Exporting carnations to the Netherlands

About €62 million of carnations were imported in the Netherlands in 2015, while exports valued €87 million. Most imported carnations are re-exported to United Kingdom, Germany, Poland and France. Carnations are sold in mono bunches and bouquets. As there are many varieties and carnations have a long vase life, they are a valued part of the cut flower assortment in supermarkets and florists. Although carnations have been losing market share, trade in carnations is stable and there are opportunities for exports to a number of European countries. The Netherlands is an important trade hub for carnations in Europe.

1. Product description

Carnations are commonly referred to by their scientific name "Dianthus”. They are perennial herbaceous plants, native to Eurasia or the Mediterranean region. Carnations have been extensively cultivated for the last 2,000 years. They grow up to 80 cm tall. The flowers of 3–5 cm in diameter are produced singly or up to five together in a cyme (spray carnation). The original natural flower colour is bright pinkish-purple. Due to extensive breeding, other colours including red, white, yellow and green, are available. Carnations have a light perfume. The corresponding CN code is 06031200 fresh cut carnations and buds.

Key product specifications

In Europe, carnations are a popular flower in supermarket bouquets in countries such as the United Kingdom, and are a traditional gift and/or celebration flower in a number of countries. Most carnations go through the direct trade channel, bypassing the Dutch flower auction. The flower auction had a turnover of €17 million imported carnations in 2015. We estimate that the Netherlands imported €46 million of carnations directly without auctioning. The direct trade channel is thus the dominant trade channel for carnations, but still carnations are among the top imported flowers at the Dutch flower auction.

Key product specifications may differ between the direct trade channel and the auction. The Dutch flower auction (Royal FloraHolland) is the main marketplace for buying and selling cut flowers in Europe, and its general product specifications for carnations and other cut flowers are widely recognised in the trade. As these product specifications are well documented we will use them as references here.

There are specific requirements regarding quality, size, packing and information on the product set by the Dutch Flower Auctions Association (VBN) in agreement with growers and traders. These requirements must be met by growers in order to sell flowers at the auction. We refer mainly to these requirements that are widely adopted as minimum requirements across the entire cut flower industry including flowers in the direct trade channel. Individual customer requirements may differ from those listed below.

Quality and grading: Cut carnations may be traded at the auction if they meet VBN requirements. These requirements consist of two parts: general requirements for all flowers supplied and specific requirements for cut carnations. Products that do not meet the requirements regarding pre-treatment, minimum quality, bacteria content and ripeness are not traded and are destroyed if necessary (VBN). You are advised to study the requirements carefully through the links included above, as the details given below only represent a brief summary of the full requirements.

• Carnations are traded in 3 quality groups: A1, A2 and B1, depending on the extent to which they meet the quality and grading criteria.

• The following specific requirements apply to all carnations:
  • The batch must be free of shrunken flowers and/or ‘shrinkers’;
  • The batch must be free of woody stems;
  • The batch must be free of crooked necks.
• The following additional requirements apply to spray carnations:
  • The stems must have a minimum of 3 ‘bloomable’ (mature) flower buds. 2 buds can show a slight deviation; 1 bud can show a serious deviation;
  • The batch must be free of visible remnants of the main flower;
  • The batch must be free of torn flowers;
  • The batch must be free of excess shoots.
• The following additional requirements apply to standard carnations:
  • The batch must be free of buds;
  • The batch must be free of stuck flowers;
  • The batch must be free of torn flowers.
• Carnations are graded per batch according to:
  • length;
  • ripeness;
  • number of bloomable buds.

Growers are responsible for grading their products through self-assessment and for the reliability of the information they provide with each lot at the Dutch flower auction. However, the auction monitors customers’ claims for refunds to check supplier reliability. Such claims may for example arise from the provision of incorrect product information on the consignment note or labels. The Quality Index (QI) is based on the number of customer refund claims or other complaints over the past 8 weeks. Information on your QI, including the number and content of product refund claims, is shared with customers and reported back to you. A grower’s good reputation, based on constant quality, is often rewarded by a higher average price per stem.

Packaging: Export and import trade often involves cardboard boxes. Flowers are repacked into plastic flower containers (buckets) at the auction in the Netherlands or at the importing wholesaler. VBN gives detailed information about auction requirements for packing and loading.

