Where do all the Valentine’s Day flowers come from?

Sascha: [00:00:06] From Equity Mates media. This is The Dive. I'm your host, Sascha Kelly. Another Valentine's Day has come and gone and there's no escaping the mass of flowers seen around town and probably your Instagram feed, regardless of whether you have a valentine or not. But here's a fact that stopped me in my tracks yesterday. Valentine's Day alone makes up the 10% of the annual demand for cut flowers, and most of the flowers you see have actually come from the other side of the world. It's a complex and fascinating global trade. It's Wednesday, the 15th of February. And today, I wanna know just where did my Valentine's Day roses come from? To do this, I'm joined by my colleague here at Equity Mates. It's Darcy Cordell. Darcy, welcome to The Dive. 

Darcy: [00:00:55] Thank you, Sascha. Coming off, another Valentine's Day, another bit of money spent on flowers that will last a few days. 

Sascha: [00:01:03] Was it an expensive day for you, Darcy?

Darcy: [00:01:05] Reasonably not too bad a bunch of flowers and went to see a film at the Moonlight Cinema. 

Sascha: [00:01:12] Oh, that. That sounds like a lovely day. Look, I took my inspiration from The Bachelor, Matt Agnew, and. And I was pretty tempted to buy myself a full sized ice cream cake from the, but in reality, what I did is I went to the pub with a mate. So, you know, not an expensive Valentine's Day for me. But look, here's the facts, Darcy. Valentine's Day is big business. That's not a surprise. Let's start with the numbers. How much is spent on Valentine's Day around the world? 

Darcy: [00:01:43] Well, start here at home in Australia, and I'm not sure how much Magnus missing a cake cost. But according to research from the Australian Retailers Association, Australians spend an average of 118 Dollars each on gifts for their loved ones. That was actually a massive shock to me. 

Sascha: [00:01:59] That is a lot of money, although I don't want to sound like people don't deserve to spend money on loved ones. It is a love language buying gifts for other people, so it's totally okay. 

Darcy: [00:02:10] It's totally 

Sascha: [00:02:11] We wanna know other parts of the world. 

Darcy: [00:02:12] Yes. So in the UK, Brits spend about £40 per person on Valentine's Day. It sounds a little bit more reasonable to me, but in total, they spend £1 billion on Valentine's Day gifts last year and that number is expected to be similar for this year. We obviously haven't got the stats yet. 

Sascha: [00:02:29] Yeah, what about the US? What did their numbers look like? 

Darcy: [00:02:32] Americans are the real drivers of Valentine's Day 2020. That was the biggest Valentine's Day ever with $27.4 billion spent on the one day in 2021. It came back a little bit, about $22 billion spent on Valentine's Day. And last year it was around $24 billion spent. 

Sascha: [00:02:50] The Brits only spend £1 billion total. And the Americans are in the 20.

Darcy: [00:02:57] It's pretty crazy. Is it? They love their Valentine's Day. So to put that number in perspective, the average spend per person in 2020, that record year was $196.31 per person. In the US, it's expected to be about $120 though, this year and stay within that $27 billion. Over $2 billion worth of cut flowers are sold on Valentine's Day every year in the States. 

Sascha: [00:03:23] Those numbers are just insane to me, but it makes a lot more sense why Hollywood made that terrible movie, Valentine's Day. Now, when you think about those numbers, but you mentioned cut flowers there, which is something that I really want to focus on in this episode, because Cut flowers are kind of synonymous with Valentine's Day. It's a really easy gift. You know, a dozen red roses. They're on all the cards, they're on the images, on your social media, but also because it's such a fascinating story. How do all these flowers get to where they're supposed to be? How does the global flower trade work? So let's set the scene. Who are actually the people buying flowers on Valentine's Day? 

Darcy: [00:04:05] So I'll give you a breakdown of people who celebrate Valentine's Day in the US and 26% of married couples, they plan to buy flowers. 38% of children in the household plan to buy flowers. That kind of shocked me as well. But there's a lot of young romance, obviously. 

Sascha: [00:04:24] Well, let's be honest. That's going to be mum and Dad's money making its way to the kids to buy it for either mum and dad or someone else at school, right?

Darcy: [00:04:32] Yeah, I think so. There was always that nervous day at school when you're hoping for a rose tattoo I ever got. One. 28% of men plan to buy flowers. 33% of adults between 18 to 34 years old plan to buy flowers and 29% of full time employees. 

Sascha: [00:04:49] You've gone through full time employees, children, married couples. What's the actual gender breakdown here? 

Darcy: [00:04:55] Men, probably unsurprisingly, make the most Valentine's Day purchases, Buying 64% of the total flowers sold in the UK, though 41% of women expect to receive a bouquet on Valentine's Day and 39% of people celebrating Valentine's Day in Australia buy flowers for a loved one. 

