As the novel coronavirus has become more widespread, U.S. companies, businesses, state agencies and schools are bracing for impact — and floral industry professionals are closely monitoring the situation in their local communities and at the wider national and global scale.
U.S. officials have so far confirmed 11 deaths and more than 140 cases connected with covid-19, the disease caused by the virus. Media outlets are currently reporting that the outbreak is easing in China, even as India reported an increase in cases and Iran and Italy recorded 92 and 79 deaths, respectively.
Rachel Martin of Ballard Blossom Inc. in Seattle is located about 20 miles from the Life Care Center of Kirkland, Washington, where several residents have become sick and at least three others have died. (Ten of the country’s deaths related to the virus have been in Washington state.) Martin said the outbreak “certainly is concerning.”
“Several schools have closed for cleaning, I have been wondering if any of the hospitals that we regularly deliver to will change procedures for deliveries, or cancel all together, not wanting extra people around,” she said.
The news also gave Martin pause in placing a product order for an upcoming auction. “I am afraid they will postpone or cancel the event and I will be stuck with an abundance of flowers” during what could be an especially slow March, she said.
Ultimately, Martin placed the order for the mid-month event, but it was a tough call: Earlier this week, Washington Gov. Jay Inslee (D) said “people should prepare for disruptions in their daily lives.”
“Folks should begin to think about avoiding large events and assemblies,” Inslee said. “We are not making a request formally right now for events to be canceled, but people should be prepared for that possibility.”
Corporate Events and Travel Fallout
Across the country in New York City, Nic Faitos reported Starbright Floral Design has seen three “major corporate event cancellations” connected with the outbreak and fears related to its transmission.
“Two hotel chain groups canceled trips where they entertain their top tier clients Twitter has put a stop to all unnecessary corporate travel,” Faitos said. “We are also finding that hotels are having a lower occupancy rate, and since we are heavily invested in the travel and event space, we are definitely affected. Our credit card clearing is about 35 percent lower than it should be.”
The travel industry has already been hard-hit by the outbreak, with major international conferences canceled, dramatically diminished demand for flights to and from hard-hit areas and corporate decisions to decrease employee travel for the time-being. (In addition to Twitter, other high-profile companies including Google, Amazon and JP Morgan have made similar decisions, discouraging workers from traveling and encouraging remote work.)
According to a survey of 400 businesses by the Global Business Travel Association, “nearly half of businesses have already canceled or postponed at least some meetings or travel.” The group estimates that up to 37 percent of business travel is at risk of being lost — making the outbreak potentially as damaging to that industry in the short term as 9/11.
Some industry businesses, too, have decided to limit employee travel to certain areas for the time-being.
Marco Groot, CEO of Hilverda De Boer USA, which specializes in the sale of flowers, plants and cut foliage, said the company has “communicated a policy to our colleagues worldwide to postpone travels until further notice. We don’t want to jeopardize people’s health in anyway.”
The decision meant backing out of the company’s planned participation at the World Flower Expo this month in New York City — a hard decision, according to Groot. “We love that show and it is a great opportunity to see so many people in the industry in one place.” (At press time, major industry events, including the World Flower Expo and AIFD’s July 2020 Symposium, had not announced plans to cancel or modify gatherings; The International Association of Horticultural Producers met this week in Miami and the Society of American Florists’ 40th annual Congressional Action Days kicks off Monday in Washington, D.C.)
Chrysal International also “has sent out a new policy on travel to certain locations,” according to Mimi Martinez Pacheco, marketing manager. “The company has let all employees know that their health is important and has advised everyone to take all symptoms serious.”
A Damper on Wedding Season?
The outbreak could also affect the wedding industry and the busy upcoming spring season.
For example, the American Bridal and Prom Industry Association recently shared with a number of news outlets that 80 percent of the world’s western-style gowns are produced in China. “We have spent a lot of time monitoring the situation in China and I believe a lot of disruption is going to happen,” James Marcum, CEO of David’s Bridal, told CNN. “It’s not only with bridal gowns but there’s the bridesmaid side of things, too.”
In Charleston, South Carolina — a top site for destination weddings — Lisa Hays Holmes of Tiger Lily has been in close communication with a bride in South Korea whose wedding is scheduled for July 2020.
“She has contacted us letting us know that she is a schoolteacher and that her school is closed now for two months due to the virus scare,” Holmes explained. “She is only allowed to leave 30 days ahead of her scheduled wedding date and wanted to ask how to handle the situation if she cannot leave.”
