The Floral Insight Newsletter—November 27, 2024
This year has been unforgettable, and as it comes to a close, we’re thrilled to see The Bloom Show continue to grow, spreading floral industry news and the power of connection worldwide.
On November 25th, our season finale episode featured Melinda Knuth and Charlie Hall, floral industry trends and economics experts, who shared their projections for 2025 and a recap of 2024. Tune in now to prepare for the year ahead!
This month, I also had the pleasure of visiting the Gazipur Flower Market in New Delhi, India—a truly transformative experience. India’s flower industry contributes $3 billion annually to the economy, with 90% of production staying within the country. Flowers are predominantly purchased for religious holidays and daily ceremonies, with carnations, marigolds, and red roses being the most widely produced. The market was an explosion of all senses—sights, sounds, smells, and vibrant colors—a beautiful collision of cultures and energy. Having visited many flower markets, this one truly stood out as a next-level experience. Keep an eye on my LinkedIn and YouTube Channel for more updates.
Looking forward to 2025, The Bloom Together Event is shaping up to be our best yet, celebrating five years of innovation, collaboration, and community building. We’re proud to announce that top sponsors such as DWF, Jet Fresh, Esmeralda Farms, US Greens, Thursd, Gardens America, Seed Your Future, and many more have already committed to making this event unforgettable. Proceeds from this year’s event will be donated to Seed Your Future and the American Floral Endowment.
We’re also excited to announce that our 2025 Floral Industry Events and Conventions Calendar is about to launch! This is an invaluable tool for anyone in the floral industry looking to plan their year effectively. The calendar will go live in mid-December, and we want to extend a huge thank you to all the sponsors who supported this initiative, powered by the Bloom Together Initiative and made possible by New Bloom Solutions. If you’d like to contribute or apply as a sponsor, or register as a guest (free admission!), visit our Linktree page. Let’s celebrate together and demonstrate the power of networking, collaboration, and community in the floral industry.
As for next year, The Bloom Show is gearing up to deliver even more innovative and exciting content. We’re always looking for fresh ideas and new faces to feature. If you’d like to pitch a show idea, be a guest, or explore sponsorship opportunities, reach out to us at connect@newbloomsolutions.com.
We’re also welcoming more vetted vendors and sponsors for 2025! If you’re a farm, grower, breeder, entrepreneur, or floral industry service provider looking to grow your brand in North America, email sahid@newbloomsolutions.com to learn how we’ve helped many expand their networks, increase brand exposure, and drive sales in North America.
Your support means everything to us! If you’d like to help us continue spreading the word and connecting the industry, consider subscribing or sponsoring.
Wishing everyone a very Happy Thanksgiving and an incredible year ahead.
Thoughts from the Wizard
And now for some thoughts from the Wizard on some of the current economic, logistic problems, political and global issues, and climate situations that may impact you and your floral business.
Mergers and Acquisitions
We expect to see more M&A activity in the floral industry for 2025 and maybe even some for the remainder of 2024.
Private equity companies are playing a significant role in many or the current mergers and acquisitions as lots of money remains on the sidelines.
Weather and Fires
Heavy damage was inflicted to the greens business in Florida. Lots of acreage must be rebuilt without insurance money as most growers lost the ability to insure a few years ago after other major storms.
Colombia and Ecuador have also had strange weather and crops have been affected. There are potential timing issues for Christmas and Valentine’s Day. 40 cm production is coming in stronger than usual at the expense of longer stems.
Ecuador as been dry and recently Colombia has been experiencing a lot of rain, flooding and even hail.
In the States we have droughts in many parts of the country resulting in wildfires in the Northeast and West coast. Armellini was so close to the Camarillo fire that their terminal had no power, and they had to operate out of one of the local flower grower’s facilities.
Consumers and Growth
Consumer sentiment hit its highest level in seven months in early November with the University of Michigan’s Consumer Sentiment Index Climbing to 73. This level is the highest since March 2021!
US retail sales rebounded robustly in October, with a 0.74% month-over-month increase and a 4.13% year-over-year rise, fueled by lower gas prices and strong employment, as reported by the CNBC/NRF Retail Monitor, powered by Affinity Solutions. Core retail sales also rose by 0.83% month over month and 4.59% year over year. “Healthy spending resumed in October as consumers continued to benefit from this year’s job gains and higher wages,” said NRF CEO Matthew Shay.
The economy is strong despite a weaker than expected Jobs report for October. This was influenced by the hurricanes and the Boeing strike which was settled in early November. GDP grew at an annual rate of 2.8% in the third quarter. The stock market had numerous record closes during early November. We are hoping for a Santa Claus Rally.
Inflation
The consumer price index was up 0.2% in October and rose 2.6% from the previous year, according to the Labor Department. Core CPI, which excludes food and energy categories, gained 0.3% for the month and 3.3% annually. The data, which was in line with Wall Street expectations, showed inflation broadly moderating, but rising shelter costs were a major contributor to higher prices.
US labor costs increased by 0.8% in the third quarter, making this the slowest rise in compensation in over three years, according to the Labor Department’s employment cost index. Total compensation increased 3.9% from a year earlier making it also the slowest rate since 2021. Slower wage growth suggests a downward trend in inflation.
