Flower production and exports from Europe — and particularly the Netherlands — are  expected to be significantly reduced this winter as flower producers close, reduce production, alter cultivation techniques and switch crops in response to the energy crisis in Europe.

Sylvie Mamias, secretary general of Union Fleurs, the International Flower Trade Association, shared her thoughts with SAF Now on  how the energy crisis will ripple through the industry, and what florists can expect in the coming months.

Q: How are European farms reacting to the energy crisis?

A: Some growers have announced that they will stop production altogether, others will reduce production, adjust their cultivation strategy, cut back on lighting, delay planting and/or switch to other crops. Others will continue and keep investing in energy transition and innovation to remain future-proof. Overall though, many growers in the Netherlands report liquidity problems and risks of bankruptcy in the next months if the energy prices remain as high and unpredictable.

Q: How is that expected to affect supply?

A: There is consensus that an overall reduction in the production volume of flowers and plants in the Netherlands is to be expected in the coming months, as well as a smaller assortment. In turn, it is expected to have a myriad of consequences on the market in Europe and beyond. The flower market is entirely based on supply and demand. The combination of these various elements shall push prices up quite inevitably.

Q: Which areas of Europe are particularly hard-hit?

A: The energy situation is affecting the Netherlands in particular, as it relies extensively on high-tech greenhouses through wintertime, which are energy intensive. Other producing countries in Europe are also impacted; northern countries producing plants such as Denmark and Belgium; and southern countries producing plants and cut flowers such as Italy, France and Spain. But Dutch production in both cut flowers and plants is far above any other country in Europe.

Q: Are importers seeking crops from elsewhere? Is that feasible with the freight rates?

A: With the anticipated reduction of production in the Netherlands, diversification of sourcing will certainly offer some alternatives or complements to some extent, in particular during the European winter months, be it in East Africa or South America. This shall have an impact on prices and product availability globally. The logistics and freight situation worldwide under pressure for many months already, so there will inevitably be challenges ahead. Overall, some structural changes on the way the supply chain is organized for the European market can be expected with lesser local product availability in winter.

Q: Are there any crops in particular that may be in short supply?

A: Orchids in pots are the most impacted at the moment, with production area in the Netherlands being drastically reduced by 25 percent. Production of chrysanthemums and roses in the Netherlands is also under enormous pressure. Overall, the flower assortment and number of varieties produced in the Netherlands is expected to shrink with the viability of smaller (specific or premium) flower crops also under threat.

Q: What are the other impacts?

A: The Netherlands are at the heart of the floriculture and ornamental supply chain and market in Europe, with a whole business ecosystem built around it (flower auctions, trading companies, service providers, logistics and freight, breeders, etc.) that provides numerous employment and economic opportunities. That’s why the current situation in the Netherlands, and how it will evolve in the coming months, is so crucial and observed by many.

Ultimately, this will impact the whole supply chain and service providing industry, and not just in the Netherlands. Research and innovation in floriculture, in which the Netherlands is a global leader, as well as investments in the energy transition of the sector — which could help secure long-terms sustainable solutions for energy use — are now under pressure. In addition to the energy crisis, the flower and plants sector in Europe and globally is also faced with other challenges such as labor shortages, impact of exchange rates, pressure on freight and logistics, etc.

Q: What should U.S. retailers — who rely on Dutch premium varieties such as lisianthus, mini calla lilies, amaryllis, and other premium varieties — expect, and how can they prepare for impacts to supply and prices?

A: A reduced product assortment and higher prices are probably in the cards, but it remains extremely difficult to specifically assess and prepare for the wide range of impacts that could be expected. There might also be new opportunities that will emerge, as always in times of crisis. What is reported at the moment is a ‘wait and see’ attitude from retailers, and a reluctance to commit with contracts for specific quantities for next spring. This is not so surprising due to the global uncertainty and the many unknowns both at production and consumption levels, but it adds to the complexity of the situation. Several different scenarios could unfold in the coming months and as always companies will need to be flexible enough to adjust.

Amanda Jedlinsky is the managing editor of SAF NOW.