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COVID-19’s Impact on Wholesale Florists

COVID-19’s Impact on Wholesale Florists

A look at how the pandemic has taken a toll on the wholesale segment of our industry.

The coronavirus pandemic has impacted everyone, and the floral industry is no exception, with many in the field shuttering operations or facing uncertainty about the future. There have been rumors about wholesalers going bankrupt, whispers about those who have had trouble getting product to customers and many wholesalers freely admit they are just struggling overall.

“COVID-19 has been a major gut punch to the floral industry,” says Shelbi Shepherd, general manager of Floral Supply Syndicate, based in Camarillo, Calif. “We basically lost Mother’s Day, graduations, weddings and all other group events. Because many of the retail florists and growers are family owned and operated, COVID-19 has hit this industry particularly hard. Retail florists have lost their profits from the aforementioned functions, which flows down to the growers not having outlets for their products. In some instances, growers are having to convert their flower production to other crops.”

Those troubles caused Floral Supply Syndicate to temporally shut down some of its 18 locations, lay off staff and postpone its annual catalog for the first time.

Tim Dewey, a vice-president at DVFlora, based in Sewell, N.J., notes that companies in certain regions of North America and Europe experienced a rapid, unplanned decrease in sales demand over a 15-day period beginning during the second week of March. “In the Northeast, many companies had to cease operations due to state- mandated regulations,” he says. “The effect on some segments of the industry was nothing short of disastrous in the regions that experienced the strongest lockdown state-enforcement mandates.”

Being headquartered in New Jersey and serving the Northeastern megalopolis with three sales-and-fulfillment centers and 10 distribution centers, the negative impact to DVFlora’s customers was immediate in most regions because the company was forced to suspend service for a time in order to follow those mandates and, most important, to protect its employees during a time of panic and uncertainty.

David Torres, vice president of sales and vendor relations at DWF Wholesale Florist, headquartered in Denver, Colo., calls the current state “unprecedented” because of the complete disruption to the entire industry.

“Initially, we lost 75 percent of our revenue as well as 75 percent of our labor force,” he says. “But since then, we have become a more efficient company, our labor force is up to 65 percent of pre-COVID levels and our revenue increases with each passing week.”

Pat Dahlson, CEO of Los Angeles-based September | 2020 Mayesh Wholesale Florist, notes that the company was forced to shut down at the beginning, which meant throwing away hundreds of thousands of dollars in fresh inventory over a 48-hour period. “We laid off close to 90 percent of our people and took a two-week step back and realized we were unfairly singled out to cease-and- desist on doing business, and it was not right,” he says. “Our growers were hurting, and we pushed back with the mayor of Los Angeles and finally received the green light to operate out of our L.A. shipping division, and we have since reopened all of our 18 wholesale houses.”

Dahlson says there’s been a shortage of flowers because many Ecuadorian farms were forced to shut down, though Columbian rose growers have been operating almost close to normal. Still, in June, Mayesh was at only about 40 percent to 45 percent of last year’s numbers.

“There are few weddings and events happening because people are skittish, and I think there’s still a lot to come that we don’t know,” he says.

Molly Alton Mullins, executive vice president of the Wholesale Florist & Florist Supplier Association (WF&FSA), notes that wholesalers doing business on either coast were hit hardest, especially those heavy in weddings and events. Many wholesalers in the middle of the country have not been as hit as hard. “Some have even equaled or exceeded sales from last year, but most are about 75 percent to 80 percent of where they were,” she says. “Still, we had to cancel many of our events, and I worry about the long-term effects for next year and how quickly people will be able to rebound and join association events.”

Transportation Issues

One of the main issues facing the wholesale industry throughout all of this was how to get merchandise to customers. “Floral Supply Syndicate ships worldwide, and we have been able to keep our shipping department open and operating, utilizing limited staff to enable us to maintain proper staffing protocols,” Shepherd says. “Product is currently available, but refilling the pipeline when merchandise is sold has been a bit of a problem.”