Spray carnations (non-disbudded with several flowers and/or buds) at the auction must be:

• supplied in bunches of 10 stems;
• packed per bunch in a hot needle-perforated sleeve.

Standard carnations (disbudded with large single flower) must be:

• supplied in bunches of 20 stems;
• bunched in two layers, whereby 12 flowers form the upper and 8 flowers the lower layer
• packed per bunch in a hot needle-perforated sleeve.

Other carnations must be:

• supplied in bunches of 10 stems;
• supplied in bundles of 5 bunches.

Final sales consists mainly of mono-bunches and mixed bouquets in either plastic containers or special containers, e.g. from bouquet producers, at specialist florist shops and supermarkets. Bouquets and flowers are sometimes pre-packed in plastic or paper sleeves, sometimes assembled and wrapped at the florist shop.

Loading must be optimised, whereby the volume of the bunches determines the number of supplied bouquets per container unit:

• There must be at least 5 cm of free space between the product and the tray above it in the stacking cart
• Spray carnations must be packed in the specific quantities per container, depending on the weight of the bunch. Detailed information can be found in the Dianthus product specifications of VBN.
• Carnations with a stem length shorter than 45cm must be supplied in a small container (container code 566).

 Labelling: When exporting through the Dutch auction, the flowers are often loaded on a stacking cart. Every stacking cart must be accompanied by a fully and correctly completed consignment note containing information about the stacking cart. In addition, every packaging unit needs to be labelled with product and supplier information, namely:

• Supplier number;
• Variety name;
• Amount (e.g. stems) per packaging unit (e.g. bucket, etc);
• The grading marks (Class A1, A2, B1);
• Supplier name.

Extra product labelling may be added at the auction or by the wholesaler or bouquet producer. Flowers also need to be accompanied by quality or other labelling such as tracking codes and certifications like GLOBALG.A.P., MPS, Fair Flowers Fair Plants during their passage through the trade channel.

Dutch wholesalers are increasingly selling flowers from developing countries directly to retailers in other countries such as the United Kingdom. In general the main product requirements listed above also apply to the direct market.

2. What makes the Dutch market an interesting market for cut carnations?

Specific figures about consumption of carnations in the Netherlands are not available. The European market for cut flowers is estimated at around €20 to €25 billion in 2014 (calculation by Wageningen Economic Research, based on data from Rabobank, 2015, and Eurostat population statistics). The Netherlands, with some 17 million inhabitants (only about 3% of the EU total), is just a small end-market for cut flowers. However, it is the main trading hub for cut flowers throughout the EU and has a relatively high consumption per capita. Dutch consumers spend over €50 per inhabitant per year on cut flowers. It is expected that the Dutch market for cut flowers will grow moderately in the next 5 years.

Carnations are mostly sold as mono bunches or in bouquets. They are also sold as single flowers, e.g. to wear in a buttonhole or as a corsage. Carnations are available in many colours. The most popular colours are red, pink, and white, as well as bi-colour and flecked flowers. Other colours include yellow, purple, salmon, fuchsia and light green. A few years ago, the EU approved two genetically modified blue carnations, a colour which cannot be attained by natural selection.

In the Netherlands, carnations are among the top-10 most well-known cut flowers to consumers. They are recognized from a picture by about 40% of the consumers. Other commonly recognised flowers include tulips, roses, and sunflowers (Source: Royal FloraHolland). Some Dutch consumers consider carnations a bit of an old-fashioned flower. Carnations (particularly in the form of small bud sprays) are also sometimes associated with cheap bouquets at supermarkets. The image of carnations is, however, improving thanks to the combined efforts of breeders, growers and promotion campaigns by organisations like the Flower Council of Holland. Breeders have also introduced many new varieties in more fashionable colours.

Dutch consumers buy flowers mainly at florist shops (57% in 2013). The market share of supermarkets is increasing. There are no specific numbers about market shares of sales channels for carnations. However, smaller stems of spray carnations are mainly sold at supermarkets and street market stalls and kiosks, whereas larger bud carnations are typically sold in bouquets at florists. As the market share of supermarkets grows, and the image of carnations in general improves, demand for both spray carnations and disbudded carnations is expected to rise in the next 5 years. Internet sales are estimated at just 2% in 2013 but is growing fast.