Sascha: [00:05:14] So Darcy, it's no surprise that if you look at the population numbers, you add those statistics together. It is a massive market and on a global scale, the market for cut flowers is estimated to be $29 billion a year. It's one of my favourite traditions. Go to the market on a Sunday, buy a fresh bunch of flowers for the house. It's a really nice way of living up your living room. A little insight into my weekly routine there, but yet I can understand why it's a purchase that so many people like to make. 

Darcy: [00:05:45] And Sascha, of that $29 billion global market, between ten and 15% of that comes from Valentine's Day alone. 250 million roses are produced for this one day. 

Sascha: [00:05:56] So when I'm at the markets on Sunday morning buying a fresh bunch, those flowers aren't actually coming from Australia, are they? Most of them are grown internationally. 

Darcy: [00:06:07] Yeah, that's right. So in the Australian winter months, more than 80% of flowers sold locally are imported. And then in the summer months where it's a bit more conducive to growing our own flowers, still over 40% come from overseas. The majority of roses are imported because we just don't have the right growing conditions for them. And in the UK there's a cut flowers market of about £1.5 billion, but 90% of those flowers are imported and it's similar in the US, 82% of all. Flowers in the US are imported. So if you think about selling over $2 billion worth of those just on Valentine's Day, that's a lot of imported flowers. 

Sascha: [00:06:45] So where are these flowers actually grown then? We've got these huge percentages of them travelling all around the world. But I want to know who's benefiting from this trade. 

Darcy: [00:06:55] So we know the biggest buyers of cut flowers are Europe and the US. But I'll give you a list of the biggest growers and exporters. The Netherlands is number one and they have about 50% of all global flower production, although that number is shrinking. Colombia is number two with about 15% of global production. Ecuador in third with 10% and Kenya in fourth at 8%. But this is a market that's really growing. 

Sascha: [00:07:19] Pun intended there, Darcy. So what makes these countries ideal for growing flowers? 

Darcy: [00:07:26] There are three pretty crucial elements to being a flower producer, and they are having areas of high altitude with cool nights, proximity to the equator firm, maximum hours of sunlight, and then also cheaper labour is pretty crucial. Kenya is one of the biggest producers of roses. The country supplies one third of all roses sold in Europe and cut flowers are Kenya's second largest export. After tea, probably the world's most famous flower farm is the ten boozy flower farm in Kenya. It grows almost 8 million flowers a year and exports them to 60 countries worldwide, including all the ones we've spoken about that celebrate Valentine's Day. 

Sascha: [00:08:03] But what does it actually look like, Darcy? How does this singular flower? Well, I imagine there in a bunch travel to me here in Melbourne, Australia. 

Darcy: [00:08:13] It's a pretty remarkable operation. TAMBO Is these flowers? They travel 180 kilometres by road to the airport. Then a Boeing 747 can carry 90 tons of flowers in a slow week. In Kenya, about 30 flights are loaded with passengers, and a hold full of flowers will also leave the airport. But in the run up to Valentine's Day, this figure rises to about 100 flights. 

Sascha: [00:08:35] So our story starts with flowers being grown in Africa and South America. And then traditionally, at least, they didn't go straight to stores or customers markets. Most of them stopped off at the Netherlands on the way.

Darcy: [00:08:48] That's right. But the important clarification there is that traditionally so increasingly more and more flowers are going straight to stores or consumers or markets. But there is still a massive flower trade that goes to auction for more than 200 years. The heart of the global trade in cut flowers has been the Netherlands. And the world's largest global auction for flowers actually began in a pub, of course, before it was too small and they found another location and that was the start of life for Ireland. Now we are the biggest auction marketplace of the world. Royal Flora Holland, near Amsterdam. It still plays a critical role in importing and then exporting 40% of flowers from all around the world. This market alone sells more than 22,000 different varieties of flowers. 

Sascha: [00:09:36] I did not know that with that many flowers in the world, I can only, you know, tulips, roses, daffodils. 

Darcy: [00:09:44] And. 

Sascha: [00:09:45] Yeah, pretty much so. 40% of the world's flowers pass through Amsterdam. That is just insane when you think about it, especially for a supply chain where it's just so quick to have that around. It's wild to try and imagine that. But also flowers that are stay fresh for very long. They get grown in Africa, then they're flown to the Netherlands to be sold and then transported around the world. How do you manage to keep them lasting that long so that they're beautiful in your vase? 

Darcy: [00:10:14] Great question. They have to be transported very quickly using a cold chain. So basically a series of refrigerated facilities. So on the farms, the planes and the boats that they are transported on that all refrigerated and that puts the flowers in a dormant state. So they stay fresh. But for every extra day spent travelling, flowers lose 15% of their value and vase life. The length of time that flowers stay fresh is then usually about 12 to 15 days.

Sascha: [00:10:42] Here's a quick tip, Darcy. A teaspoon of sugar in the vase with the water makes them last a little bit longer and also re trimming the stems about after seven days can give them a bit of a perk up some time here. I know you wanted to know that. Let's take a quick break and then when we get back, I want to know how the flower trade is affected by inflation and other factors. Per dozen roses goes on. 

