And the tariff conversation continues. Join Rodrigo Leiva of Esmeralda Farms and Christine Boldt of AFIA as well as Kate Pen of SAF shared their insights at The New Bloom Show.

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Source: Floraldaily.com

The New Bloom Show: The Blooming News Alert series

The impact of the U.S. tariffs on the floral industry – part 2

And the tariff conversation continues. Join Rodrigo Leiva of Esmeralda Farms and Christine Boldt of AFIA as well as Kate Pen of SAF shared their insights yesterday at The New Bloom Show, “The Blooming News Alert series”.

In the interview with Christine Boldt and Rodrigo Leiva, Boldt starts out highlighting the two main challenges, the unknown and cash flow issues. Leiva adds that wholesalers and supermarkets must recognize the increased costs from these tariffs, and the industry as a whole must share the burden. The flower business has thin margins, making it impossible to absorb a 10% tariff without adjusting prices. They hope that, through advocacy from AFIA, the floral industry can secure tariff adjustments or exemptions in the future.

Rodrigo also points out that while the U.S. has a domestic floral industry, 88% of the flowers sold are imported, with the majority coming from countries like Colombia and Ecuador. He doesn’t expect this to change soon.

The impact of the new tariffs on customs processing at Miami International Airport is discussed too, with Boldt explaining that a separate line item will be added for the 10% tariff, but the overall customs process will remain the same.

The seasonal nature of the flower business, especially around Mother’s Day, will lead to higher tariffs and greater cash flow challenges due to the large volume of flowers being imported. Some companies will have to pay millions of dollars in upfront tariffs while waiting for customer payments.

Also here, they refer to the pandemic where the flower industry has shown resilience. Now it faces new obstacles due to these tariffs. While hoping flowers won’t remain part of the tariff discussion, there are concerns that the tariffs could become a consumption tax, affecting overall flower consumption. The industry continues to advocate for relief in Washington, focusing on reversing the current stack of tariffs on flowers.

Advocacy efforts, led by organizations like AFIA, aim to push for better treatment and tariff relief. Many companies are passing on increased duties to customers to manage the financial strain.

A key issue is Mexico’s recent tariff exemptions, but Mexico’s flower market share is small compared to Colombia and Ecuador, which supply the majority of flowers to the U.S. The volume of flowers from these countries is critical to meet U.S. demand, and there’s no immediate solution to replace them.

The floral industry is urging stakeholders to work together, acknowledging that price increases are necessary due to rising costs, and emphasizing the importance of maintaining a healthy industry to meet consumer demand, particularly during peak seasons like Mother’s Day.

Watch the full interview below.

And what’s next for Florists? According to Kate Penn, CEO of Society of American Florists (SAF) florists are primarily concerned about ongoing price increases in the industry, which have been happening for the past few years due to inflation and the pandemic’s impact. The challenge is how much more they can raise prices without affecting customer demand. Discussions within the SAF council have centered around managing these price hikes and finding ways to cover costs. The introduction of tariffs has added to the uncertainty, though many in the industry have been preparing for this for a few months. Now, businesses are exploring various strategies to cope with the situation and continue moving forward.

She also shares best practices to focus on adaptability, good communication, and strategic planning to navigate the challenges posed by increased costs and tariffs in the floral industry. For businesses, practices like early ordering and clear communication are essential in meeting budget goals during these challenging times, she stresses.

SAF is advocating for the floral industry by sharing data on tariff impacts with U.S. government bodies and petitioning for exemptions on supplies, particularly from China. They urge the floral community to contact Congress and share how these tariffs are affecting their businesses. SAF will provide templates and talking points to make it easier for business owners to participate.

She also discussed SAF’s Congressional Action Days and shared the following key message for floral professionals: the critical importance of communication. SAF underscores the need for open dialogue across all segments of the industry, including growers, wholesalers, and retailers. They encourage professionals to stay connected, share insights, and plan ahead. Additionally, it’s essential to maintain a positive tone when communicating with customers, particularly regarding price increases driven by rising costs such as tariffs. Transparency, including incorporating disclaimers in contracts, is key to managing expectations. SAF further emphasizes the value of proactive communication and relationship-building to navigate challenges effectively. Finally, industry members are encouraged to share valuable resources and insights with their peers to strengthen the community as a whole.

Watch the full interview below:

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Eager to watch the previous interviews with Joe Don Zetzsche, owner of Rocking Bar Z, Eduardo Letort of Hoja Verde and Expoflores and Augusto Solano of Asocolflores? Click here to watch them.