Navigating Trade Policies and Tariffs with Insights for Valentine's Day 2025

Episode 259: In this episode, Lori and Vonda are joined by Bill LaFever, President of the Bill Doran company, to dive into crucial issues impacting the floral industry. Bill sheds light on the recent advocacy efforts in Washington DC, led by the Society of American Florist (SAF), to advocate for the renewal of the Generalized System of Preferences (GSP). He emphasizes the significance of the GSP in enabling duty-free rose imports from Ecuador and provides valuable insights into its implications.

Furthermore, Bill delves into the potential impact of impending tariffs on the industry and shares expert perspectives as Valentine's Day approaches in just two months. 

Sponsored by:
Flower Clique
Flower Clique Prep School
Real Life Retail Florist

Transcript

SPEAKER_00 0:01

It's gonna affect your industry today, but I don't think our average retail flower shop. There's nothing apocalyptic about it at all. It'll be dealt with very comfortably.

SPEAKER_01 0:13

Welcome to the business and pleasure of flowers. We're your hosts, Vonda LaFever and Lori Wilson.

SPEAKER_02 0:19

And we believe that business and fun are a perfect combination. Kind of like us, Vonda. Hey Lori, how's it going today? It is going. Um, don't want to go into details about the Christmas tree, but it's still a thing, but we'll talk about it later. I just I want to move on from it.

SPEAKER_01 0:38

I think you should move on. We have a really special guest. We have a big wig, as my parents used to say, since somebody important was in the house. He's a big wig.

SPEAKER_00 0:48

Not necessarily so happy with you.

SPEAKER_01 0:50

We welcome back Bill Refever, the president of Bill Doran Company. Bill, thanks for joining us again today.

SPEAKER_00 0:56

Happy to be on.

SPEAKER_01 0:57

It's great. We're excited. We always get excited when you come visit us, Bill, and thank you. Thank you so much for coming. You're just always a wealth of knowledge. And so we are coming back to you with a really interesting question because Lori and I were reading on, I guess it was a social post, that you were in Washington, DC, Society of American Florists, and with something called a GSP, right? And I want you just to kind of explain that whole thing because it was kind of new to us who are not in it knee deep in all of these tariffs and changes and legal things going on and laws in Washington, D.C. So kind of explain that to us a little b.

SPEAKER_00 1:42

All right. I'll give a little bit of history. And for the people that are overly detail-oriented, take this with a grain of salt, why don't I give some dates? But for years, there was the Indian Free Trade Pact. There were four countries in South America: Ecuador, Bolivia, Colombia, and I think Argentina. It was a free trade agreement that uh all products could flow into the U.S. free. That would get renewed every four years or so. Then, probably about 10, 12 years ago, but that didn't get renewed. And we had some taxes for a little while. Then Colombia ended up getting a free trade agreement just with the country of Colombia. Ecuador got left out primarily because one of the large oil companies that had investments down there in oil wells got privatized by the Ecuadorian government. And I don't want to say Exxon, but it was one of those Chevron or somebody like that. And then combined with Edward Snowden living in the Ecuadorian embassy in England, who allegedly stole all the information from U.S. intelligence, that Ecuador became kind of a pariah. So we've been paying tariffs on Ecuadorian flowers for the last eight years, let's say.

SPEAKER_01 2:53

Well, and it says an estimated 6.8%. So a high tariff.

SPEAKER_00 2:57

Well, 6.8% just on roses. Some of the items were up to 10 and some are lower, but roses is a high volume out of Ecuador, so 6.8%. So we've been paying that. So about four or five years ago, there's another system of free trade called GSP, uh, general systems of preferences. There's over 5,000 items. This is by items that are listed on there that are allowed to come into the U.S. duty-free. Okay. So there's two avenues. Every country has to be approved into the GSP, and this is across all different countries, and then items have to be approved by individual companies. So our best bet was about four years ago we started lobbying the USTR, U.S. Trade Representatives, independent organization within Washington that reports directly to the president that helps give recommendations for the GSP.

SPEAKER_01 3:54

Okay.

SPEAKER_00 3:55

So five years ago, four years ago, we were able to lobby to get roses added to the GSP. Oh, okay. Which was awesome because Ecuador was a member of the global GSP. So now we could finally get Ecuadorian roses, and we got that done in October. So I guess when I said four or five years, we started four or five years ago. It happened three years ago. We got it fully approved.

SPEAKER_02 4:20

Okay.

