Hey there guys, welcome to another episode of Coffee Wine & Flowers podcast. In today’s episode we are talking about a topic that has seen a lot of buzz recently so I’m very much looking forward to tackling this one with you. Today we are talking all about floral industry inflation and flower shortages. You might have heard these words being tossed around lately in our industry and maybe you’ve experienced some of the effects yourself, or maybe you haven’t really felt the impact but you’ve heard it being talked about and you’re just like ok, what’s going on here. I want to help us get down to the root of the problem and start talking about solutions for how we can move forward in the face of this change.
So let’s start there. Let’s start by recognizing this issue for what it is: It’s a change. Often times in our businesses we will run into these instances where we’re going along minding our business and then all of a sudden something changes and it affects our flow. Part of being a leader and an owner of a business is to adapt when things change. We need to assess what’s happened, examine how it’s affected the current state of our operation and then adapt or adjust our actions and our systems so that this change is no longer an issue.
Now, I’m a big fan of breaking down and simplifying problems especially in situations that are overwhelming and can cause a lot of emotions. This is one of those situations. Dealing with pricing in our businesses can be overwhelming enough as it is – we are out here trying to place value on ourselves and to find customers who recognize the value and are willing to pay the price for our services. Then add things like a flower shortage and cost inflation on top of that, it’s normal for that to cause stress or cause us to kind of freak out and quickly become overwhelmed. Sometimes when we feel overwhelmed, we get a bit stuck and have a hard time figuring out how to move forward.
When we hear these terms going around, shortages and inflation… it’s easy to jump on that bandwagon and become frantic and allowing it to start influencing our actions, but if we are going to let it influence our actions and our decision making as a business owner, I think it’s very important to do a bit of your own research and know exactly what it is that you’re dealing with.
So part of that research is not only examining what each of these terms is really referring to and making the distinction between them – because they both separately affect our businesses in different ways. But also to do an assessment of the numbers and how they are really affecting your business specifically. The inflation and the shortages have affected every business differently, because our businesses are all unique.
Breaking it Down
So first off, to sort of start breaking down this problem that we’re looking at, I want to point out that there are two separate issues here to take into account: There are shortages, and then there is inflation. I hear these things being sort of lumped together, but I think it’s important to distinguish one from the other. Flower inflation can happen for a variety of different reasons: short supply, increased demand (which could have some overlap with the flower shortages we are seeing), but then there is also just natural economic inflation which we see happen in our economy as a whole based on a variety of factors going on in our world. And we clearly have seen our fair share of this in this past year.
The shortages that we are experiencing are a result of an event. There were events related to the pandemic that happened that interfered with the production of flowers. Last year in 2021, while the flower growing industry was still trying to catch up from the production halt caused by the pandemic, South America experienced an unusually cold and rainy season which further hindered their production. It was due to the combination of those two events, plus the fact that an entire year of events in 2020 were postponed to 2021 causing a huge event boom in 2021, that we began to see a shortage in roses that industry experts say will continue through 2022.
Every Florist’s Experience is Unique
So, what do these shortages and inflation mean for us florists? How are these really affecting us? Well, to answer that, I would ask you to take a look at your own business. What has your experience been? Have you struggled with placing orders for roses in advance and your orders being left unfulfilled? Or have you been receiving your rose orders just fine? Maybe you’ve been receiving your orders, but you’ve noticed that the pricing seems higher than it was before. For me personally, I have not had issues with order fulfillment. It’s possible that other shops have had problems with this. And this could be based on many things. It could be based on the location of each florist’s wholesaler and their ability to source certain items, it could be the specific varieties they are ordering, it could be the volume they are trying to get their hands on. For most of my events, I only need a few bunches. Some shops need 1,0000’s of stems. This is what I mean by every shop will be affected differently.
So do an assessment and look at how it’s affected you. And if you really want to be smart with your pricing, don’t just assess from a general viewpoint, take it a step further and look at the actual data.