Jobs, Strikes, and the Labor Market
The US economy added 12,000 jobs to nonfarm payrolls in October, according to the Labor Department’s Bureau of Labor Statistics, below expectations of 100,000 new roles. The employment picture was affected by severe hurricanes as well as a strike at Boeing. Meanwhile, the unemployment rate remained at 4.1%.
The Fed
The Federal Reserve cut interest rates by a quarter point to an interest rate of 4.5% to 4.75%, citing a solid economy despite easing labor market conditions. The economy is growing at a “solid pace,” the Federal Open Market Committee said, adding inflation remained “somewhat elevated.”
Wholesale prices inched higher in October, though in line with expectations and mostly consistent with the Federal Reserve cutting interest rates again in December, the Bureau of Labor Statistics reported.
Logistics
The first half of November presented a decline in freight volumes from their early September peak. Volume as expected has started to rise the second half of November as we head to black Friday and Cyber Monday.
Amazon is providing new air cargo services for third-party shippers and has promised that they will not bump this freight to ship Amazon packages even on overloaded flights. Amazon claims with their current technology they will be able to reach their destinations on time by doing whatever is necessary.
The Panama Canal is getting back to normal after the drought of the last two years. Water usage has been optimized and new booking system. Wait times are being reduced and larger vessels are getting through. The canal is slowly returning to normal transit levels, aiming for 36 transits per day by January.
The overall freight Market looks better for 2025. After slowdowns in freight the market seems to be recovering. A lot depends on tariffs which I will discuss in the next section. Transportation companies are slightly more optimistic for the coming quarter, according to the BlueGrace Logistics Confidence Index for the first quarter of next year.
There still remains the possibility of port strikes early in 2025.
Tariffs
For months now, it has been clear that importers have frontloaded record imports to the country, largely to avoid expected tariffs. We are hearing many ocean containers are scheduled to arrive ahead of Inauguration Day on Jan. 20, 2025. Tariffs are anticipated to take effect in late February or early March.
The arguments against increasing tariffs on China often revolve around fears that:
However, there is a positive in the structure of U.S. exports to China.
China exports more to the U.S. than we export to China, leading to a significant trade deficit. While China floods our markets with manufactured products, its primary imports from us are in categories that directly affect Chinese consumers:
With current proposed tariffs of up to 60% on Chinese goods, some firms are looking at options that include increasing prices, changing production to other countries, and negotiating with vendors to reduce costs. There is a great deal of concern about the impact on consumers who are already affected greatly by inflation.
Companies have to decide whether to absorb the cost or pass it on to consumers, depending on how much the market will tolerate the increase in prices caused by the duties
Some foreign governments will likely subsidize their manufacturers to ensure they don’t lose U.S. market share to foreign or domestic competitors. For decades, U.S. manufacturers and policymakers have complained about China subsidizing manufacturing to reduce market share from U.S. domestic manufacturers. This means consumer prices could stay the same or not increase as much as the impact from the duty. The tariff cost could also be offset by reducing the foreign manufacturer’s prices and margins.
The Wizard’s View of Tariffs (and the general conventional wisdom)
Trump is geared up for a rapid insertion of new and or increased tariffs.
10-20 percent is expected for most countries and 60 percent for China. Mexico could be as much as 25 to 100 percent depending on the immigration situation. Of course, certain countries or industries could fall into exemptions or reduced rates. Current free trade agreements could be overridden. Obviously, increasing tariffs could also result in retaliatory tariffs on American goods. This could affect certain industries and disrupt the trade balance.
The use for the additional tariffs is to offset the cost of the proposed tax cuts and other priorities that need to be paid for.
There are many problems with tariffs, especially related to the florist Industry. In almost all cases, importers pay for tariffs that trickle down in the end to the consumer increasing prices and inflation making flowers less affordable and reducing the amount sold. In some cases, tariffs can force importers to find other countries with lower tariffs to source product or find product domestically. Alternative sourcing does not always work when you are in an industry that is predominately supplied with imports.
We support domestic growers as well as imports. The floral industry currently is mostly dependent upon imports of fresh flowers, hard goods, plant material, intellectual property, and numerous other things that come from other countries. Due to many factors over the last five years, the industry has taken a lot of hits from Covid, inflation, increased wages, and other unforeseen costs that have increased the price of product and is more and more difficult to pass on to the end consumer. This is resulting in a decrease in everyday business. Dealing with increased tariffs would add one more monkey wrench into the equation and hurt the floral industry even further.
Tariffs would be another factor influencing domestic producers as well. Domestic growers are heavily reliant on imported goods for their flower operations. Bulbs, seeds, and plant material mostly come from other countries which could have tariffs levied against them. Tractors, grading machines and other post-harvest equipment, computer systems and software, and even green houses are often imported as well.
The floral Industry has taken too many hits since 2020. Increased tariffs and a tough immigration policy with high levels of deportation will force less labor and increase prices even more in all industries, but especially in the flower business.
Hopefully Canada stays tariff free as currently their exchange rate is working very favorably for them as they sell to the United States. As of November 20th, the rate was 1.00 Canadian Dollar =0.715 US Dollars which makes Canadian export very attractive. The Euro weakened hitting a two-year low. On 11/22/24 the exchange rate was 1.00 Euro =1.04 US Dollars. The dollar vs other currency could help reduce the pain of tariffs if they should come.
We do not want to kill this industry to a point that only a select few can afford to enjoy the beauty of flowers.
Conclusion
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