SPEAKER_00 4:20

So then we got that done in like October. The GSP in general expires on a regular basis for every four or five years, depending on the timing. It expires and then it gets renewed by Congress. The GSP does. But basically, it gets put forth by the Ways and Means Committee in the House of Uh Representatives. They put forth to approve it. It's bipartisan, it's not a Democrat-Republican thing. But what typically happens is the Democrats will add something to the bill that adds it, and then the Republicans try to add something equal and back and forth. You don't just approve the GSP. Well, we're on like month 36 or 38 of trying to get the GSP renewed. The longest we had ever gone without getting the GSP renewed was I think like 14 months, and we're well over double that. So we have been paying tariffs, paying that 68.8% currently, I think the balance that's been paid in is over $24 million, has been taken from the industry and put into just federal general coffers. So it's just a taxation, everything being pulled out of our industry. So as soon as we got them added, then the GSP doesn't get approved. So back in mid-November, there were about five of us that had contacts with key legislatures on the Ways and Means Committee. We went to Washington and thought we had about a 16-day window of future Congress days to try to push for it before the next administration comes in. So we knew it was a very, very small chance of making anything happen. But we had a lot of wonderful conversations. Once again, everyone wants the GSP to come through, bipartisan, whether we were in the Democrats' office or Republicans' office, they're all for it. It's just the add-ons that they're putting on. Democrats want to add TAA, which is a trade with assistance program. The Republicans are adding the TPA, which is a trade protection act. It gets very convoluted. So we've been paying the 6.8% Aquitorian Roses. We got a couple days left before Congress adjourns. It doesn't look like they're going to get it through. There's a slight chance when we're on the hill. I'm arriving in DC, we were saying it's about a 20% chance. It got exciting for a little while. We were thinking it was over 50%. My last conversation to make it seem down to about a 10%. So you never know what's going to happen is that if if they don't get it approved now with a few other things that have to get done, next Congress is going to be so focused on all the major budgeting and defense and all what the new administration comes in. GSP won't even get on anyone's radar for a long time. It'll be there from now before we deal with the GSP really pushed again. But we'll keep pushing SAF does. Congressional Action Days, there'll be 80 to 100 people will be coming in. Everyone's welcome.

SPEAKER_03 7:18

Yeah.

SPEAKER_00 7:19

200 people will be there in March, and we'll take the same concept to the hill and meet with all the representatives again. So that's what that was about was just our our last chance to kind of squeeze it in. We almost got it past just historically speaking, when the Ecuadorian government kicked Snowden out of the London embassy. We went for it then, too, got snagged by a couple of other issues related to larger global politics. But we thought, ah, because that everyone kept saying that they'll never get it uh passed until that happens, but we'll see. So that's what the GSP is, that's what that Grim Rose tax is. Uh it's been pretty much included into everybody's pricing. The general industry that when it expired just kind of absorbed it, the 6.8, because it always got refunded. So even if it took four months or six months before the GSP got renewed, that's fine. All we had to pay it, but we got all our money back. The industry did that for the first period of time. Then after a while, it's a lot of cash. And and so that 6.8% is now, I would probably argue is in all Ecuadorian rose prices, whether you're buying you know uh from a farm and having them you know shipped directly to you, or buying from Miami Importer, you're buying from your local wholesaler, that 6.8 is you the your the the five or click members, it's in the cost.

SPEAKER_01 8:48

So probably after that 14 months, which is how long it usually took, once that you went past that, everybody probably went, Oh my gosh, we can't absorb this any longer.

SPEAKER_00 8:57

I think it was even before then they started absorbing it just because we saw that there was no way it was getting like we were hitting a brick wall with like it wasn't just uh this next stretch of Congress and will be done. We weren't getting that vibe at all. So I think in general at that point it was like, oh it's unfortunate.

SPEAKER_01 9:15

Yeah. Well, when I read the information initially, I thought, what about Columbia? But you mentioned that Columbia isn't in that they have their own Columbia has their own free trade agreement, FTA.

SPEAKER_00 9:27

So that got approved when the Andean Trade Preference Act, ADTPA, got dissolved and didn't get renewed. The Colombian lobbyist and government and everyone associated with Columbia got very proactive and said we need to take care of this helps.

SPEAKER_01 9:44

And so Holland the same? Anything coming from the Holland market?

SPEAKER_00 9:50

Well, that's coming in under a different tariff-free area.

SPEAKER_01 9:53

So you don't have those It's very interesting to me that you know meeting. Yeah.