Look at the Facts + Data
I am a person who likes to break things down logically, and one system that helps me to to do that is to look at the facts. So as I started to hear more about flower inflation and shortages and price increases, before I began jumping to conclusions and allowing myself to become stressed out and overwhelmed, I first wanted to look at the actual numbers and look at the actual evidence. So I dug up a handful of invoices from 2019 and 2021 to compare. I did a little data analysis, and I chose 10 different flower varieties that I use relatively often, and I grabbed the stem prices from 5-7 different invoices and took the average of those prices for both years.
This was not a perfect study, but my reason for doing this was just to get a clearer picture of what’s really going on with flower pricing, for my business specifically. Without boring you with all of the data, I found that for me, there were a few flowers that had gone up in price noticeably and there were also quite a few that had not really changed in price. Then in the interest of gaining another industry perspective, I asked my wholesaler about it because I know that they deal with growers and look at stem prices on a huge scale and have sort of had a front row seat to what’s been going on with supply and pricing. And I said, what exactly do you see happening here? Are the shortages still a thing? How does it look from where you’re sitting? And she proceeded to point out to me some flower varieties that they’ve seen price spikes. Turns out a lot of those specific varieties were ones I don’t use often – Anthurium, Calla lilies, and afew tropical flowers…And there were some that I do use often, like larkspur and stock and white roses, and the spikes she saw in those flowers supported what I saw in my mini study.
So my point in sharing all of this is, it’s not enough to just listen to hearsay and jump to conclusions and act rashly. Pricing is such an important and delicate factor in the success and sustainability of our businesses. It has to be addressed with the utmost care and attention and you need to really understand the numbers. So do an assessment and look at which flowers you buy, what you were used to paying in the past and how much you’re paying now, and make sure that you constantly update your price references so that when you make your recipes you are pricing accurately.
Using Order Pre-Books
When I build my recipes, I have a lot of stem prices sort of memorized from what I’m used to paying. I quickly jot down Quicksand roses at $1.25 and Ivory Majolica at $1.10 and Stock at $0.80 cents. But it’s an important practice to review invoices and keep a pulse on what we’re spending on each stem. If one of those prices jumps, is it just the price for that specific week? Or is that the price that you are now seeing consistently? Take these mental notes and make sure when you create your recipes to give your client pricing, you are pricing on the most recent data.
Another tool that I use often when creating my flower orders is what’s called a pre-book. Your sales rep is being fed price lists from growers and suppliers on a weekly if not daily basis, so they are going to be the ones who have the most up-to-date pricing information. What’s the easiest way to gather this information from them, you ask? We ask for what’s called a Pre-book.
An order pre-book is basically a price estimate that we can request from our wholesaler for an upcoming event. So once we’ve created our event recipes, we will send our order to the wholesaler and they will send us a pre-book showing us preliminary pricing (based on the market at that current time) and then we have a couple of weeks to make any necessary adjustments before placing out final order about two weeks before the event day.
Once we have the pre-book, we can go back into our recipes and re-adjust the stem prices and see if we are on target. If the pricing is too high and our margin is not where it should be, the next step for me is to go in and see if I can adjust the recipe to see if I can make it work for the same price I originally quoted the client. My goal is not to have to raise the client’s pricing if I can avoid doing so. This can obviously cause turbulence for the client and I want to avoid that as best I can.
So I will go into the recipes and look at the varieties that have jumped in price and see if I can sub anything out for something else while keeping the same overall look and feel. It could be that this particular bride didn’t specifically request peonies but I have them in her recipe. So if that’s the case I might need to sub those out with something a bit more cost effective. I might even go back to my sales rep at this point and say hey, are there any subs that we can make here that might be a little more budget-friendly?
Adjust Recipes with Client’s Best Interest in Mind
I try and consider the context of the situation and be thoughtful about each wedding from the perspective of my client. Obviously where your clients are concerned, every wedding needs to be handled with care. You know each of your brides best and what their tastes are, how discerning they are, and their dream that was communicated. Some clients of mine really identify quality and attribute a lot of value to the finer details. Some of my clients are more trusting and just looking for an overall vibe. So try and be strategic here, and make thoughtful choices with your client’s feelings and best interest in mind.
So once you’ve gone back through the recipes, adjusting what you can, it just may happen that you find you can make a few adjustments and still hit your margin. In that case, there is no need to even involve the client. There is no use causing stress or worry for a Bride-to-be. They have enough on their plate, and it’s usually best to try and solve problems behind the scenes without involving them, if and when possible.