The production of carnations in the Netherlands has decreased significantly in the past decades and is now less than 20 hectares. Just a few producers remain. In the whole of Europe, a total of 981 hectares of carnations was reported in 2015–2016 (Source: Royal FloraHolland), of which the majority was located in Spain (341 hectares), Turkey (200 hectares) and Italy (180 hectares). The European production of carnations is expected to decrease due to competition from South American and African producers.

The imports of fresh cut carnations in the Netherlands have increased between 2011 and 2015. In 2015 imports totalled €62 million. Some 90% of the imported carnations originate from developing countries. The Netherlands and the United Kingdom are the largest importers of carnations in the EU-28. But the Netherlands is the largest importer of carnations from developing countries and re-exports a large share (about 45% in 2015) of those carnations to the United Kingdom. Colombia is by far the largest exporter to the Netherlands, with about 62% market share in the Netherlands (all imports including intra-EU trade) in 2015.The total import value from Colombia is currently about €39 million. These imported products are often directly re-exported by Dutch wholesale traders to other European countries such as the United Kingdom and, in some cases, the products never physically ‘land’ in the Netherlands. Other important exporters of carnations to the Netherlands are Kenya, Spain, Turkey and Ethiopia.

About €17 million worth of carnations were imported and traded at the Dutch flower auction in 2015. We estimate that about €46 million (or about 230 million stems at €0.20 per stem) were imported through the direct channel in 2015.

The total reported value of carnations exported from the Netherlands was €87 million in 2015. The majority of the exported carnations are shipped to the Netherlands from other producing countries like Colombia and are distributed further in the European market by Dutch wholesale traders. Germany and the United Kingdom were the most important export destination for carnations in 2015, with €20 million and €14 million worth of exports respectively. In 2015 exports of carnations from the Netherlands to the United Kingdom decreased as more carnations were exported directly from Colombia to the United Kingdom. Poland, France and the Scandinavian countries were also significant export destinations.

3. What trends offer opportunities on the Dutch market for cut carnations?

You can find more information on general trends and developments on the European market for cut flowers in CBI Trends.

Increasing demand for socially responsible and sustainably produced cut flowers

There is an increasing demand for socially responsible and sustainably produced flowers in the Netherlands. It is mainly traditional markets like the United Kingdom, Germany and Scandinavia that require suppliers to the main supermarket chains to comply with social standards like Fairtrade, ETI or MPS-SQ. As these markets are important destinations for flowers traded via the Netherlands, these social responsibility requirements are also becoming more important for suppliers to the Dutch flower auction or wholesale trade.

Wholesale traders in the Netherlands have to comply with environmental requirements set by their clients. In many European countries environmental factors are becoming an important issue. Countries such as the United Kingdom and Germany put particular emphasis on this. The Dutch are important suppliers for these markets, so wholesale traders pay attention to this as well.

In order to reduce costs and to limit CO2 emissions, shipments by sea container are developed as an alternative transport modality. Carnations are already being shipped by container from Colombia and Kenya and the number of sea shipments is increasing.

Longer vase life

Good quality is important in every market channel. Carnations are cut flowers that are particularly valued for their long vase life, which can last up to 14 days. A vase life of 7 days is often regarded as a minimum. As flowers supplied to the Netherlands are mostly re-exported to other countries, a long vase life and good quality need to be maintained by close attention to cold chain and post-harvest treatment, in order to maintain the quality demanded by the end-customer.

Growing market share of supermarkets and direct trade

Direct trade between producers and European wholesalers, bypassing the Dutch flower auction, is increasing. Wholesalers have their own requirements (based on the requirements set by their clients) that may differ from the general auction requirements.

Increasing competition in a slowly growing market

Despite limited consumption growth on the European market, various Latin American (mostly Colombian) flower exporters are looking for an alternative market as demand in Russia is declining due to the economic downturn in that country. Imports from Africa are also increasing. There is increasing rivalry on the European market. As consumption is not expected to grow very fast in the next five to ten years, this is expected to put downward pressure on prices of carnations. On the other hand, there is less competition from European carnation growers; carnation production in Europe has declined fast as production has shifted mainly to Colombia.