SPEAKER_00 9:59

But but the bigger concern isn't that. So as soon as I thought honestly, I thought part of this podcast was going to be the next thing. So we were in there on the 18th and 19th of November, we were in Washington, D.C. Then within a few days, I don't know if it was that next Monday or Tuesday, or maybe it was shortly thereafter, Trump announced that on inauguration day he's planning on putting a tariff 25% on everything out of Mexico, 25% out of Canada, and 10% out of China. Right. Well, obviously, the we understand what the 10% out of China would do for the hard goods and consents for la that that goes there versus uh Maine domestically. But the 25% coming in from Canada, Mexico is absolutely huge. This is going to be a big factor. Now, what he's saying is that that will help with the illegal drug trade, the tr uh the the policing of the illegal drug trade and illegal immigration. That's why he's putting the tariffs on. But it gives the countries the opportunity to fix the illegal drug trade and illegal immigration. So it's somewhat of a threat, but it's not an idle threat. I clearly believe that he's would follow through on that if he doesn't get help with that. To the extent that uh Prime Minister uh uh Justin Trudeau from Canada was at Mar-a-Lago, he flew down Mar-a-Lago to say, hey, you're gonna cripple Canada if if you put 25% on everything that comes in. Um flowers are are small. But for example, um, I did pull up the last 12 months our purchases from Canada. So just our little company, we purchased $4.8 million worth of flowers out of Canada to resell. That was our purchase price. Out of Mexico, we purchased uh $6.75 million out of Mexico. So when we say that that's going to be 25% tariffs on there, you know, we're looking at you know $2.8 million, two almost three million dollars in additional costs that we would have. So that that's huge. Oh gosh. And when you start thinking about which products that is, I think that's where you have to start you know evaluating, and that's where I guess hopefully if I'm gonna give any good advice that what from non-substitutable items, high, high percentage of the Lysianthus we purchase is either from Canada or Mexico. Uh high, high percentage of Snapdragons that we purchase are either from uh Canada or Mexico. Can independent, our Texas stores do a lot more out of Mexico, and the northern stores do more out of Canada, but still we're shipping product, the Mexican product, Albany, New York, and Canadian product, all the way down to Dallas, Texas. So it's a mix. But those are the two items I go, oof. I'm if I'm a retailer, I don't know what fortunately our retailers are very creative and and have the abilities to make arrangements out of anything and everything and get their line flower. But I don't know exactly what the perfect substitute for snap dragons is these days in in abundance, right? As you're planning out uh arrangements for 2025, that that could be an item that is going to go up dramatically in price. Uh and then same with Lindsey Anthus, which is one of my personal favorites. Uh, I absolutely love Lindsey Anthus. We don't sell that much of it relative to all the other products, but never knew why. But now so it's gonna potentially go up another 25%. Um other than that, that we do a lot of Guerberas out of both those two countries. Good news there is Colombia produces an absolute ton of them. Well, we don't sell a ton out of uh Colombia, they prefer the um Canadian Mexican because they never need water and we ship them in water from farm through. But the prices of the South American ones were half price or at least 40% off. But our our core customer base never cared. They were willing to pay more because they wanted that petal perfect, you know, 50 matching white with the cream sun or whatever, you know, whatever you need. So they were paying dramatically more, uh, often double. So that flour will be available. I I think we'll have to do a fair amount of education with our customers that hey, make sure you get a good drink, uh use clean uh bacteria-free uh clippers, cut them, get them in hydration, you know, quick dip them, get them in hydration solution, do all of that, and they will perform just as well. And and pricing will be fine.

SPEAKER_01 14:43

Because the other challenge you were up against is was it Sun Valley in California, right? That's closed. I mean, so a lot of our American suppliers aren't even there for TM says a fair amount of that Sun Valley product is still making it to market.

SPEAKER_00 14:59

And not all, I mean probably 40% of it's gone, maybe 50%, but some of the plants are still producing and still managing. But you're right, there is no substitute for this international product domestically. And that's part of what we were explaining to the people on on Capitol Hill is that you can't onshore uh flower moan, it's never gonna be what it was when carnations were grown in in Colorado, you know, back even in mid-90s, they were still growing a lot of carnations in Colorado, even the late 90s. You know, that's all gone and it's never coming back. The land value is way too high. The the the the cost of heating greenhouses, it's just not feasible.

SPEAKER_01 15:37

Yeah.

SPEAKER_00 15:38

The good news is our end consumer loves flowers, isn't set on absolutely having to have you know four stems of Lysiantis in an arrangement on their table on the state. There's gonna be a lot of duty-free flowers coming in, and the creative component of our industry can really shine at that point. Trends change, and now trends are gonna maybe get a little dictated by tariffs. You know, it would be interesting. There's ever a historical study on how did floral design trends change, you know, in the early 2020s, someone would be able to reference back, well, the tariffs affected some of that floral design trend because of X, Y, and Z. So I don't foresee it crippling our industry or having a real issue from that perspective.

SPEAKER_01 16:23

No, I agree. I I agree because the consumer purchases on color and not necessarily a specific kind of flower. So as long as the florist can pivot and say, okay, we're not gonna have this, or we can't afford to pass this along to our end consumer. We just need to be able to make things that are reasonable and continue to take care of that consumer market that we're building, right? That we continue to build. We don't want to discourage them.

SPEAKER_02 16:51

Yeah, I think that's absolutely correct for the everyday florist. I'm just sitting here wondering how it might affect like the wedding florist, somebody that does maybe need more specific type flowers, but you know, brides that want a particular flower. I think it might be a little more difficult for them, but with that said, they can name their price, right? And they have a longer ordering time. They they just really, really, really planning ahead is gonna have to be something that they are really good at.

SPEAKER_00 17:26

You're right. Multiple things will happen with pricing of these items. So yeah, if production stays the same and a 25% tariff comes on, price increases, so demand goes down, so no has less purchases. So now the farms have to decide do I want to lower my price a little bit?

SPEAKER_03 17:43

Mm-hmm.

