‘Retailers aren’t interested in extra links that add nothing’

Flamingo Flowers and MM Flowers were the winners of the 2019 Tesco UK tender. One of the reasons why Tesco preferred these two suppliers was the fact that they have their own production locations. Trading company Dutch Flower Group doesn’t believe in in-house cultivation. However, they do want to intensify the collaboration with growers and financially support nurseries where this adds value.

Flower growing is a specialism; something a trading company isn’t an expert in. The opposite is true as well; growers aren’t experts in supplying directly to the end customer and organising the logistics associated with this.

This is exactly why not everyone is convinced that owning several links in the chain is a good idea. ‘Stick to what you’re good at’ is a piece of advice that entrepreneurs shouldn’t ignore when they’re considering these kinds of plans feels Herman de Boon. He acknowledges that backward integration fits in with current developments such as international sourcing, scale increase, shorter chains and the role of retail.

“But trading companies have more options to regulate production, there are different alternatives to choose from. In many cases, backward integration turns out not to be successful. The best thing trading companies can do is build partnerships. Forwards, starting from the grower, has a higher chance of success – at least if there’s sufficient scale or enough product diversity”, explains De Boon.

Supply chain control

Flamingo Flowers and MM Flowers both took a step forward in the chain. The companies started out as nurseries.(..)

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