Bridge of flowers

USA Bouquet has logistics ‘down cold’ for moving blooms from grower to U.S. retailer.

By Chris Dupin

   The flexibility to source flowers globally and a cold supply chain to keep them in top condition until they can be delivered to stores around the country have helped USA Bouquet Co. blossom.
   Ricardo Nieto, director of operations at the Miami-based company and its Consolidated Fresh Solutions affiliate, said the company’s model is unique when compared to its competitors.
   Instead of being a vertically integrated company with its own farms, USA Bouquet contracts production from suppliers located in a variety of countries.
   These include not only well known Latin American and European flower exporters — Colombia, Ecuador, Costa Rica, Guatemala, Peru, Chile, Mexico, Holland and England — but also more far-flung locations such as India, Kenya and Ethiopia in Africa, and Australia.
   The company also has what it calls its “heartland” program, sourcing from growers throughout the United States such as California, Florida, North Carolina, Tennessee, New Jersey and New York.
   Many Miami area importers own or are closely linked to one or a small group of overseas growers. That has advantages and disadvantages, explained Christine Boldt, executive vice president of the Association of Floral Importers of Florida.
   An importer may be more certain of its costs, more labor can be performed overseas, she said. But with such an arrangement, a company may be more locked into sourcing a particular flower unless fields are replanted, and a company can be hurt if weather or some other problem impacts its supplier.
   Nieto said USA Bouquet’s approach of wide sourcing gives it “flexibility of finding the right flowers, from the right country, at the right time. We are not affected by any weather situation, any catastrophe in any country. We can easily switch from Bogota to Quito, or from Quito to India, or India to Africa.”
   The advantage of the company’s approach became apparent this past Mother’s Day, Nieto said, when severe flooding in Colombia resulted in product shortages and higher prices.
   His company makes commitments months in advance to retailers to supply products at fixed prices. When prices from Colombian growers skyrocketed, USA Bouquet had to scramble to find alternatives.
   “We had an opportunity as a company to go deep with our model and had a very good experience, not only in terms of quality, but also pricing and logistics,” bringing in flowers from other countries such as 
India.
   While India is a big supplier of flowers to Europe, his company had not used suppliers there previously. It found the process went smoothly after supplying growers with the invoice, and Customs and U.S. Department of Agriculture guidelines.
   According to the Society of American Florists (SAF), imports account for about 68 percent of fresh flowers sold in the U.S. by dollar value.
   Imports by country are:
   • Colombia, 65 percent.
   • Ecuador, 16 percent.
   • The Netherlands, 6 percent
   • Canada, 4 percent.
   • Mexico, 3 percent.
   Top U.S. producing states, according to SAF are:
   • California, 76 percent.
   • Washington 9 percent.
   • Oregon, 3 percent.
   • New Jersey, 3 percent.
   • Hawaii, 2 percent.
   • Florida, 2 percent.

Flower Central. Miami International Airport said about 177,850 tons, or 89 percent of all U.S. flower imports, move through its facilities, most arriving from Latin America.
   The three largest flower carriers are LAN Airlines of Chile, the Tampa Air Cargo subsidiary of Avianca-TACA, and Centurion Air Cargo. Boldt said UPS Air Cargo and American Airlines are also major carriers.
   About 5.27 billion stems of flowers were imported into the United States last year, Boldt said. This year, however, total stem imports are down about 6 percent, a change she attributed to the weak economy, the floods in South America, and a nasty Valentine Day’s present to the industry from Congress when it decided not to extend the Andean Trade Promotion and Drug Eradication Act, letting it expire on Feb. 12.
   That means flowers from the two biggest exporters to the United States — Colombia and Ecuador — became 6 percent more expensive and firms became more conservative in the amount of flowers they imported. Boldt is hopeful the Andean program will be restored later this year.
   Boldt’s association estimates there are about 75 fresh flower importers in South Florida, employing about 6,100 people.
   Customs and Border Protection now operates 24 hours a day, 7 days a week at the airport to accommodate the flower volumes. That has benefited the industry, Boldt said, because it has reduced overtime costs and helps move product through the airport more quickly.
   USDA inspectors in Miami are also considered top notch because they have so much experience. It’s rare, she said, that an entomologist in Miami ever needs to send an insect to Washington to have it identified.