Another bride based in London also reached out to the shop — she’s considering moving her wedding to Charleston from England because of outbreaks in Europe.
Holmes said, so far, she and her team have been able to work with the bride in South Korea, and they anticipate being able to continue doing so. The business has not revisited or revised its wedding contract, but in social media posts on industry Facebook pages this week, a number of florists noted the need to review such language, to ensure businesses are covered in the event of cancelations.
Floral Management contributing writer Heather Waits of Bloomtastic Flowers and Events in Columbus, Ohio, said she hasn’t personally had any cancelations yet, but that she’s heard of event florist colleagues experiencing it already. Waits added that, depending on how the virus spreads and whether it affects the industry more, she’d consider sending a proactive email to brides to explain the industry supply chain and any disruptions, and to emphasize that “it’s even more important now to get orders in early and to be prepared for things to not be available” — if substitutions are necessary.
Supply-Side Logistics
On the supply side, floral industry businesses in the décor and hard goods sector continue to monitor the situation closely.
Nick Fronduto, a member of the Society of American Florists’ board of directors and the head of Jacobson Floral in Boston, said he and his team are “still waiting to see how this flushes out.”
“Factories came back from Chinese New Year later than normal, pushing production back,” he said. “We have been told that factories are coming back online, however, not sure in what capacity. Owners have said that if there is a positive virus test for any worker in their facility, they will shut down. Given our 90-day lead time, it remains to be seen what the actual impact will be.”
Accent Decor is “working diligently to minimize the impact of the coronavirus,” said Sarah Bagle, the company’s creative director. “Our consistent practice is to keep several months of inventory on-hand for most items within our product line. As a result, with the information we have today, we anticipate minimal interruptions to our day-to-day operations.”
Bagle added that the company has “built close relationships with our partners in China and elsewhere overseas. Our partners have agreed to work closely with us to keep our shipments moving as scheduled. We will continue to monitor the situation over the coming weeks and will have a clearer picture of the impact to our business as the situation develops.”
Anne Stewart, vice president, North American Floral Operations, Smithers-Oasis Company, said the company “has not seen any issues with supply up to this point.”
“We are quite protected in that we have 20 operating units and are in 140 countries,” she added. “That said, the information on the virus is changing constantly and so it may be very different in a month or two for the entire industry.”
Pacheco noted late last week that all five of Chrysal International’s production facilities and 14 operating offices worldwide “are operating at 100 percent, including the ones located in Europe and Asia.”
Laura Shinall, president of Syndicate Sales, said that, “from raw materials perspective, we are still in a ‘wait-and-see’ mode. We are anticipating some longer lead times and potential supply disruptions, but so far, we are OK.”
When it comes to imported finished goods, Shinall said the company is currently experiencing “a one- to three- week delay” on orders waiting to be shipped, with longer delays on items still waiting to be produced.
“We are extremely concerned about the people who work on our behalf overseas,” she added. “So far, no one is experiencing symptoms or been diagnosed. For that we are grateful. No one can predict how the ports will handle the influx of business once full shipping resumes. Backlogs are sure to be an issue. Even after the all clear, we believe all industries will be feeling the effects of this for a while— the floral industry is not alone in feeling the disruption caused by the virus.”
In terms of fresh product, Groot said that, for now, Hilverda De Boer’s U.S. market isn’t seeing direct effects — even as dramatically lower demand and altered shipping logistics — including closed ports — hit Asian and European markets.
“For U.S. flower market, it really has had no effect yet,” he said. “We import from all over the world, but shipments still come in through the same flight schedules, that is — for now!”
Meanwhile, Martin Vered, the chief commercial officer for the Dutch flower company FleuraMetz said the company’s location in Shanghai “has been closed by order of the government for several weeks now. We expect this to continue for the foreseeable future.”
He also noted that for a least a week Italian flowers “have had sporadic difficulty leaving the country. We also expect this to continue for the foreseeable future…In the short term, the supply chain may get interrupted, but we’re working with all of our transport partners to create contingency plans if and when possible.”
As to the question of costs, Vered said the future is hard to predict. “We expect the situation to potentially drive up if certain supply areas close down for longer stretches of time, which has yet to happen.”
At press time, Christine Boldt of the Association of Floral Importers of Florida, said she has not heard from any flower importers out of South Florida “being impacted by the virus.”
SAF will continue to update its members on this story.
Mary Westbrook is the editor in chief of Floral Management. Katie Hendrick Vincent, SAF’s senior contributing writer and editor, and Bruce Wright, contributing writer, also collaborated for reporting in this story.