Increasing online sales and use of IT in the supply chain

There is an increasing need for information sharing between growers and traders for tracking and tracing purposes. IT is also becoming more important in the sales process. Wholesalers now have online shops where their clients can obtain real-time information about current stocks.

4. What requirements should cut carnations comply with to be allowed on the Dutch market?

What legal and non-legal requirements must my product comply with?

Plant health

Cut carnations exported to the EU, must comply with the EU legislation on plant health. The EU has laid down phytosanitary requirements to prevent the introduction and spread of organisms harmful to plants and plant products in the EU.

Carnations imported in the EU must be accompanied by an official ‘phytosanitary certificate’ guaranteeing the phytosanitary conditions of plants and plant products, and also that the shipment has been officially inspected, complies with statutory requirements for entry into the EU and is free of quarantine pests and other harmful pathogens. Phytosanitary certificates are issued by your National Plant Protection Office (NPPO).

Intellectual Property Rights (IPR)

Developing new carnation varieties is very expensive. The developers of new varieties want their return on their investments. To prevent just anybody from using these new varieties, they are protected by intellectual property rights called royalties. In recent years, there has been an increased focus on breeders’ rights and illegal products are rejected from the market.

Full overview of requirements for cut carnations:

For a list of requirements for cut carnations consult the EU Export Helpdesk where you can select your specific product under chapter 06031200.

What additional requirements do buyers often have?

CSR - Corporate Social Responsibility and GAP

Dutch consumers are paying more and more attention to social and environmental circumstances during the flowers’ production. As a result Dutch buyers require you to meet certain environmental and social standards in the form of certification of B2B schemes and consumer labels. Compliance with environmental standards (focusing on pesticide and water use) is a very common requirement, while social conditions are gaining importance.

The most important B2B scheme for carnations is MPS. MPS ABC certification covers environmental performances and is considered a must for growers. Furthermore they have several other schemes such as MPS-SQ (focusing on social issues), MPS-GAP (on Good Agricultural Practices) and MPS-Quality. The most comprehensive scheme is MPS-Florimark, which is a combination of the aforementioned four schemes.

GLOBALG.A.P. is a B2B scheme originally focussing on Good Agricultural Practices. Although not yet extensively used in the cut flower trade, it is gaining in importance, especially when selling to supermarkets, which is a dominant trade channel for cut carnations.

Private labels

The increasing share of the ‘unspecialised’ market (supermarkets etc.) in comparison with the ’specialised’ market has also had its effects on buyers’ requirements. Several supermarket chains offer carnations under their own private labels often referring to social and environmental conditions at the production level.

Furthermore, Dutch importers may also participate in initiatives such as the Ethical Trading Initiative (ETI) which is important in the United Kingdom, or the Business Social Compliance Initiative (in several Western European countries). These initiatives focus on improving social conditions in their members’ supply chains. This implies that you, as a supplier, are also required to act in compliance with their principles. Demand for ETI or BSCI compliant flowers in the Netherlands itself is fairly limited.

Cold chain management

Proper cold chain management has a positive effect on the quality and vase life of carnations. Therefore EU buyers’ demands for cold chain protocols are growing. Note that, although improving your cold chain management may be a challenge, the higher product quality should also improve your profits.

What are the requirements for niche markets?

Fairtrade

Although CSR requirements are common buyer requirements, standards that are communicated through a consumer label still represent a relatively small part of the market. However, the sales of Fairtrade cut flowers is increasing, also in the Netherlands. Examples of relevant consumer labels are: Fair Flowers Fair Plants (FFP) and Fairtrade International.

Organic

The market for organic carnations is very small. Organic carnations must by produced and processed by natural methods defined in EU legislation. Some flower traders perceive organic carnations as a lesser quality product due to a lower aesthetic quality and durability. As such, organic carnations are not yet particularly favoured in Europe.

5. What competition do I face on the Dutch market for cut carnations?

Colombia is the main supplier of carnations from developing countries. It reported 1106 hectares of carnations in 2015-2016 (Source: Royal FloraHolland). Colombia is known for its high-quality standard and spray carnations. It produces year-round with a peak in October, and a large variety of colours and diversity in appearance. Other important suppliers in the European market are Kenya, Turkey and Spain. Turkey and Kenya are the most important suppliers after Colombia in terms of volume.

