A growing economy and a plant and flower loving population with an increasing disposable income. It seems like there are lots of opportunities in Poland for plants and flowers from the Netherlands. However, trying to increase the sales of horticultural products in this Eastern European country is not a walk in the park.
by Arie-Frans Middelburg
afmiddelburg@hortipoint.nl
The Arkada shopping centre with its many little shops is situated underneath an overpass in the old part of Warsaw. Shops include a retro barber’s with old-fashioned chairs and large mirrors. But also a small concept store, called Flower Store, where a saleswoman is cutting red large-flowered roses from the Netherlands just below the head and puts them in a box filled with floral foam.
The saleswoman tells us – a group of visitors, including twelve growers, led by Paul Ras from Sense, Marketing & More – that the concept was initiated by a world famous actress. Her name is Maja Bohosiewicz, she is 25 years old and very pretty.
Boxes with ten roses are sold for 100 zlotys, about 25 euro. There are also larger boxes, with 25 roses, and they are sold for 250 zlotys. There are some bunches of freesias and lisianthus in the corner. They will also be used for gifts that are sold in the store and online. There’s another one of these shops in Katowiche. “We started half a year ago and sales are going well,” says the saleswoman.
Economy is growing
The little shop in Arkada is an indication of the positive developments in plant and flower sales in Poland. Developments that are driven by the growing economy of the Eastern European country.
In fact, Poland is one of the countries with the highest economic growth in Europe. The financial crisis that hit Europe from 2008, didn’t really reach Poland at all. The growing economy – since 2002, the growth of the Polish economy has been 2% higher on average than the EU average – means that the disposable income of people in Poland has been increasing and they have been spending more on luxury products such as plants and flowers.
The rising prosperity also seems to translate into a higher value for plant and flower exports from the Netherlands to Poland. From 2013 until 2015, the Floridata and VGB numbers showed all plusses for the Netherlands.
This year too, plant and flower exports from the Netherlands to Poland will increase again. This growth is more than average. In addition, the Netherlands is also the largest exporter of plants and flowers to Poland. In the sector of cut flowers and potted plants import to Poland, the Netherlands has shares of respectively 90 and 75%. Germany, Italy and Denmark follow at a great distance. The market share of the Netherlands on the Polish cut-flower market is 25% and on the potted plant market it’s 27%.
Family businesses
The biggest competitor for plants and flowers from the Netherlands is local production. The production value of Polish cut flowers was €270 million in 2013 and for potted plants (including bedding plants) this was €175 million. Most Polish plant and flower growers have small family businesses. The main crops consist of chrysanthemum, rose, tulip, gerbera, carnation and potted chrysanthemums. A company like JMP Flowers, which grows phalaenopsis, roses and anthurium on 14.5 ha, is exceptional in Poland.
Greenhouses are being built in Poland as well, but they are usually used to grow vegetables such as tomatoes, peppers and cucumber. The future is uncertain for many of the small family businesses. For example, many gerbera growers started in the eighties of the last century and they don’t have a successor. And there is the competition of plants and flowers from the Netherlands.
The forecast is that the Polish market for cut flowers and potted plants will continue to grow in the coming years. The value of the cut-flower market in Poland was €736 million in 2013 and it will increase to €832 in 2018 according to BureauSierteelt.nl, who were contracted by VGB to publish a country report of Poland. The market share of indoor plants and bedding plants will increase to €674 million in 2018 (from €528 million).
Love flowers
Everywhere we go in Warsaw, we’re told that the Polish love plants and flowers. Name days and Alls Saints’ Day are traditionally important plant and flower days. On the first of November, the graves turn into a sea of plants and flowers, but in fact lots of plants and flowers are put on graves throughout the year. According to the figures, about 10% of the purchases end up at the cemetery. Walking past some cemeteries, we noticed the flower stalls at the entrances.
The figures also show that people are buying more plants and flowers for themselves and as gifts for others.
More and more people in Poland are interested in their gardens. This trend is seen mainly in the cities because that is where the incomes are getting higher. “There is a big difference between the level of development in the Polish countryside and in the cities”, said Martijn Homan, Counsellor for Agriculture, Nature and Food Quality at the Dutch embassy.
Polish people are spending more time and money on their gardens and are asking for higher quality products. At least, that’s how John Kaszuba sees it. Together with two brothers and his parents, he runs a garden centre, Flora Point, in Warsaw. His experience is that customers have a higher disposable income and they don’t necessarily spend it on more plants and flowers, but on higher quality. “And us too, when we purchase plants and flowers, we’re not after the lowest prices, but after the highest quality”, he claimed.
