Farmers hope consumers deck the halls for the holidays

Many California plant and flower growers worry the economic slump will be the "Grinch Who Stole Christmas," though others remain optimistic that consumers will still deck the halls and incorporate floral products from family farms into celebrations throughout the holidays.

Growers say markets are mixed-spotty sales in one area, buying surges in others-and there's no way to predict how flower sales will fare in the future.

Mark Collins, head of Evergreen Nursery, San Diego County's largest plant nursery, says he's counting on people buying a poinsettia for the holidays, but he said he wouldn't be surprised if they only bought one, instead of three or four as in years past.

Collins says his plant and floral production is planned years in advance so it's hard to adjust for a sudden economic downturn or a shift in consumer purchasing. He said Evergreen's holiday products offer consumers something to feel good about-at a modest price-and he's hoping consumers will catch the holiday spirit

"On the whole, I believe people will still want to celebrate Christmas, and they may want to buy more than in years past because florals are relatively inexpensive, offer good value and provide a traditional way for people to feel good," he said.

The California cut flower sector provides more than 75 percent of the nation's floral products, valued at more than $320 million in 2007. San Diego County leads the state in production of flowers and foliage, followed by Santa Barbara, Santa Cruz, Monterey and San Luis Obispo counties.

The state's mild climate and advanced greenhouse technology allows growers to produce an astounding variety of cut flowers and greens, including roses, poinsettias, orchids, lilies, tropicals and old-fashioned garden favorites like Delphinium daffodils, statice, iris, tulips, freesia, stephanotis, daisies and chrysanthemums. Added to that are wreaths, garlands, sprays and specialty items like mistletoe, pinecones and ornamental vegetables.

Ann Quinn, executive vice president of the California State Floral Association, said retail floral shops report a 30 percent drop in sales during the recent quarter and wholesalers are being very cautious not to over-order floral supplies.

The tally for supermarket floral sales won't be known for weeks, she said, with some experts anticipating respectable sales and others predicting lackluster consumer purchases. At this point it's a mixed picture with varying predictions based on the strength of regional economies.

Growers say they hope that holiday floral sales will follow the route of Halloween pumpkin sales. Farmers feared bleak economic news would dissuade consumers from buying pumpkins. But pumpkin sales were good to OK and the product moved. They theorize that, given the relatively modest price of pumpkins, families still visited pumpkin patches and brought them home for the kids.

"From reports I'm getting, it seems when the economy is hurting, people look to inexpensive things to make them feel good-movies, music, flowers," Quinn said. "I'm hoping the floral industry will be steady because it makes people happy to give and receive flowers."

Unfortunately that's not the case at the San Francisco Flower Mart, where cut flower sales have been slow, particularly for roses. Chris Neve, whose family grows roses and a variety of other fresh-cut floral products in Petaluma, said, "We don't grow anything that anyone else couldn't. It's very competitive-on the quality standards and the pricing."

The Neves, who run a fourth-generation greenhouse operation, sell to commercial florists, event planners and corporate clients thorughout the Western United States. He said their busiest time is usually February through June, but the holidays have traditionally offered good sales opportunities, as well.

On a recent morning, he explained the family's growing operation while crews harvested and packed roses in a dozen different colors. In the warehouse, workers twisted greenery into wreaths and garlands then loaded a refrigerated truck for the 1 a.m. drive through the fog to the San Francisco Flower Mart.

Starting in the wee hours, flower shop owners, caterers, event planners, building and hotel managers, designers and restaurant owners move through the market's flower-laden stalls and shops to make wholesale purchases and load trucks and vans.

Most of the flower sellers, including San Mateo County Farm Bureau President Lou Figone, say San Francisco sales have been very light, but they hold out hope for a last-minute surge in floral sales.

Society of American Florists Executive Vice President and Chief Executive Peter J. Moran said, "It doesn't matter what business you're in, there has been an economic slowdown. No doubt about it. Some of our members have said it's like business has fallen off the table."

Moran said, florists continue to fill orders for funerals, get-well bouquets and to celebrate new babies.

"In terms of the holidays, however, everyone is worried," he said. "We're being bombarded by doom and gloom every night when we turn on the TV or pick up a newspaper. Christmas sales, some say, are going to be terribly off. Sometimes we live up to our worst predictions. I expect we'll see a very soft holiday season."

One advantage of florals, he said, is that it's not a high ticket item like a refrigerator. Instead, it's a modest purchase that can "really lift spirits."

Because much of the floral sales and shipments were made earlier in the year, Moran said he thinks floral displays in shopping malls and entertainment venues were probably in the pipeline before the worst of the economic news hit. And, he said, florals are part of creating an attractive retail environment and improving merchandising.

"Those are things that get people in the door and retailers are trying to do everything in their power to get shoppers to come in," he said. "But, at this point, it's unknown if floral sales will hold up and provide a much-needed lift for retailers. Right now it's anybody's guess. Floral sales are tracked market by market and there can be big variations."

The Los Angeles market for fresh-cut florals probably will do pretty well, predicts Southern California Flower Growers Manager Scott Yamabe. "A lot of the Southern California floral business is linked to Hollywood-and corporate business, too."

For example, Yamabe said, sales suffered when Hollywood writers want on strike earlier this year.

"The global economic crisis has affected our sales," Yamabe said. "Orders are a little off from last year, but where the economic crisis is coming into play is that the big buyers won't be doing any speculative buying and be caught with flowers they have to throw away."

He said at this point in the holiday floral season sales may be down 10 percent to 15 percent, when compared year-to-date.

"We're hearing there's a drop in sales to supermarkets, " said Lou Neve, who owns L. Neve and Sons Nursery in Petaluma and is Chris Neve's father.

"But, I'm optimistic," Neve said. "There's still money out there to deck the halls. Sure, people are cutting back, but they're not cutting everything out."

Neve, who said he remains bullish on the future of California's floral sector and the prospects for his own operation, acknowledges bad holiday sales are possible. He said he's trying to prepare himself, his family and his business for the prospect of a very long economic downturn.

"We've scaled back our operation and our plantings," he said. "We've had to let a number of people go. We don't drive into town for supplies or deliveries every day like we used to. We manage our cash flow very carefully.

"In this business, there's a fine line between making and losing money," he said. "If you're in the market a week early with product, that could be a big mistake. You have to have quality product, be ahead of the trends and deliver at the precise time customers are buying. There just isn't any margin for error."

The state floral association's Quinn said flower growers are cautiously optimistic about future market conditions and will be very conservative in their plantings for the largest floral holidays, Valentine's Day and Mother's Day, and for spring weddings.

(Kate Campbell is an assistant editor of Ag Alert. She may be contacted at kcampbell@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.