SPEAKER_00 17:44

Just to make sure I'm moving some of this product versus throwing it away. For sure, those items that I discussed aren't going to go up 25%, right? They'll get absorbed, partially because demand for those items will come down, just pure economics. Demand will come down, and if demand comes down enough, that maybe you might only feel a five or eight percent increase in price on those items.

SPEAKER_01 18:05

Oh, that's really a good point.

SPEAKER_00 18:08

You know, there's a huge tulip bulb shortage of yes.

SPEAKER_02 18:12

Remember while I was chatting you in as I was in that essay, I'm like, oh my gosh, there's gonna be a shortage on tulips, too.

SPEAKER_00 18:18

Yeah, no, but but here's what's interesting large mass markets consume the vast majority of these tulips. Um Trader Joe's, those types of people are doing a five stem, seven sem, they're selling them below my cost, right? Like I'd be better watching going to Trader Joe's buying them up because they're buying that many, right?

SPEAKER_03 18:37

Right.

SPEAKER_00 18:38

So when they saw that they're gonna have to raise prices when they were getting quotes from Highland Growers, that their retail price was going to go up a full a dollar minimally or more, they don't have to sell tulips. So I was given advice by a mass market people that said, be careful locking in at really high prices, because I'm like better to get whatever, 500,000 stems a week, at least get those locked in or get a million stems locked in at this. And then the mass market person that was giving me advice basically said, I don't know if I'd do that. I said, Well, why open market? There won't be anything in open market. Then this woman's perspective was their chain, uh mass market chain will be buying 40% of what they typically buy. Because their impulse customers don't have to have tulips, they're they need a $5.99 price point or a $4.99 price point, so she'll sub it out because they're not gonna pay $6.99 for tulips. And I may talk the pricing because I don't know exactly what they do, but you know what I'm saying? Like they're not gonna add $2 on retail just because of the bulb shortage. So she thinks these growers are gonna ramp up pricing because they think the demand's gonna be the same and there's less supply, so the prices will go sky high. But then when the mass market doesn't buy, the price is crashing back down. So her recommendation to me was you know, prices aren't gonna go up the yeah 40 to 50 percent. They might go up 20, but they're not tulips aren't gonna go up 40 to 50 percent. I kind of upset. It's a tulip, like she said, it's a tulip, it's not great. Yeah, I think we love to sell them, but it's not gonna do that. So I go back to for these weddings, sure. Is it gonna be a higher price for a very particular flower that the somebody needs for an event? Yes, but it's not like it's guaranteed just to be 25% more because a lot of people that don't have to have them aren't gonna buy them. So demand goes down, pricing goes down, and the new equilibrium is found.

SPEAKER_02 20:31

Yeah, yeah. That's true, that's a really good point.

SPEAKER_00 20:35

Supply and demand affects everything in our industry because these plants, we can't just turn them on faster, right? So when you're talking about weddings and vents, I always talk about the fact that Pinterest is what kind of ruined everything. When I used to travel to our locations, and I'd be up in Green Bay during wedding season, and you know, yellow roses were all the rage, and then I'm down in, you know, San Antonio, Texas, and everything's lavender, lavender, lavender. Well, back then, you know, the magazines produced trends and things, but the local areas each had their own vibe on what all the wedding shows dictated, and they helped produce what was done. Now everyone does Pinterest, so across the country, every bride is uniquely the exact same, right? I mean, they all think they're unique, but every bride. And look at the prices that we charge for some of these unique roses. I'm dumbfounded, like it's crazy. But we can't afford to put enough plants in the ground for wedding season, and for the fact that it may not be there at three or four years, and that's not enough to make it worthwhile. I need seven years and I need 12 months of purchases on the side. Eight months doesn't do me any good when we're putting these varieties in the ground. But the industry absorbed that. I'm I I'm just still the shock at what we sell some wedding roses prices for. Like that's a lot more than 25% premium. You know, it's a 50% premium, it's 100% premium. And and then they fight over. Then the sky potentially has a limit on some of the pricing on some of those T weekends. Um it's more we just try to take care of our core customers that you know are with us the other weeks. You know, a branch might only get 3,000 stems of that particular variety, so they can for that weekend, there's only and we're gonna demand for 9,000 at that branch. So I don't think this isn't that it's no big deal, it's gonna affect our industry negative, but I don't think our average retail flower shop, there's nothing apocalyptic about it at all. It'll be dealt with very comfortably.

SPEAKER_02 22:33

So if I'm a flower shop, if I own my own flower shop, which I don't, but if I did, and basically in my mind, I'm already done with Christmas. I'm moved on to to I almost said Thanksgiving, but I'm Valentine's Day. What would be your advice right now for me? Of course, I probably have already ordered flowers, but here's the thing I'm seeing all over the Facebooks, all of the groups and everything, people are already freaking out. They're even freaking out about foliage right now, you know, the price of greens and um certain stems. And they're like, is anybody else's wholesaler jacked up? I'm quoting their prices, and this is their how they're seeing it, right? As a customer. Um, but everything you've said right now, my hope is people listening, they're like, oh, okay, this makes sense because you didn't just wake up one day and decide, hey, I'm gonna jack up a price, right? That's not what it is. What advice to these people moving forward?