Larger assortment
With the increase in prosperity, the available range of products is getting larger too. Kees van Rijn from Bart Kwyati, who’s been responsible for Van Duyvenvoorde’s distribution in Poland for years, is one of the people who experiences this. He has seen certain shifts in the market.
“The demand for cut anthurium has gone down. The demand for lisianthus used to be small, but has become much larger. And we’ve been selling a lot more bouvardia. The range used to be more limited.” Van Rijn said that the quality of the Polish products has improved, too. He mentions chrysanthemum, carnation, lisianthus and sunflower.
Another development is the emergence of retail outlets as a sales channel, especially for plants. Supermarkets’ share in plant and flower sales has increased to 7% the last couple of years; it is anticipated that this will have reached 10% by 2018. In recent years, major retailers and DIY stores opened stores in Polish cities. Including OBI (46 stores), Leroy Merlin (50 stores) Praktiker, Biedronka (no-frills supermarket chain with 2,650 stores), Carrefour (570 stores) and Lidl (517 stores).
There are also a few large shopping centres in Warsaw. These retailers have plant departments. But the quality they offer is variable and in some places there’s certainly room for improvement. Shopping centres normally have a flower shop.
During our visit to wholesaler Orchidea, owner Wojciech Skiodowski confirmed the rise of the retailers. In the past, his assortment consisted of 70% flowers and 30% plants. Nowadays, it’s 90% flowers.
And 50% of the flowers that Skiodowski sells are roses, the number 1 flower in Poland. He’ll only purchase plants now if he’s sure that he’ll be able to sell them. His customers – florists in the mid to high-end segment – have been selling fewer plants because retailers have been taking over most of those sales, is his explanation. Why would you still sell phalaenopsis, when people can get them at the supermarket for around 4 euro?
Event planners
The Polish wholesaler mentions another change in the plant and flower sales in Poland. Couples who are getting married are no longer going to a florist to buy flowers for the wedding day. Instead, they’re letting event planners take care of the entire organisation of the wedding and these event planners go to the wholesaler to buy the flowers, preferably as cheap as possible.
Skiodowski’s day-to-day business operations also show a rapid development of digitalisation within the plant and flower sales. He launched a web shop two years ago and at the moment, 70% of his turnover already consists of online sales.
He purchases most of his flowers – apart from chrysanthemum – remotely through KOA. Just like many other wholesalers. Lots of wholesalers collect their orders themselves. Dutch exporters make the shipping arrangements and take care of the paperwork. Many exporters also came to the Flower Expo Poland, the horticultural fair that took place for the first time this year in Warsaw.
Not long after our visit to Skiodowski’s wholesale company, we hear his name mentioned when we’re in a new, modern shopping centre. High-end flower shop Florakropka turns out to be owned by him. The shop is an indication of advancement in the Polish plant and flower market.
Chrysanthemum growers
All these developments illustrated that Polish plant and flower sales are changing. However, the developments in Poland are only moving slowly. Looking back to the study tour to Warsaw undertaken by Dutch chrysanthemum growers eight years ago – a journalist of the Vakblad voor de Bloemisterij came along on that trip, too – many things have stayed the same.
For example, the quality varies greatly and the assortment is still quite limited. A large part of the wholesale trading is still done at auctions; the Polish seem to be very price-aware and that’s hardly surprising considering that the standard of living still isn’t that high. And although the range of products has increased, there are still quite a few things missing. Orchids, for example. During our tour we spotted plenty of phalaenopsis and dendrobium, but no other types of orchid.
Furthermore, an increase of the Polish plant and flower sales may be hindered by the slight decline in population that is forecast for the coming years. And people here are quite happy to buy artificial plants or flowers instead of real plants and flowers. We noticed that these artificial products were still as prominently present as during our study tour of eight years ago.
In supermarkets and on wholesale markets as well as at the stalls outside the cemeteries. Artificial flowers are mainly used to put on graves. On All Saints’ Day for example. It’s a relatively cheaper option and they don’t require any maintenance. It’s a very old Polish tradition, Polish people are used to it.
Young people
According to Robert Sliwinscy from RM FLowers, a company that sells artificial flowers, young people are a new target group for his trade. Young people decorate their houses with plastic or silk flowers from China. And a large part of the population happens to be young: 44% of the Polish population is younger than 35 years (only 15% is older than 65). It became clear in Warsaw that these young people may not be the best population group for plant and flower sellers.
For the moment, Florakropka and actress Maja Bohosiewicz’s initiative should be considered exceptions to the rule. At the same time however, these examples indicate that there are still lots of opportunities in Poland. There’s definitely room to grow for the plant and flower trade in Poland. But given the popularity of the plastic counterpart, the limited budget of the average Polish person, and the preferences of the expanding group of young people, growth will not happen by itself.
