A market in bloom

The global cut flower market is in bloom. The value of the market is expected to exceed $50 billion by 2030, and is coming off a blockbuster year in 2024, in which US consumers spent a record $2.6 billion on flowers for Valentine’s Day. Let’s look into the rapidly growing market to identify the factors behind this growth.

The heart of the flower industry is the Netherlands, the home of the world’s largest flower auction – Royal FloraHolland. The auction is critical to the industry, importing and re-exporting 40% of all flower production globally. However, as transport technology has progressed, alternative producers, particularly those based in Sub-Saharan Africa, are challenging the Netherlands’ dominant market position.

Kenya is a large exporter of flowers, whose business has bloomed due to improved transportation, now providing around 35% of roses imported by the EU. There are two strong reasons for this, one being the abundant infrastructure in Kenya, with entire airport terminals dedicated to exporting blooms. This allows for direct shipments of flowers from Nairobi to the EU. Next-day transportation is pivotal for flower quality.

Secondly, the 1973 oil crisis increased the cost of raising flowers in greenhouses, moving flower production to the south, where the warmer climate made it possible to drastically prune energy costs.

Time is critical, as flowers lose 15% of their value each day after being harvested

Kenya is an example of how improvements in transport technology have played a key role in the flourishing of the cut flower industry. Transport speed is crucial, as cut flowers are perishable, requiring great care with respect to temperature or they can wilt, lose colour, and decrease in quality. This requires a ‘cold chain’, a series of temperature-controlled farms, lorries, planes, and boats, all allowing the flowers to stay fresh. Time is critical, as flowers lose 15% of their value each day after being harvested.

Agricultural tech has greatly improved in the last decade; innovations such as hydroponics and vertical farming are two specific solutions that have disrupted the flower industry. Hydroponics is a method of growing plants using nutrient packets as a soil substitute, thus allowing for greater control over plant nutrition and significantly reducing water usage. Vertical farming is the practise of using multilayer structures to grow plans, making maximal use of small urban spaces. Together these farming practises have made flower agriculture more efficient, lowering costs for producers.

The expansion of distribution channels in the flower industry has also played a major role in its recent expansion. The flower industry is traditionally a brick-and-mortar industry. Covid-19 disrupted this, forcing stores to move online, a distribution channel they have continued to adopt. The most popular form of this is the ‘order online – pick up in store’ model, which offers the convenience that customers grew used to in the digital shopping frenzy caused by the pandemic.

A surge in consumer demand has pushed the industry onto the fast track

Lastly, a surge in consumer demand has pushed the industry onto the fast track. A key reason for this is the backlog of weddings created by Covid-19, which will take several years to work through. Weddings are one of the largest sources of flower demand, behind global traditions like Valentine’s Day and Mother’s Day, with an average of 10-15% of a wedding budget being allocated solely to floral arrangements.

Increasing disposable income, with an average growth rate of 2.4% over the next four years, will likewise play a vital role in higher flower demand, along with a growing consumer preference for flowers in home décor, celebrations, and gifting.

The market for cut flowers is steadily growing into a behemoth. Technology, consumer preferences, and historic traditions all tie in together to enable the systemic growth of this industry. Further disruptions are expected, as e-commerce retailers are looking to shake up the market on a global scale, making the flower industry one to look out for ahead of an exciting Valentine’s Day 2025.