However, in some cases you might try to adjust the recipes and, maybe it was a tight squeeze to begin with and you really can’t seem to find a way to make the pricing work. Then the question becomes: How do I explain this to my client? Do I ask them for more money? That’s a bit awkward…What do I do here?
How to Level with Your Client Appropriately
I would advise you, in this situation, or any delicate situation for that matter when your clients are concerned, and try and resist the urge to pull out your contract and start going into defense mode. We need to remember that this is an extremely important life event for our client, emotions are high, and you still have an opportunity to perform the task you were hired to do without causing them additional stress. With any problem that may come up, there is usually a way to find a solution without creating tension or turbulence… but in order to do that, we need to separate the emotion of what’s happening from what’s really happening.
Allow yourself to pause and recognize that these questions bring on a whole new set of emotions. You may start to feel fear or uncertainty. Allow yourself to feel those things, but then, when you’re ready to tackle it, know that we can break this down just like any other problem.
In my experience, when it comes to clients, honesty and transparency go a long way. At the end of the day, your relationship with a client is a relationship. And the key to any successful relationship is being able to be sensitive towards the other person’s needs, wants and desires, and to communicate clearly and effectively to arrive at a solution where both parties’ needs are met. And if you can master that skill, that is going to go a long way with your clients, and in your business.
So, what does that look like in this situation?
This is the point in time where you would decide when would be an appropriate moment to bring this up to your client. I would not make it a big thing by setting up a meeting or a call, but I would look at your calendar and see when you’re going to be meeting with the bride next. If it’s close to the wedding and you aren’t going to be seeing them again, then maybe ask them if you can schedule a time to jumo on the phone. Find an appropriate moment with your client to calmly explain the situation. Let them know that you’ve looked at the numbers and done what you could do minimize the effects of the cost increases. Let them know that it is possible to stay within the original budget, but they might need to make a few changes or sacrifices due to the current situation. Or as an alternative, let them know what the additional amount would be to keep the designs the same.
Be aware that your professional expertise is going to be extremely valued and appreciated in this moment. By simply assuring the bride that these small changes won’t affect the overall look and feel that she is envisioning – that will often be enough for her to move forward and trust in your expertise to make the necessary changes to the design recipes. Or, if your intuition tells you that she really has her heart set on those high end flowers, simply assuring her that the extra funds are going to be well worth it, can be very encouraging.
Giving her a choice on whether to change the design or spend more can be a difficult question and she may not know the immediate answer. it might even be a bit emotional for your bride, so just be sensitive to that.
But basically, in this conversation you want to present the situation, offer a choice, offer heartfelt suggestions and encourage your client that they can trust you and that you are confident you can bring their vision to life. It’s really that simple!
So, to sum up, in dealing with these increased costs, or really anytime difficult changes present themselves in our business, before letting emotions dictate our actions we want to acknowledge those feelings, but then turn to the facts and the data. We want to break down the situation and gather as much information and context as possible to really understand how it’s affecting our business specifically. Then, if possible, we want to try and resolve it without causing additional stress to our client. If absolutely necessary, we want to find an appropriate way to communicate this to the client, provide their options, provide suggestions, and reassure them in moving forward.
These practices don’t just apply to flower shortages. This can be applied to other situations too. There are other areas we are dealing with shortages and inflation in our businesses – there are supply chain issues with vases and hard goods, gas prices are insanely high at the time of this recording and there will be other hurdles in the future. The rules of problem solving are so useful and can be helpful in a variety of situations. Assess the situation, adjust your course, and communicate if necessary so that you can both move forward towards a mutual solution.
Friends, in our jobs we can only do our best. There is a lot of emotion involved because we are human and yes, sometimes not everything is in our control and that can feel scary at times. But something we are in control of is how we handle certain situations and how we choose to move forward. So I want to remind you something that my 3rd grade teacher used to say and I always remembered it: every problem has a solution.
I hope you found this helpful today, if you have any other questions, you can always reach out to me and we can figure it out together! I’m here to support you and I want your business to succeed.
Much love friend! Until next time!