Mullins says the supply chain out of South America has been slowed considerably, and she hears from her members every day about the difficulty in getting product. “It’s not always meeting the demand, especially the specifications that people are asking for with different types and varieties of cut flowers,” she says. “Once product gets into the U.S., the logistics have been OK, but getting the product to the wholesalers has been hard.”

Torres notes that overall production is down due to farms being affected and forced to reduce labor and stop harvesting. That has played a role in the difficulties of delivering product.

“The reduction of the labor force is still a challenge, but we are becoming more efficient by reviewing all our processes and cross-training all employees,” Torres says. “We continue to offer quality products from top growers and have worked with them to ease some of their financial burdens.”

As the pandemic evolved, Dewey notes the impact was felt at all of DVFlora’s farms—in South America, the U.S. and Canada—and that affected getting product to customers. “Most growers suffered huge losses of inventory as demand disappeared suddenly,” he says. “Another impact on the supply chain was the halt that occurred in flights from the production centers around the world. It became impossible for a month or so to get products from Holland, Italy, Thailand, etc.”

Dahlson adds that though trucks are running, there are inconsistencies on how big the commercial payloads are on commercial transportation with fresh cut flowers, so prices have gone up and supply consistency has gone “helter-skelter.”

“But we’re bullish on getting through this and making it to the other side,” he says. “I would encourage all of us in the industry to keep posting on social imaging and posting awareness of our industry.”

Challenges Abound

One of the challenges for wholesalers who operate in different locations is staying up to date with each state’s guidance. For instance, Floral Supply Syndicate operates in 18 locations in seven states and has had to stay abreast of the different restrictions and requirements in each area.

“The biggest challenge is the unknown,” Shepherd says. “That can be scary, but we have done our best to stay positive and take precautions to keep our employees and customers safe. Our team has always offered industry-leading customer service and a great selection of products. Even during this pandemic, we still strive for that.”

Scott Isensee, general manager of Portland, Ore.-based Frank Adams Wholesale Florist, says his company was forced to close for six weeks, and because employees were making more money being on unemployment, many didn’t want to return to work when allowed. “For the longest time, there were no social gatherings of more than 10 people, which means no large weddings or funerals, which impacts our sales significantly,” he says. “Sourcing fresh product has not been without its challenges, but we have managed to get everything we need.”

And remember, COVID-19 is not gone, and there’s still the possibility of more state- mandated stay-at-home orders for many in the wholesale business. “We hope our state can hold the line on COVID-19 and allow businesses to reopen,” Isensee says. “Much of it is not in our control, but we will do everything we can to remain a leader in the flower business in Portland. Compassion and communication with our employees have helped us rebound and look forward.”

All in this Together

Despite the struggles, wholesale florists remain a strong and determined bunch, and many are turning the tide. “Initially, we were able to provide delivery and curbside pickup,” Shepherd says. “We have since been able to reopen all locations with abbreviated hours and staff as dictated by local regulations. There have been many disruptions in supply lines, but we have worked diligently on inventory control and allocations to make sure our customers canget what they need. We are moving in the right direction now though: Our locations are open, and we are bringing people back.”

Torres expects to see a steady climb in business in the months ahead as well as more opportunities to grow. “We’re focusing on growing not only wholesale but other sectors of the industry,” he says. “We all work toward a common goal. We need to stay close to customers and keep them informed of not only the challenges but also opportunities under the new normal.”

Industry insiders note that customers and vendors, for the most part, have been very understanding and have been through difficult times in their own businesses, so everyone is working together effectively in the supply chain to manage through the crisis.

“We are optimistic looking toward late 2020 and into 2021,” Shepherd says. We believe that our medical experts will be able to gain control of this pandemic, thereby enabling society to reestablish personal interactions. When this occurs, people will want to gather, celebrate occasions such as weddings and get back to enjoying each other. Our hope and desire are that all those associated with our industry can weather this storm. Our thoughts and prayers are with everyone.”

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