SPEAKER_00 23:37

Yeah, I don't think any wholesaler operates in that mentality because it's a volume-based business for us, right? We'd much rather have volume versus you know two or three more points on our margin or five points on our margin with the volume we would lose doesn't make sense. We need those vans filled when they hit the road. Exactly. You need those flowers sold. And the difference going back to supply and demand, what we lose in sales is not worth trying to raise the pricing that way.

SPEAKER_03 24:02

Yeah.

SPEAKER_00 24:02

And because there's still so many avenues for other retail florists to buy from, I think in general the prices are in check. And I'm sure there's markets where they're not, or some things can be different. But in general, and because you can ship in from further away as well if necessary, prices are pretty much market-driven. Like there's a somewhat of a cap. I'm not on the those Facebooks things.

SPEAKER_01 24:30

Yeah, no, yeah, like you don't have time for that.

SPEAKER_00 24:32

I'm not on the but when you say someone's getting jacked around, they're not talking that something went from two dollars and forty-five cents to two dollars and sixty five cents. Is that what they're talking about?

SPEAKER_01 24:40

We don't know, they don't say it right.

SPEAKER_00 24:42

That stuff does happen, like yeah, and in their mind to two sixty-five for a bunch of X, yeah.

SPEAKER_02 24:49

Right, right.

SPEAKER_00 24:50

Five and a quarter to five forty-five.

SPEAKER_02 24:52

Yeah.

SPEAKER_00 24:53

For sure. I don't know. I mean, when you're buying hundreds of bunches, that it does add up very fast. I get that, but we're looking at what is our fuel surcharge gonna be the last two weeks of January, first two weeks of uh February. Um, there's indicators out there to let you know, say that okay, well, you know, Trump's going into office, this, this, and this. So we estimate that you know our fuel surcharge is gonna go from 32% to 48%. So we put that in our Excel spreadsheet. Well, it's not that advanced, we just put put the number spreadsheet. Yeah, we got posts from our growers, we put that in the spreadsheet. And if something went from 525 to 545, we put 545 on the sheet.

SPEAKER_02 25:31

Yeah.

SPEAKER_00 25:32

And if we underestimated, we take it on the chin, or vice versa. You know, sometimes we come out the nickel better, and sometimes the nickel worse. Yes. But our goal is to get volume. We want the biggest slice of the Valentine's orders we can get from each customer.

SPEAKER_03 25:47

Okay.

SPEAKER_00 25:47

And that's our goal with the pricing.

SPEAKER_03 25:49

Yeah.

SPEAKER_00 25:50

So right now, most wholesalers have an early bird Valentine's special out, probably expiring sometime in the next couple of days, to be honest. I used to be able to quote and say Friday was our day. We've had to adjust to market conditions, you know, Portland's different than Albany, which is different. So I don't want to say when ours is done or cut off because I don't know for sure. But it's coming soon where the cutoff is. That's our lowest price. I guarantee it's our lowest price. So anyone who's listened to this, talk to your supplier.

SPEAKER_03 26:19

Yeah.

SPEAKER_00 26:20

The prices only go up from here. Now, just because someone said that's not true, okay. January 28th, could you get a special on something because a grower all of a sudden had an extra hundred cases and we bought them and put them into our markets? Of course. But I'm saying across the board, right? The price list only.

SPEAKER_02 26:40

Guarantee now, right.

SPEAKER_00 26:42

This is the lowest that we offer. Um, yeah. And it's partially because we take it right to the farm and we get our lowest price because the farm's only going to go up for us. We lock in our freight at this point. So my biggest set of advice would be whoever you're dealing with. I would I can't imagine someone wouldn't give you their lowest price this week, you know, yeah, for Valentine's.

SPEAKER_01 27:04

So someone said a month ago that there's a rate be a red rose shortage for Valentine's Day. Remember that, Lori?

SPEAKER_02 27:13

It was when I was on that SAF meeting. Oh, that's right. I went to that SAF meeting and it was one of the growers in, I don't I don't remember if he was in Columbia or Ecuador, and he was talking about because they had had a drought and then they had a ton of rain.

SPEAKER_01 27:29

That's right, Lori.

SPEAKER_02 27:30

That's what it was. That's what it was. She's not making it up. She's not crazy.

SPEAKER_00 27:34

So again, we were down with the Ecuadorian show was during the the drought was just ending. We just started to get the rain. And there was there was a low, low, low production. A plant should have been producing every 80 days, was now was stretching in the 95, 96. And then what's what everyone was trying to project that to Valentine's, and what is that going to mean? And now will growers be able to pinch because they won't have the cash flow to pinch, because that's typically you know that's what he was worried about. Yeah, and yeah, sure. But to say there's a shortage of roses.

SPEAKER_02 28:11

Yeah, he he said he he was worried, and because he also said the same was Puerto Rico?

