Sales Growing For Flower Auction Floraholland

Flower auction FloraHolland has ended 2010 with sales of €4.13 billion. Despite a disappointing December, almost 7% more sales were made for plants and flowers than the previous year. “With an increase in sales like this, you can call 2010 a good year,” says Timo Huges, FloraHolland's General Manager. “Though this is not true for every member of the co-operative. As far as sales are concerned, we are just above the level we had reached in 2008, the year before the financial crisis. Also, as a solid co-operative, we can lower the auctioning costs for growers and traders in 2011. Take a look at the pricing for growers and you'll see a different situation. In order to compensate the increase in production costs, growers' profits will have to increase further.”

FloraHolland offers its growers and customers a network of six market places, being the flower auctions in Aalsmeer, Naaldwijk, Rijnsburg, Bleiswijk, Eelde and Veiling Rhein-Maas in Germany. It also provides the nationally-operating intermediary organization FloraHolland Connect and an internationally active import department. Together with growers, traders, wholesalers and exporters, the auction sold more than 12 billion flowers and plants in 2010. “Those billions of flowers and plants also found their way to the European consumers in 2010. Crisis or not, consumers continued to be interested in our quality products,” says Huges.

Closer to the market, thanks to FloraHolland Connect

The largest product group (cut flowers) produced sales of €2.3 billion and showed the largest increase at more than 8 per cent. The sales of indoor plants increased by 4% to €1.4 billion, and the sales of outdoor plants increased by 6% to €355 billion. Almost €2.5 billion worth of products was sold via the auction clocks. This is an increase of almost 4 per cent. At the end of November, clock sales at the Venlo location were transferred to the Veiling Rhein-Maas joint venture in Herongen, Germany. In addition to the successful start of Veiling Rhein-Maas, the integration of the TFA (Tele Flower Auction) was completed last year.

2010 saw another further shift in sales from the auction clock to trading via FloraHolland Connect. This tool for the benefit of direct trading experienced an increase in sales by 12% to €1.6 billion. This brought the share that the direct flows have in FloraHolland's turnover to almost 40%. FloraHolland Connect has developed into a more market-oriented organization that handles according to its specialized knowledge of the various sales segments.

The share of virtually sold products increased for both the auction clock and FloraHolland Connect. At the moment, more than 60% of all flowers are sold without the products being physically present at the point of sale.

Image auctioning gradually developing further

"For almost 100 years, we have had a mission that is simple in principle," says Huges. "This is to bring the members of this co-operative and their products into the best possible position to make sales. Harmonization and virtualization are important steps in streamlining the auction operations, because more and more growers and traders are selling or purchasing their flowers and plants at more than one of our marketplaces."

Since 2010, all the auction clocks have been projection clocks. Almost half of the flower auction clocks have made the transfer to image auctioning. Image auctioning allows more digital information about the products to be supplied. This information is readily usable in electronic trading systems, far into the trade channels. When and for which product groups image auctioning will be introduced is determined in close consultation with growers and customers.

Further investment in construction preparations

Because the Veno location is now a part of Veiling Rhein-Maas, sales from Venlo will cease in 2011. Thanks to some light growth, FloraHolland can still count on a total turnover which will be approximately equal to that of 2010. This careful prognosis has come about thanks in part to the instable currency market and the uncertain economic climate.

FloraHolland will be investing a total of €75 million in 2011, bringing the investment program back up to the level it enjoyed before the financial crisis. Large entries into the investment budget are those for the uniform auction trolley project and real estate. In Aalsmeer, the FloraHolland Oost (East) location is being prepared for development so that the first customers can locate themselves there. The auction and customers are also investing in expanding the sales accommodations at Naaldwijk and Rijsburg. This will increase the buying power collected at the Aalsmeer, Naaldwijk and Rijnsburg export locations.

The auction and customers are investing at the regional locations of Bleiswijk and Eelde as well, in new technology, buildings, and handling facilities to strengthen the market places.

Photo caption: The auction room at Naaldwijk with its eighth cut flowers auction clocks (brought into service in 2010).

About FloraHolland

The cooperative flower auction FloraHolland offers growers and customers a network of six national and international marketplaces (Aalsmeer, Naaldwijk, Rijnsburg, Bleiswijk, Eelde, and Veiling Rhein-Maas), a national intermediary organization (FloraHolland Connect) and an internationally active Import department. Veiling Rhein-Maas (Herongen, Germany) is a joint venture between FloraHolland and Landgard. FloraHolland, the world's largest auction organization, processes over 12 billion flowers and plants a year. Annual sales exceed € 4.1 billion. Almost 4,200 employees work at FloraHolland.

Source: FloraHolland