USA florists signing up for the electronic newsletter were entered into the lottery and Diana Westcott from Potomac Floral Wholesale (the author of this article), won the contest. Nicolette Bouwman of the Flower Council met Diana and her husband John for a day-long tour of the world-famous auction at Aalsmeer, a hydrangea grower, Ko Kolk Hortensia BV and several local Amsterdam retail flower shops. The following is a summary of what they learned at the auction tour.
History – The Foundation
The soil in the area around Aalsmeer was so rich that growers needed to seek new outlets for their abundant crops. With a surplus of supply, growers met in a local café called “Welkom” and later in a rose greenhouse, to negotiate with buyers for the sale of their products. In 1912, the first auction house was built by a cooperative of growers who elected a board of directors from their own membership. The prosperous years of the early 1920s gave “Bloemenlust” remarkable growth with volume exceeding one million guilders (or more than $450,000 euro.) By 1960 Bloemenlust turned an annual volume of more than $11 million euro and in the last year before its merger with neighboring auction house Central Aalsmeersche Veiling (or CAV for short) volume had grown to $48.5 million euro with roses accounting for almost $35 million euro. In 1972, the merged auctions, under the direction of 11 member-growers, opened their new 88,000 square meter auction complex known as “Bloemenveiling Aaslmeer.” Today, the building has grown to the size of 250 football fields under one roof with a combined cut flower and plant volume of almost $1.7 billion euro.
Sellers – the Growers
About 6,000 individual growers market their flowers and plants through the auction in Aalsmeer. Beginning this year, growers from countries outside the European Union were allowed to join the cooperative. This new group is comprised mostly of Dutch growers who have emigrated to Kenya and Uganda and growers from Israel. Each member is required to extend a loan to the cooperative equal to 1% of the member’s sales. Interest is paid to the member by the cooperative and the principal is paid back to the member after nine years. Members may also make voluntary loans to the cooperative with special interest rate incentives.
Dutch growers are world famous for their expertise in floriculture. It is here that the most advanced cultural techniques and new products are developed. More than 13,000 varieties are offered for sale at Aalsmeer. A special department known as the “Test Centre” tests flower quality. Actually simulating end-user conditions, they hold flowers at around 70 degrees Fahrenheit. New varieties that show promise are tested in the “Fleur Primeur” program. This program is designed to establish quality standards and expand the range of products that will satisfy consumer demand for new, exotic flowers and plants. Every year, in the fall, breeders exhibit at the International Hortifair in Amsterdam, showcasing the very best of the new varieties. A trip to the Hortifair is like Alice’s adventure in Wonderland. Flowers are larger, with perfect form and more intense color than you have ever seen before. The range of products is amazing and the exotic presentations are a floral fantasy come true.
Buyers - The Clock
Here is the purest form of supply and demand economics. More than 2,000 buyers representing almost 1,000 member firms pay $6,000 euro annually for the privilege of buying flowers via the clock system. In one of five tiered auction rooms that could remind you of a college lecture hall, buyers sit at a terminal and focus on the huge clocks on the wall and the parade of product that moves on trolleys across the front of the room. The first buyer to press the button sets the price and buys the batch. There are a total of thirteen clocks handling an average of 60,000 transactions daily. The difference between the auction rooms and trading on Wall Street is that in the auction rooms there is no noise! This electronic trading is very civilized.
Distribution – Logistics at Warp Speed
Immediately after the auction, flowers are sent on their path to their destination. The distribution hall is a bevy of bustling activity as trolleys of flowers run along tracks and workers speed along on carts and segue-type vehicles. An advanced tracking system using barcodes allows the purchases to be traced anywhere in the distribution system. At the heart of the logistics organization is a sticker bearing the barcode that identifies the batch, buyer, date, etc. Our guide proudly called the tracking and tracing “a PERFECT system.” I was reminded of the tags placed on our luggage at the airport and the miracle of our bags actually meeting us at our final destination. Most of these flowers stay within a 1,500 kilometer radius and go to Germany, England, Italy, Spain, Russia and Eastern Europe. Only a small percentage goes to the United States. In a matter of a few short hours the distribution hall is empty and the flowers have left the building.
Future cast
To quote Bernard Oosterom, Chairman of Bloemenveiling Aalsmeer, “Share prices are set on Wall Street, films are made in Hollywood and flowers come from Aalsmeer…the most important place in the world where supply and demand meet each other; the marketplace with the finest logistic facilities.” A recent reorganization of the cooperative was code named “Turbo.” This name is indicative of the auction’s self image: an internally powered super charged engine. Growers now give advance notice to the auction using the electronic delivery form so the auction already knows what is coming before the product arrives. No longer is it necessary for a buyer to be present at the clock. Remote buying is happening now. E-business means progress; the changes to the industry brought about by the electronic age will not be fought in Aalsmeer. They will be embraced.
