California Cut Flower Commission

Gauging Buyer Perceptions Of California Products vs. Imports

The California Cut Flower Commission (CCFC) is a farmer-funded state commission focused on improving the vitality of the California cut flower industry in four main areas: farmer research and economic development, public relations, transportation, and governmental affairs.  CCFC represents all of California’s commercial cut flower and greens farmers, who account for about 20 percent of all cut flowers sold in the US.  Approximately fifty percent of California grown fresh cut flowers are distributed to wholesale and retail customers outside the state. 

California’s cut flower farmers face serious competition from South American imports, particularly Ecuador and Colombia, whose equatorial climates make for stable year-round growing conditions.  These countries also benefit from low labor costs, lower property values, far fewer regulations, direct and indirect government subsidies, and a permanent free trade agreement with the US.  Further, with the vast majority of South American imports going to warehouses in Miami, flowers of all varieties from hundreds of farmers are already consolidated in one area, easing logistics and costs of shipping.  These factors have contributed to a considerable erosion of California’s share of the US cut flower market over a period of about two decades. 

A two-step process was developed:  1) get a firm understanding of what farmers see as their main challenges and advantages, and 2) gain an equal understanding of what the market (buyers) perceive as California’s strengths and challenges as a cut flower source.  This information would be used to identify and assess opportunities and develop suggestions to exploit them. 

To measure farmer perceptions, Morrison & Company developed a survey with CCFC and our friends at the California Center for Cooperative Development.  The survey was conducted anonymously and sent to California’s flower farms. 

The first part of the survey covered farm demographics (e.g., size of operation, location, production cycle, primary market channels) to allow the survey data to be parsed accordingly.  The second part of the survey covered farmer perceptions including challenges facing the industry, why buyers might prefer imports, advantages of California grown flowers, disadvantages of imported flowers, and what farmers want from buyers.  In addition, farmers were asked questions regarding the need for cooperative buying and marketing, and technology alternatives.  Nearly a quarter of all farmers responded.

Our experience has shown that surveys of commercial buyers are difficult to conduct and result in low response rates.  Accordingly we identified several wholesale, grocery, mass merchandise, Internet/e-business buyers and brokers.  With facilitation by CCFC we were able to arrange confidential interviews with buyers for many of the biggest names in the industry as well as a number of retail florists.  Our questions were designed in part to parallel the questions asked in the farmer survey for the purpose of comparing farmer and buyer perceptions.

While many of the responses were close to expectations, there were also a number of surprises.  In several cases, farmers and buyers held significantly different perceptions of the California and South American industries and their respective advantages and disadvantages in the marketplace.  These findings will be used to develop and refine strategies to help the California cut flower industry gain market share and improve profitability.  In addition, important recommendations were developed for the need for cooperative buying and marketing, some of which have since gone into development.