SPEAKER_00 28:19

No, not Puerto Rico, maybe Guatemala.

SPEAKER_02 28:21

Guatemala, you're right. Guatemala, and they had too much rain.

SPEAKER_00 28:27

So like he was just there's not anyone that's listening to this that would ever buy a Guatemalan.

SPEAKER_02 28:32

Okay, okay. Well, this man was very concerned about Guatemala.

SPEAKER_00 28:37

Well, in Guatemala, they're in the market, and if they don't get to the market, then then those mass market big box stores will have to buy elsewhere if the Guatemalans right there. So it does affect second dairy market.

SPEAKER_02 28:48

Yeah. Yeah. This was interesting. Is it they this they were talking about the hollow the full the tulips, and then the guy was talking about those. So it was it was object.

SPEAKER_00 28:57

But when when I hear somebody say that, I my mind immediately goes, okay, so instead of paying a dollar eighty-five for that sixty-centimeter freedom, that means you're gonna pay four dollars and eighty five cents. Is that what he's trying to tell us for such a shortage? It's gonna go up times three.

SPEAKER_02 29:10

I don't think this guy knows price, this guy is a growth.

SPEAKER_00 29:14

Point being, I don't know, yeah. And the market won't soften at the end.

SPEAKER_03 29:21

Yeah.

SPEAKER_00 29:22

But I I guess if if that is the case, once again, locking in in the first week of December is your smartest move.

SPEAKER_03 29:29

Yeah.

SPEAKER_00 29:29

Because the market's not going to collapse in January 15th or whatever, because there won't be that flood of extra roses. Then maybe this makes the most sense forever to pre-book, because what happens is if a grower thinks it can produce X number of millions of stems for Valentines, they can produce uh 10 million stems of 60 centimeter fruito. That's what their plants, that's what that's what agronomists, that's what they're planning on doing. They're only going to pre-book 80% of that. They're not pre-booking 100 for two reasons. One is in case something's off, right? Because they're guessing that the 10 million, Mother Nature comes in, and uh some they and then if they do have it, they can they can still sell it. They'll know in early January, January 10th, they'll know that hey, we're above our 80%. You know, we're above 80, and maybe some do they might be 84% what they sell, but they they crunch their numbers to that type of 11. And they'll know January 10th if they're gonna have an extra, you know, 200,000 steps. And then that's where buying office gets the calls at that point to say, hey, do you need any extra? And then we start to know, like, oh, wait a minute, you know, farm X just told us that they're offering more than what we, you know, than what we want. They're they're willing to give us X. So then we start joting that down and say, well, they're in Kayumbe. So compared to here or there, let's hear if we're hearing it from farms on this side of the, you know, on this side of the sea or this the northern farms with the southern. So you start playing that game, you find out real quick if everyone is is doing better or not. But if this gentleman's saying there's gonna be very tight, well, then there's gonna be nothing available January 10th or January 15th, which means pre-booking again.

SPEAKER_01 31:15

Yeah, yeah.

SPEAKER_00 31:17

That's the hard part, right? For years, that market would collapse if you were risk tolerant, a retailer could hold off and not book a single red rose and probably skate right into January 28th, and yep, sure, they got the roses for 20 cents a stem cheaper or 22 cents a stem cheaper, and they bought I don't know what's a big number, a thousand, two thousand stems at twenty-two cents. Sure, they made an extra 450 bucks or whatever, right? Like looking around, 500 is 500.

SPEAKER_02 31:47

Right. But that's a big risk, yeah.

SPEAKER_00 31:50

And not have the quality of the farming you're used to guaranteed to send 500. I mean, how many dozens is that that you're saving how much? I think in general, our industry is because it's easier, we so much focus backwards. We uh wholesalers focused at the farms, retailers focused on the wholesalers or their suppliers, and try to squeeze every last little penny out of that system. And yeah, sure, it I don't think there's a ton of fat, but is there a way to get one more penny off or uh two percent off or something like that? I I'm I'm sure there are people out there that could prove to me that they buy better than Billboard Company buys because the way they negotiate and their timelines and how they perceive things. But if you took all that same effort and put it into marketing your flowers, that's what I was gonna say.

SPEAKER_02 32:36

Just market the crap out of your stuff and make money.

SPEAKER_00 32:39

That same amount of effort that they spent buying from four different wholesale and if you took that and went to your community and got involved with the schools and the different different associations, all you have to do is sell an extra ten dozens, and you're coming up with what you you're better off than what you did. And then you didn't squeeze your grower or your supplier down to the the nut. Like it's the same amount of effort, right? Like, yeah, where are you gonna put your time? I think our industry has been so focused on that backwards squeeze that it's difficult. Yeah.

SPEAKER_01 33:16

Yeah, it's it's easier to do that, right? It's easier for me to go to my wholesaler and say, hey, go down two cents, go down ten cents on this, than it is for me to get out there and be active in my community and and put forth effort and have relationships and post on social media and and collaborate with another business, all of those things that we always tell them they need to be doing. Borey is so good about just like telling them that. Yeah, and instead of focusing on negative.

