The return of event work, diversified product lines, higher price tags, and a consumer trend toward more spending is driving a substantial increase in sales and net profits in the floral industry, according to respondents to the Society of American Florists’ Economic Outlook Survey.

Sales in the first two quarters of 2021 were up between 11 and 30 percent for most respondents compared with the same period last year. Only 5.3 percent of respondents reported that sales were lower than last year. The survey, emailed to respondents on July 7, had a response rate of 3.7 percent and offered several insights into how the floral industry is growing post-COVID.

“It doesn’t surprise me that top line and bottom line are up in terms of flower sales and profit,” says Charlie Hall, Ph. D., the Ellison Chair of Floriculture at Texas A&M University. “We’ve seen during this staycation that COVID has forced upon us a new appreciation for the role of flowers. It’s a means of connecting and showing that we care.”

Respondents noted that they’d raised prices to cover the increasing cost of goods. Even so, net profits remained strong with nearly 90 percent of respondents reporting gains in net profits. Of those, 33 percent reported net profits up between 11 and 20 percent.

Many Factors Contribute to Strong Sales

While some respondents reported their sales are simply rebounding from the slowdown in the first half of 2020, others said their sales numbers are climbing because they invested in their businesses last year. For instance, offering a more diversified product line, such as gift baskets, plants, and apparel, has boosted sales for many florists who responded to the survey. Improvements to search engine optimization and websites have also brought more business, respondents said in the survey comments. Those changes, combined with the return of event work ­­— especially postponed weddings and celebration of life ceremonies — has amounted to record sales for some florists.

“Our sales have been crazy,” says respondent Mariah Schultz, of Blumen Meisters Flower Market in New Braunfels, Texas. Sales at her business, which offers plants, gardening supplies, books, and apparel in addition to floral designs, have doubled since last year, she said. She’s used the extra revenue to acquire a rental company to support her wedding business.

“We are trying to read the market really well, choosing nice gifts people are interested in,” Schultz says. “There is this element of consumer excitement to go out and actually purchase things. There is a tactile experience to shopping that consumers have gotten back to some degree.”

Another respondent noticed a spending trend that is typically only seen around holidays.

“People are throwing money at me like it is Valentine’s Day year-round,” said one survey respondent.

Lisa Marshall of Oneida Floral and Gifts in Oneida, New York, has also noticed her customers spending more, especially on home décor items.

“I think people in my area had money to spend, whether through the stimulus or because they hadn’t spent it on things like trips,” she says.

Hall refers to this type of spending as “revenge consumption.”

“We’ve been cooped up in our homes,” he says. “There are folks who are engaging in revenge travel and revenge consumption.”

The question is, how long will it continue? “That’s the great conundrum,” Hall says.

Rising Costs, Changing Prices

Respondents indicated they expect to see steep increases in spending this year for labor, perishable products, and hardgoods. Factoring into that spending is inflation, which was the cause of great concern.

Hall doesn’t foresee much relief in inflationary pressure for the next year to 18 months. It will take that long for supply chain disruptions to normalize, and while the cost of materials for cultivating flowers may decrease, other factors — such as a shortage of drivers in the trucking industry — may never normalize, he says.

He urges those in the floral industry to adjust their prices.

“I think that right now we have a great deal of cover as industry for raising prices because consumers do see all this inflationary pressure talked about in the media,” Hall says. “Subconsciously, they expect prices will be increasing.”

The price increases to the end-user are likely permanent, Hall says, regardless of whether the cost of goods goes down as the supply chain normalizes.

Changing consumer perception that flowers are a necessity, not a luxury item, will be important when demanding higher prices, Hall says.

“We are in the midst of a health crisis — they are a necessity in our lives,” he says. “We need to talk about the functionality flowers play. That’s what makes people more willing to pay the prices on the product we demand.”

Staffing Woes

Hiring and retaining staff remains a concern for many in the industry.

Difficulty attracting non-seasonal employees for experienced positions was a challenge for nearly 60 percent of respondents. About 56 percent of respondents reported the same challenge hiring for non-seasonal entry-level positions.

Respondents said they are being proactive by advertising job openings on several platforms, paying higher wages to remain competitive, using current staff to get referrals ­– and offering referral bonuses to current employees. (For more recruiting strategy ideas, be sure to attend “Recruiting in a Post-Pandemic World” at SAF Orlando 2021, and check out SAF’s Career Connection courses on staffing.)

Floral business owners are also trying to improve work conditions for current staff by providing raises and other benefits contingent on profits and giving employees a flexible schedule with more time off.

About 32.4 percent of respondents said they’ve streamlined their business so they can operate with even less employees than they had pre-pandemic.

Building on Momentum

Despite the rising cost of goods, supply chain issues, and hiring challenges, 87 percent of respondents said they feel very optimistic or optimistic about finishing the year strong. They credited their expectations to changes in the way they do business and consumer excitement to shop in person and attend or host parties.

“Customers are out and buying things such as flowers and plants more than last year,” one respondent wrote in the comments. “We sell uplifting products, and the customer wants to lift spirits through our product.”

A few respondents noted that their revamped websites were bringing in more sales, and they expect other improvements, such as hiring out marketing services, improving search engine optimization, and upgrading point of sales systems, to continue to pay off.

Others commented that the changes they’ve made have brought new customers, who value the dedication and service florists provided during the pandemic and continue to patronize their businesses.

Marshall, who has been in the industry for 40 years and worked solo through the pandemic, says her hard work has earned her new clientele.

“I think we’ve gained a new market,” she says.

Amanda Jedlinsky is the managing editor of SAF Now.