Acting As Bridge. Nieto describes USA Bouquet as a “bridge between growers and the supermarkets.” Where the floral supply chain is usually grower to importer, to wholesaler, to retailer, to consumer, USA Bouquet takes delivery at overseas airports and then assembles bouquets to customer’s specifications and arranges delivery all the way to its customers.
   Its customers include some of the largest retailers in the country: Wal-Mart, Costco, Publix, Kroger, Safeway, A&P, Jewel-Osco, Stop & Shop, Walgreens and CVS.
   The decision to focus on sales to supermarkets has worked well for USA Bouquet as mass retailers’ market share has grown compared to florists. Another growing retail channel is “dot-com” companies, and USA Bouquet does fulfillment for firms such as 1-800-Flowers and FTD.
   USA Bouquet has annual sales of about $120 million. It is 75 percent owned by the New York-based private investment group FdG Associates, which acquired its stake in the company back in 2007. The other 25 percent is owned by company employees.
   The company’s history stretches back to 2001 when USA Bouquet’s management team, led by Edgar Lozano, president and chief executive officer, purchased the bouquet division of a public company called USA Floral Products that had run into financial problems.
   Nieto explains that by assembling flowers from many different countries, the company is able to manufacture bouquets that have a higher perceived value to the consumer than a regular 12-stem rose bouquet or a simple pom-pom bouquet.
   Flowers that USA Bouquet brings into the United States from Latin America arrive in Miami on a daily basis by air (the company uses LAN), with the exception of imports trucked in from Mexico.
   The company tightly controls the cold chain from the time its product arrives in Miami until it is delivered to the customer.
   For example, in Colombia, farmers deliver the flowers to the airport at around 8 p.m. They are loaded onto planes at around 4 a.m. and arrive in Miami at about 8 a.m. (Flowers from Ecuador are first routed through cargo agents, adding an additional day to the logistics process.) About 8 to 10 hours later the product is released by Customs.
   The product is precooled on arrival in Miami and then either taken to USA Bouquet’s Miami facility, or loaded in reefer trailers that transport boxes of flowers at 34-35 degrees Fahrenheit to five satellite U.S. facilities USA Bouquet has in Georgia, New Jersey, Illinois, Texas and California.
   In Miami and those other five locations, those flowers are combined with blooms arriving from other foreign or domestic locations using “recipes” developed by USA Bouquet with its customers.
   So the only interruptions in the cold chain come as the products are being loaded and offloaded onto the plane and during the flight, though as the planes gain altitude, the temperature in the belly of passenger planes or cargo compartment drops to about 40o-45o F. Nieto said a rose picked in Colombia today will still look good in your vase 12 to 15 days later because of the attention paid to maintaining the cold chain.

Ocean Transport. Nieto and Boldt said transporting flowers by ocean would be better for flowers than moving them by air because temperatures could be more tightly controlled. Boldt said there have been some ocean movements of entire containers of roses around Valentine’s Day and shipments of greens by ocean from Central America, but nearly all the rest move by air.
   Nieto explained ocean transport of flowers from Colombia and Ecuador would actually be more expensive than moving them by air because the growing regions are so far from the ports — 12 to 15 hours in Colombia and 8-10 hours in Ecuador — that land transport cost would offset the savings moving boxes by air.
   Nieto expects ocean transportation of flowers to become more common in coming years. This would probably first happen between South America and Europe because of higher freight costs. He also said shipments of tulips from Holland to the United States have worked well.
   But there are other drawbacks to ocean transport. Response to customers is slower because of the longer transit time, and assembling enough flowers to fill a 40-foot container is challenging.
   About 60 percent of all flowers in the United States are sold on Mother’s Day and Valentine’s Day, and most others are sold for special occasions. Studies of U.S. flower shoppers find most are buying blooms for a special occasion for which they will also pick up a card, a balloon or some other gift at the same time.
   If U.S. consumers develop a culture of buying flowers on a regular basis, those containerloads of flower shipments might eventually develop.