SPEAKER_02 33:42

Right. I think the other thing that, and I've been having these one-on-one conversations with some of our members lately is educate your customers, find those opportunities when you're talking to them. If they come at you and say things like, well, you know, I can buy these at Trader Joe's, but like for this price, go, you know what? You can you could buy flowers at Trader Joe's. My flowers come from a grower, and you know, take that time to educate them the brand of your flower, the type of your rose, the quality of your rose. Put a story with it. Put your testimony with a clear story with it. That's the customer experience. That's what you're that's why people buy from a flower shop and be perfectly okay with them if they go, no, fine, I'm gonna go to the grocery store and buy it. Go, you can do that.

SPEAKER_00 34:36

That's how I and I I I'll still say this I think the more places that sell flowers, the better off we all are. And I know I have retailers that come at me every time I say that, because we want the the the population to see flowers everywhere, exactly. And we as a traditional segment, wholesale, and that's you know, yeah, eight percent of our business goes to mass market. I I'm happy to have that eight, don't get me wrong. And then if it grew to 10, I'd still be happy, right? But our core is is the truth. When we don't get enough flowers in enough people's homes on their desks, we don't do well enough to get that viral sensation. Thank goodness we have mass market. Because when somebody goes and sees flowers on somebody's kitchen table, sure they might ask where'd you get them from what? But the benefit is they sat there and stared at the flowers at that on that kitchen table. They were in here and buying, it's going into subconscious of how beautiful they were. Yeah, and where do they choose to buy from where they got recommended there or was a retailer or however, it's irrelevant. The fact is, we just need more people buying more flowers on a more regular basis. So let's be thankful that they're at there, right?

SPEAKER_01 35:50

And the florists are for the special occasions, and that's where they're gonna go for those special occasions when they want them delivered, when they want something more designed, right?

SPEAKER_00 35:59

It's like saying special occasions, yes, but I I special occasions can be a birthday, right?

SPEAKER_01 36:06

It doesn't have to just be oh yeah, no, no, no, that's what I mean. The birthday, an anniversary.

SPEAKER_02 36:12

A baby flower, something made. If I just want a wrap of flowers that I'm gonna throw in a vase, I'll pick those of a tree.

SPEAKER_00 36:20

Self-consumption is highly done via mass market, there's no doubt. It would be very difficult for retail florists to generate a lot of self-consumption, no doubt about it.

SPEAKER_02 36:29

Exactly.

SPEAKER_00 36:29

You take out self-consumption, the retailers doing really pretty darn well. Yeah, they just are, but because the vast majority of mass market self-consumption, it's not a gift. Yeah, if if if we can mentally say self-consumption's over here, it's a bucket, it's a huge bucket, it's 10 buckets, right? Whatever it is, let Trader Joe's or Kroger or whoever have self-consumption. It's gonna benefit us, it just raises everything. Focus on everything else, but instead we get so focused on Trader Joe's $5.99 or Kroger's $29.99 monster, or what it costs, goes this or that. That's really that's what we're focused on. That's the self-consumption.

SPEAKER_01 37:09

Yeah.

SPEAKER_00 37:10

And I'll go back to I remember when the first studies came out from Prince of Prince that showed internet floral sales, the direct to direct consumer, direct to consumer that was just going to kill. They had all these graphs showing everything. It went from 2% to 6%, 9%, it's at 11. It won't be long until you know it's over a third. Well, you know, it peaked at 11.2, and it hasn't been double digits since. And I I honestly haven't even seen it of late. Like it's there, but it's okay. Okay.

SPEAKER_01 37:43

Oh, yeah. Okay, yeah.

SPEAKER_00 37:46

But it was giving them glue. We were all done because uh internet direct to consumer. Yes. We were it was over. I mean, I sat through seminar after seminar. Um, Smithers Oasis called in 10 10 of the larger wholesalers at the time to have us listen to a private uh professor talk to us about what we're gonna do. How it was a big, big deal. It was scary. And now so we're very resilient. The industry is very resilient, very creative. Yeah, I think whatever gets thrown our way will be okay.

SPEAKER_02 38:25

I agree. Pivot, we gotta be able to pivot.

SPEAKER_00 38:28

Yes, and that's the beauty of what we do. Yeah, you're right. I still love the fact that we have same day delivery.

SPEAKER_02 38:34

That's crazy.

SPEAKER_00 38:35

Amazon doesn't have same day delivery. Well, I guess they can give you some.

SPEAKER_02 38:38

They lie, they're liars about it. They say they do and they lie about it.

SPEAKER_01 38:43

So back up a minute, and you mentioned something about congressional action days, which is in March, is that right? And you said anybody could come, there's about a hundred people who do, there could be 200. That's pretty much on your own. You can get involved, right? So it's on your own time.

SPEAKER_00 38:59

Oh, I'm sorry, yes, financial inside.

