Tuesday, February 9, 2016

Rose Prices Explained

Valentine’s Day rose prices are driven by supply and demand of the consumer.  Growers start charging wholesalers and retailers escalating prices in December and January.  These prices reflect the additional crops, labor and materials used to keep up with current demand as well as future demand. 
Growers have to produce enough roses in January/February to meet the needs of the consumer.  If a typical flower shop buys 100-200 roses a week year round, their supply for Valentine’s week is usually 10 times that or more.
Typically the difference in price is roughly 3 times what year round prices are for the same product.  In order to maintain the same level of profit and cover costs of goods sold, retailers must raise their prices also. 
Weather conditions during the growing season for the valentine’s crop, fuel prices and the economy also affect the prices on roses. 
Most roses are exported out of South America.  If they receive heavy rains, flooding, drought or pest damage to their crops, this affects the amount of supply coming out of South America. 
Fuel prices and the supply/demand equation that applies to fuel prices are a great example of the flower industry’s supply/demand equation.
With the expansion of the Internet and openness of trade with South America, many big box retailers (i.e. grocery stores) are able to purchase flowers directly from the grower.   Their advantage over smaller, family owned flower shops is the volume in which they buy.   Their order is generally for several thousands of stores, which guarantees them bulk discounts.   This is where the price difference is the greatest in grocery vs. independent flower shop.  
The difference in quality comes into play once the flowers receive their retail destination.  An independent flower shop’s staff is trained with years of experience on how to properly care and handle fresh flowers.  They are also able to pass on their education to you, the consumer, on how to properly care for your flowers once you get them home.  They will also package your flowers and plants to protect them from the elements once you leave the store.  Fresh flowers cannot withstand temperatures below 34-36 degrees. Green plants, 55 degrees.  Blooming plants 40-55 degrees.  

This article is simply to help the consumer understand what drives prices up at Valentines day and why there is a price gap between big retailers and smaller family owned businesses.