Kenya had 200 hectares dedicated to the production of carnations in 2015-2016. It focuses mainly on large flower standard carnations, grown at higher altitudes and competes with Colombia in terms of quality. Its production is year-round although volumes are higher in winter than in summer.

Total European production of carnations (including Turkey and Russia) was valued at €187 million in 2015 (Source: Royal FloraHolland). Spain is the biggest producer of carnations in the EU with reports of 340 hectares of carnations in 2015-2016. However, Spanish carnations growers, like the Dutch, are suffering a major decline in numbers and area of production. The Spanish production season peaks between April and July. Turkey is also an important producer of carnations. It is improving its quality and focuses on supplying retailers in Germany and the United Kingdom directly, as well as the Dutch auction. Turkey offers a variety of popular standard and spray carnations. Carnations are a major horticultural product in Turkey. Turkey supplies the European market mainly in September and from December to May. Competition from Ethiopia and Morocco is also increasing. The European market for carnations (both standard and spray carnations) is very competitive.

Supply from the Netherlands has decreased, as the number of growers and the production area have declined greatly. Just 12 specialised carnation growers remain. They mainly produce high-quality standard carnations and focus on large assortments of special varieties. Dutch carnations are produced year-round with a peak in April and May.

More information about competition on the EU cut flower market can be found in general information on Competition for cut flowers and foliage.

6. What do the trade channels and market segments of interest for cut carnations in the Netherlands look like?

Carnations are mainly traded directly, though the Dutch flower auction remains an important channel for market access. The characteristics of the relevant market channels and segments are described in the general information on Trade channels and market segments for cut flowers and foliage.

7. What are the end-market prices for cut carnations?

Carnations are mostly sold as mono bunches and in bouquets. In the Netherlands, a bouquet of 15 medium single bud carnations with some foliage sells for about €20 to €30 at the florist shop, but the bouquet will usually contain other flowers as well. A bunch of 10 small budded carnations in the supermarket sells for much less, between €2 and €5. The figure below gives an estimation of the price breakdown. This breakdown indicates value-added and gross margins in the different parts of the supply chain.

Figure 7: Price breakdown

8. Useful sources

Export and market entry support:

• CBI - http://www.cbi.eu/
• CBI Market Information - https://www.cbi.eu/market-information/
• EFSA - http://www.efsa.europa.eu/en/
• EU Export Helpdesk - http://exporthelp.europa.eu/thdapp/index_en.htmlhttp://exporthelp.europa.eu/thdapp/index_en.html
• ITC Market Access Map - http://www.macmap.org/

Certification schemes:

• Ethical Trading Initiative - http://www.ethicaltrade.org/
• Ethiopian Horticulture Producer Exporters Association - http://www.ehpea.org/
• Fair Flowers Fair Plants - http://www.fairflowersfairplants.com/home-en.aspx
• Fairtrade - http://www.fairtrade.net/
• Florverde ® Sustainable Flowers - http://florverde.org/
• GLOBALG.A.P. - http://www.globalgap.org/uk_en/
• ISEAL Alliance - http://www.isealalliance.org/
• ITC Standards Map - http://www.standardsmap.org/
• Kenya Flower Council - http://kenyaflowercouncil.org/
• MPS - http://www.my-mps.com/en/
• Rainforest Alliance - http://www.rainforest-alliance.org/

Marketing and trade standards:

• EU legislation on organic production - https://ec.europa.eu/agriculture/organic/eu-policy/eu-legislation/brief-overview_en
• UNECE standards for cut flowers - http://www.unece.org/trade/agr/standard/flowers/flower_e.html
• VBN Dutch Flower Auctions Association - http://www.vbn.nl/en-US/Pages/default.aspx
• VBN product specifications - http://www.vbn.nl/en-US/Productinfo/Pages/Productinformations.aspx

Statistics and sector information:

• AIPH - http://www.aiph.org/
• Eurostat -http://ec.europa.eu/eurostat/data/database
• ITC Trade Map - http://www.trademap.org/
• UN Comtrade - http://comtrade.un.org/

Disclaimer CBI market information tools: http://www.cbi.eu/disclaimer

 

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