Darcy: [00:11:10] Your girl Cupid got me in a chokehold. 

Sascha: [00:11:13] Welcome back to The Dive. A quick favourite. Ask if you could please fill out our Equity Mates community survey. We make lots of decisions based on your input. Also, there is the chance to win $500. Awesome free tickets to FinFest, which this year is on the 11th of November. The link is there in the show notes, so please check it out. But today we're talking about the flower trade because it's Valentine's Day yesterday, just in case you missed it. And we're learning about how massive and complicated this global supply chain is. We've outlined how the global flower trade operates, but currently it's in a state of flux. That old chestnut, Darcy cost of living. How has inflation affected the price of flowers? 

Darcy: [00:11:56] Yeah, well, to put a number on it since 2019, flower varieties are up about 100% in price across the board. 

Sascha: [00:12:04] Wow. 

Darcy: [00:12:04] And the pandemic accelerated some big changes in that. The prices of flowers skyrocketed, especially in 2020 and 2021, because of fewer flights. We've talked about how it's such a global trade. There were just less flights available to transport flowers around the world, and then that put more pressure on local growers to try and pick up the slack. But they had to up their prices to keep up with the demand. 

Sascha: [00:12:27] So obviously supply chain issues, honestly, if you had a dollar every time that appeared on your bingo card, it's responsible for a lot of things that's impacted price changes. I imagine another factor that's impacting flowers is the increasing risk of climate change.

Darcy: [00:12:43] Yeah, another bingo point that climate change is making it increasingly difficult to plan farming activities. We know here in Australia last year was an extremely wet year thanks to La Nina and florists and growers have been forced to pass high costs of flowers on to consumers. Our rainfall was 26% above the long term average last year and then we saw flooding which destroyed flower crops. There are similar problems overseas. In Kenya last year there were severe floods which impacted growing. And the weather is just increasingly unpredictable. And some of these cooler climate places like Kenya and the Netherlands might no longer be suitable for growing. If global warming predictions are accurate. 

Sascha: [00:13:22] So flowers are getting more expensive and suppliers down, which is leading to a growing market for flower alternatives. I've seen a friend joke about the fact that she might do a fruit bouquet for her wedding, but I'm not sure how serious she was about that. What are some of the actual alternatives to a traditional bouquet that she might actually be interested in and not just a bunch of apples that she walks down the aisle? 

Darcy: [00:13:48] Well, I'll give you one that I came across, which is absolutely ludicrous. I'm not sure if many people can afford it, but if you've got the cash. One of London's leading florists called Blooming House, they've developed a limited edition creation, the 24 karat gold bouquet. 

Sascha: [00:14:05] Okay. I feel like I know where this is going already. 

Darcy: [00:14:08] So each bouquet has 200 hot roses selected at the peak of their freshness before they're then hand gilded with 300 hours of labour. Mind you, by the in-house flower, three experts in 24 carat gold leaf. Sascha, do you want to have a guess how much this costs? 

Sascha: [00:14:24] Just for anyone who doesn't know, because I had to. Quickly fact checking Google this gilded means covered by a thin sheet of gold. So to be hidden gilded. That's someone painting tiny little sheets of gold onto petals of a flower. How much it costs, Darcy, I'm just something exorbitant. That sounds like a lot of effort and really expensive materials. 

Darcy: [00:14:47] £40,000 per year. Okay. 

Sascha: [00:14:49] Holy moly, That's expensive. Yeah. 

Darcy: [00:14:52] However, Sascha, they are selling single gilded roses for £250. Not that. 

Sascha: [00:14:58] A bargain. 

Darcy: [00:14:59] But a more realistic alternative is maybe an artificial bouquet that could last your lifetime. They sell for about $10 each, but unfortunately, they don't have the same smell. 

Sascha: [00:15:09] If that's your main draw card for a bunch of flowers, then I can understand. Maybe you don't want to buy them, but the benefit would be they don't smell when they go off at the other end as well. Nothing worse than flowers that have hung around a little bit too long. Look, Darcy, we might wrap it up there today. Amazing to learn about where all my flowers are coming from. I'm starting to think about it from a sustainability point of view. If my flowers have been travelling all over the world, like maybe I should be looking at different alternatives. 

Darcy: [00:15:37] To carbon emissions. 

Sascha: [00:15:38] Exactly. But let's leave it there for today. Just a quick reminder that FinFest is back for 2023, the 11th of November. Is that date. If you do want to find out about early bird tickets, be the first to find out about the schedule, updates, the speakers, what's going on. Then go to equitymates.com or look at the link in our show notes and register there. If you want to keep the conversation going with us, then make sure you contact us by email thedive@equitymates.com or hit, follow and subscribe. Wherever you're listening right now, and then you're never going to miss an episode. Darcy, thanks so much for chatting about Valentine's Day with me today. 

Darcy: [00:16:14] Thanks, Sascha.