (17:45)
Most flower shops will design for events, although it is not their specialty. Floral designers (aka wedding florists) don’t have a store-front and only do events, most of the time only weddings. Flower shop florists are more flexible in the product they will take. Wedding designers are looking for flowers for their clients, meaning specific colors at the specific time of their event. Wedding design florists are like the chefs of the flower world, and each of them have a large or small menu, so it helps to contact them in the offseason like winter to see what their demand will be like for the upcoming year to try and anticipate what product they’ll be looking for.
Are you starting to see designers and customers requesting local flowers? (21:15)
Maybe 10-20% of our couples who come to us because we are a flower farm. About 30-40% request flowers out of season and that we don’t grow, and they aren’t concerned with seasonality or locally grown. The remainder think of our flower farm as a perk and will have us use our flowers during season but still want some focal blooms that we don’t grow.
Are you currently selling to local florists? And what results are you looking for that would make you continue to ramp up this sales stream? (23:30)
We just started this year. We have enjoyed it so far. If you are going to push a lot of product into this sales stream you need to market quality product as that is what they are used to receiving. Although your flowers are often fresher than those from wholesalers, those other growers have been producing often for generations so they have excellent quality, stem length and so forth, that’s what you’re competing against.
You also need to produce the product consistently and keep communication lines open. Give the customer a fresh sheet in their inbox at the same time every week and respond to their questions and requests quickly so they can come to depend on you. They can get more product from a wholesaler year-round, so you have to find ways to stand out. Wedding florists like to purchase from as few vendors as possible since it’s a lot to manage. Having a healthy product offering will help. Lastly, seek out florists who are interesting in supporting local farms, most especially when you are getting started. You need to have dialogue with your florists so they understand when you have a weather event or things just take a turn for the worse and flower quality declines so there’s understanding and expectations can be managed. As you get more experience you can brave selling to more florists who are not going to be as forgiving.
Selling In-House
One of your market streams right now is selling to yourself. What does that look like? (31:00)
We have separate bank accounts and bookkeeping for the farm and the design studio. The farm sells products at the same cost we sell to other florists. We need to do this to accurately track earnings and be aware of how the farm’s income is playing out. We can plan the farm around the weddings we know we have upcoming so we are growing the right colors. We can also take what product the farm has any given week without the friction that sometimes comes with last-minute changes to availability that needs to be navigated when selling to other florists.
We treasure this farm to florist relationship. There is something truly special about being able to walk out to the field and pick what flowers we want that week from the farm. And seeing your product you are growing go from field all the way to an event is very rewarding.
What percentage of your business is the farm selling to the design studio? (43:00)
Right now it’s only 10% since we are just getting started but the goal is to increase this number considerably soon. We are aiming to hit 30-40% within the next year, but this number can change as the demand from the brides shifts year to year. It all depends on the number of events we are doing as well. Some years we do 20 weddings but last year we did 40. And the size of those weddings and how much local product we can use in them is a moving target. But roughly 30% is our goal.
What are the margins like when comparing farmer’s markets, your other main sales outlet, to the farm selling to the design studio? (46:30)
We sell about 20% to the studio with 80% being sold at the farmer’s market. We are looking to increase the numbers in selling to the studio so that these percentages are more even, so that it’s more of a 50/50 split.
What are some of the things you need to think about when considering adding on a design business to the farm? (50:00)
We would encourage looking at each as two separate businesses. The design studio as one and the farm as the other. And then having one person at least managing each of them. They are each a lot of work and need their own attention if you are going to grow them. The clients, for example, just in answering emails and phone calls can take up an entire day a week in the design business. You can learn how to design by researching popular design studios and taking a course with them for a couple thousand dollars.
You need to consider how large you want to grow your design business and what style of presentation you want to scale to. There is a large variety of clients available, those who are willing to spend $1,000 on flowers up through those who will spend $10,000+. Most farmers tend to sell to the lower budget client since they decide to add their design studio, or event sales, onto a pre-existing farm. We’ve done the opposite where we’ve grown our design studio separately and from the beginning of our flower farm, so it is actually more lucrative than the farm business and we capture more spendy clients. The business of the design studio can be as small or large as you want it to be depending on what you’re willing to invest and want to get out of it.
Farmer’s Markets
When you are designing a market bouquet vs. designing for an event like a wedding what are the biggest differences? (56:30)
A market bouquet only takes about a minute to make. There’s a lot more labor investment and skill required when it comes to making a centerpiece for a wedding. A centerpiece can take 20 minutes and the design must be elegant.
A market bouquet can also include just about any flowers you are growing on farm at any given time. There is a general recipe you want to stick to, where you include 2-3 focal blooms and then add a smattering of each of the other elements, mainly being greenery and filler, but even that is fairly flexible.
What are the cons of producing bouquets for a farmer’s market? (1:00:30)
There needs to be some value add in designing the bouquets. This takes some post-harvest effort. You won’t sell nearly as many bouquets if you just bunch some random flowers together and put them in a mason jar. At the same time, the design does not need to be complicated but should include about 10 different blooms to form an appealing bouquet. And then you need to have the sleeves available to wrap them in with a rubber band.
It’s not something easily done on your own. It’s a much faster process when you have two people designing the bouquets. One person putting the bouquet together and the second placing them in the sleeves.
Another large hurdle to overcome can be getting into a large enough market to sell the size of bouquet you’re looking to move. A bouquet that’s 20-30 stems and priced at $10 will sell anywhere, but if you are looking to charge $20-40 per bouquet you will need to go to a much more upscale market, which tends to be fairly rare and more difficult to get into.
Also, transporting flowers can be challenging. Bouquets cannot be stacked in crates like veges can in most instances. You can go vertical but need shelving and restraints installed in your van or box truck. They cannot be open to the air.
How do bouquets hold up at market? (1:06:00)
Better than greens, but they do need shade and cool water and some level of protection from elements like rain and wind. If you’re on the pavement on a hot and sunny day of 85F or more some will wilt and it is best if you make sure they never have direct sunlight on them. Cool water and removing spent blooms help presentation. You usually can make them last for entire market days.
What do you make off of a $10 market bouquet? (1:07:00)
Roughly $8-9. Expenses include seed, fertilizer, fuel, equipment and land, the rubber band and sleeve, and of course, labor. So it will vary a lot from farm to farm on how you manage a wide margin variable like labor, but for us, it’s kept to a minimum since we use tools like the paperpot transplanter, have minimal weeding and have the process of making bouquets down to a minute apiece. Flowers are very productive per square foot compared to veges so a small bed, 50ft, goes a long way.
Flower CSA
What are your thoughts on flower CSAs? (1:08:30)
It’s an attractive model if you are already producing market bouquets weekly. You would only need to produce an extra number of them and not have to pack a box or think about specifics about people’s diets. The limitation is that not a lot of people in America think about buying flowers every week. They buy more for occasions. So marketing may be challenging. It’s more relevant for sellers who are more rural and don’t have a city to sell into.
Conclusion
When deciding what market streams that work for your flower farm it’s all about context. What labor do you have available? Do you have someone on staff that can design with flowers or is willing to learn how? What margins do you need to make growing flowers lucrative given you fixed expenses like cost per square foot, land price, and principal equipment? There are as many sales outlets for flowers as for vege, including many we didn’t touch on like growing starts and potted flowers. It’s a multi-billion dollar industry in the US, where do you fit in it?
Listen to the Episode: