A digital revolution in Dutch auction rooms has left its flower sector blooming, making it even easier for buyers to purchase flowers.
“Digital auctions are an important development and are growing in popularity,” says Jonathon Read, UK director for the Flower Council of Holland. “Like a typical Dutch auction, the price falls, so the skill of buying is knowing when to press the buzzer. The price is therefore led by the supply and demand on that particular day.”
The country’s largest flower auction is Bloemenveiling Aalsmeer. It controls a market share of 45% and sells nearly 20 million plants every day. Last year it traded cut flowers worth £1,009m.
“Around 10% of the flower turnover is realised on the basis of digital information without the buyer being physically present in the auction rooms,” says Aalsmeer.
The growth in digital auctions is benefiting UK supermarkets, the main buyers of Dutch flowers. By removing the need to take flowers to the auction room they can be delivered straight from grower to buyer in better condition.
Some 85% of auctioned flowers in The Netherlands are sold to exporters, with the UK a big market. “Britain is The Netherlands’ most important destination after Germany,” says Read. “It buys 8,000-9,000 types of flowers a year and the country is very dependent on the Dutch for supply. Three out of every five flowers sold in the UK come from The Netherlands.”
Retailers including Tesco, Sainsbury and Marks and Spencer purchase flowers from the country. But their huge buying power has caused pressure on flower suppliers, says Read. “The importance of the major supermarkets to The Netherlands’ flower sales growth over the past 10-15 years has become a big issue in the country.”
But he believes the category will remain an important one, not only in terms of margin but psychologically too.
“Flowers make a statement, providing a blaze of colour and instantly making customers feel welcome when placed at the front of a store. They get a good customer reaction and good margins.”
He also believes the UK will continue to be a major destination for Dutch flowers. “Collectively, the market has sales of £1.5bn a year and is three times the size of Coca-Cola in the UK.”