SPEAKER_01 39:01

Yes, right, right. Yeah. And how would somebody get involved in that if they wanted to do that and really jump in and under try to understand how Washington makes a difference in the decisions that really affect us, right? Congress congressional action days are March 17th and 18th in 2025.

SPEAKER_00 39:25

SAF loses money on Congressional Action Days. I'm as past president and past chairman on the board there. It's not a money maker, it covers the meals and the speakers and the organization and all that goes into it. SAF is doing that for the benefit of our industry. Because I know sometimes people say, well, why does it cost so much? Well, it it's also Washington, D.C. Things are right. So there are some costs associated, but with the networking and just just learning about our government and how everything works. If you've never done it, it's it's a large. I've probably done it 20 times. I don't even know how many times I've missed a few because of kids' spring breaks falling exactly on there. But other than that, I I'm there. It's good for our industry, and you just learn a tremendous amount. Any newbies are always paired up with uh people that have done it before. So you don't have to the I know my first few years, I didn't say the word, I just tagged along with somebody and learn how the systems work, learn how the buildings works, and security and how you get through, and then how when you meet with the congressmen and senators, how that all works, right? So there should be no fear from that perspective because you you you also get trained on the issues first. So that's part of it. You they have professional speakers come in, the lobbyists at SAF employees, they come in and they they explain how it all works. And so it's it's awesome from that perspective. You've never been, and when I say we typically have 80, we now put my SAF hat on, sorry. We're a lot of hats. Being a former uh uh president, I guess I can maybe still say that. SAF typically has 80, maybe up to 100 max, is all I've ever seen come there. And of that, probably 75% are the same. You see the same people, and 25% newbies kind of roll through, which is understandable. Things change and and and the like. But you could have 200 people, it wouldn't matter, like there's no limit to it, right?

SPEAKER_01 41:22

Okay, okay. That's good. I always thought it would be cool to always talk about one of these days.

SPEAKER_02 41:26

It's on our list. I I think it would be the most amazing experience to be able to walk through that and just be a part of our government for like a minute. What a what a cool experience that would be.

SPEAKER_00 41:42

Yeah, it's overwhelming from some perspectives from from like that, but I think it's phenomenal. Like I said, I was just there November 18th and 19th, just whatever a couple days ago, and zipping around and SAF is a first-class organization professional from that perspective. They use a grassroots lobbyist organization. Um, it's called Cornerstone Government Affairs.

SPEAKER_02 42:04

We have Josh, the guy Josh, is that his name?

SPEAKER_00 42:09

Joe B Joe Bischoff.

SPEAKER_02 42:11

Yes, yeah.

SPEAKER_00 42:13

You almost got me there.

SPEAKER_02 42:14

Bro, Brian.

SPEAKER_00 42:16

Joe Bischoff, Josh. Yeah.

SPEAKER_02 42:18

Josh. You know what? We're really close. I just put called Josh.

SPEAKER_00 42:23

Joe is a super ball.

SPEAKER_02 42:25

He was the guy that spoke at that webinar. He was the one that talked all of that.

SPEAKER_00 42:29

He would have been. I didn't see that one, but yes, he is our SAF's. I keep saying R. He's SAF's leading lobbyist. There's a long relationship with Cornerstone Government Affairs uh that that work together, and they're the ones that help get all the appointments and everything there. So no, it's it's exciting stuff. It can be like somewhat daunting, but also like some of these projects we worked on, whether it's immigration or farm bills or things like we've done over to it doesn't happen the first year, right? Like stuff is four and five years. So I think sometimes people get a little like, we're gonna go up and talk about this, like there's not what you have. No, but you plant the seed, it's it's a four-year process. If we're there every year and we talk about it, we make strides, and not that many industries and that many people show up in the offices of the centers and the people. And so it makes an impact. They remember us as as a group, as Society of American Florists. We'll all be wearing bouton ears and and crossages, and and we make an impact, that's for sure. And we're consistently there, and we're backed by SAF and Cornerstone, which are two very, very professional organizations. So we we make an impact. It's it's very exciting from that perspective. So if you look at it as a vacation at an extra day and go up and down the the Washington, you know, the see all the Smithsonians and stuff like that.

SPEAKER_01 43:52

Yeah. Oh yeah, that's great. Well, Bill, thanks for taking the time to explain all this to us and really give us a little bit of a little bit of a little bit of a all those details are a grain of salt because I'm sure some listeners are out there.

SPEAKER_00 44:02

Well, he's not sounding sounding. I should have looked at calendars and quoted some of that, but the general vibe, I'm confident what I said from the vibing perspective, I might be off on exactly.

SPEAKER_02 44:14

No, it was great. Well, we always appreciate having you on here. And it was good. Thank you so much.

SPEAKER_00 44:20

Thank you anytime.

SPEAKER_02 44:23

Thank you so much for listening to our podcast. We hope you enjoyed spending time with us because we enjoy spending time with you. If you did, make sure you hit that subscribe button or add the business and pleasure of flowers to your Google morning routine or your flash briefing on Alexa.

SPEAKER_01 44:41

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