December 29th, 2022
Good day from the Wizard,
Happy Holidays! We hope you are having a great time.
For this edition, the Wizard has decided to sum up the 2022 Wizard Wand News, starting from the beginning of the year to where we are now!
2021 was an interesting and profitable year for the floral industry despite all the challenges. One industry expert of over 30 years told me he dealt with more crazy things in 2021 than in all 30 plus prior years. And now, 2022 changed dramatically in the last 2 quarters!
Here is the recap for 2022, and let’s start in January!
2022 had the makings to be a great year, with all the potential for a good economy combined with more weddings scheduled than ever. The key question: how will the buying public deal with the increased prices of floral products? Well, stay tuned!
Moreover, there are few issues faced in the first two quarters of this year!
July was a tough month and did not live up to the trends of 2020 and 2021, where the July numbers were good. Corona cases dropped in the States which helped logistics and labor issues. Moreover, the drop in Florida was especially helpful.
On the other hand, here are the facts that led to a rather unpleasant July 2022:
To summarize, we were in a totally different world this year. COVID-19 could not be blamed for everything, but it certainly led us into an uncertain world. Inflation haunted us as well. Let’s hope this reverses itself and we’ll be back to a growing economy in 2023!
I am feeling optimistic about this because of the economic factors that are potentially aligned in the right way for a quick change. Also, based on the Fed, the 4th quarter didn’t seem to be headed the right direction. Therefore, they had to take action about this.
September was good, but not as good as in 2021. The items that everyone wanted were tight in supply, namely: snowflake white spray roses, white roses, and fall color items. Most other items were available without any major issues. The wedding and event predictions based on early estimates did not live up to the original expectations; novelty and niche items were in high demand, and dried and preserved flowers were still strong and becoming part of the new normal.
Most of what we heard in the last quarter was: Inflation, Inflation, Inflation, Interest rates, Interest rates, Interest rates, Election, Election, Election!
We were hearing from many that the fall was less than stellar for sales. Everyday business was off, according to many industry leaders. With this, we continued to figure out consumer demand patterns as consumers’ expenditure habits changed since the peak of COVID-19 in 2021. Some even complained that oranges and other fall colors were not selling. So, at this point, things seemed clear as mud.
Production at many South American farms was lower than usual despite major expansions. Weather impacted production, yet there was plenty of product around. One major grower said he estimates that 90% of farms were throwing flowers away due to low everyday demand. European demand was low as well. Freight ran well in the last 2 quarters(even during the usual messed up high demand period of Christmas shipping.
Moreover, we know costs have increased. One industry expert told a group that the average cost of most goods increased by 22%. Moreover, it will be interesting when companies start to figure out their bottom line. Furthermore, one thing we are certain of is that everything is currently uncertain! As one industry expert reminded us, “Hope for the best and plan for the worst!”
Black Friday and Cyber Monday sales were strong. A total of 197 million shoppers engaged in spending. However, florists are very concerned that day-to-day sales are down, and even though we are not in a recession, it feels like it for some. Inflation lingered on, and high prices may be why sales are slowing in the floral sector. But as for sales, it went slow. Inflationary pricing must be restrained, especially in a category like flowers. We cannot price ourselves out of the market and have further reductions in sales.
Something changed in October 2022, and for some even earlier. Are we back to the old days and back to the old normal? However, let’s hope that the demand from 2021’s new normal comes back. In the end, the most important part of the equation is satisfying the consumer. Without the consumer, we have no industry. Moreover, we need strong sales 52 weeks a year. We all need a win-win-win!
As always, thanks for reading my rants! Happy New Year, and here’s to a great 2023!
The Wizard and the Above All Flowers and New Bloom Solutions Team
Happy New Year to all!