Exporting roses to the Netherlands

The Netherlands is a major trade  hub for flowers and the most important point of entry for cut roses from developing countries. Exports of cut roses from the Netherlands were worth €975 million in 2015. The Dutch flower auction is a fairly accessible marketplace. The auction and the Dutch traders offer a sophisticated trade network to the whole of Europe and beyond. Its position in the heart of the European flower business makes the Netherlands an interesting market for exporters from developing countries.

1. Product description

The rose (Rosa) is a woody perennial plant of the genus Rosa in the Rosaceae family. Standard cut roses vary in size (large and intermediate Hybrid Tea, and smaller Sweetheart roses), in colour (from white to red and combinations), in fragrance and other attributes. Most commercial cut roses carry one bud per stem; Floribunda or spray roses carry more buds per stem but are commonly regarded as garden flowers. Most species are native to Asia, with some native to Europe. After harvest (in bud), roses are stored and transported under cooled conditions until sale at the retail level. Roses are mostly sold as mono bunches or used in bouquets and other flower arrangements. Some exquisite varieties are sold as single flowers.

The HS code for roses is 060311 - Fresh cut roses and buds, of a kind suitable for bouquets or for ornamental purposes.

Roses on display at a flower shop. Source: Shutterstock

The Dutch flower auction (Royal FloraHolland) is the main marketplace for cut flowers in Europe. Flowers from all over the world find their buyers through the auction and the Dutch network of flower traders. Specific requirements for quality, size, packaging and product information are set by the Dutch Flower Auctions Association (VBN) in agreement with growers and traders. These requirements must be met by growers to sell at the auction. The auction serves as an important trade platform for exporters from developing countries. We refer mainly to these requirements that are widely adopted as minimum requirements across the entire cut flower chain.

Quality The VBN requirements consist of two parts: general requirements for all flowers and specific requirements for cut roses. Products which do not meet the requirements for pretreatment, minimum quality, bacteria content and ripeness are not traded and are destroyed if necessary (VBN). Please study the requirements carefully through the links above, as the details given below only represent a brief summary of the full list of requirements.

Cut flowers are traded in three quality groups: A1, A2 and B1. A1 roses must meet all the minimum requirements for internal quality, freshness, freedom from parasites, damage, deficiencies, deviations, contamination, absence of leaves on the lower 10 cm of the stem, stems that are straight and sturdy enough to bear the flower, uniformity of colour, thickness, sturdiness and bouquet volume, and proper packaging. Any deviations from these requirements may result in downgrading from A1 to A2 or B1. Cut flowers that do not meet the minimum criteria for B1 are not traded.

The batch must be free of growth defects including flat buds, grass hearts and crooked necks.

Roses are graded according to:

• Length: all Rosae must be bunched so that the stems in the bunch are even at the bottom;
• Ripeness;
• Number of bloomable buds;
• Height of flower bud: graded in 1-cm classes; the grade can be mentioned in the grade code by using characteristics code S19; the smallest height in the batch determines the code to be indicated;
• Number of stems per bunch.

Growers are responsible for the grading and the reliability of the information that they provide with their lot at the flower auction. The auction monitors customers’ claims for refunds to check supplier reliability. Such claims may 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 eight weeks. Information on your QI is shared with customers and reported back to you. In general, a grower’s good reputation is often rewarded with a higher average price per stem.

Packaging Imported roses are often traded in cardboard boxes. The quantity of roses in these boxes is increasing to reduce costs. Roses are often shipped without plastic sleeves to avoid the build-up of humidity. After arrival, the roses are often repackaged at the auction or by specialised importers. They are usually put into plastic flower containers (buckets) and supplied to the auction in the Netherlands or redistributed to an exporting wholesaler. The Dutch flower auction is nowadays testing the auctioning of the cut roses without unpackaging them from the cardboard boxes, in order to improve the efficiency of the logistics process.

Roses that are supplied to the auction (separate requirements exist for Rosa floribunda) must be:

• Supplied in bunches of 10 or 20 stems;
• Provided with separate foil packaging for each barrel unit (except for Freiland roses);
• Bunched with all flower buds at the same level or in two layers. With two layers, the separate layers may not touch each other;
• Supplied in clean water (containing the prescribed pretreatment agents).

Cut roses in a box. Source: FlowerWatch.

Labelling When exporting to the Netherlands through the Dutch flower auction, every stacking cart must be accompanied by a fully and correctly completed consignment note containing all required information about the stacking cart. Refer to the VBN general product specifications for cut flowers for the list of required information. 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)
• Grading marks (Class A1, A2, B1)
• Supplier name

Additional product labelling will generally take place at the auction/wholesaler or bouquet producer and is often required for direct trade. During trade, attention to quality labelling is important and necessary, including tracking/tracing codes and GLOBALG.A.P., MPS, FFP or other identification when required by the buyer.

Cut roses labelled for a Dutch supermarket. Source: Global Flower Trading.

2. What makes the Netherlands an interesting market for cut roses?

As can be derived from CBI Trade Statistics for cut flowers and foliage, the Netherlands is the largest trade hub for cut roses in Europe. It is both a large trader and a large producer of cut flowers. Dutch production of cut roses has declined, as cheaper producers from developing countries have captured an increasing share of the market. Dutch imports from developing countries increased from €345 million in 2011 to €538 million in 2015. Belgian imports also increased in recent years, as imports (mainly from Ethiopia) were routed via Belgian airports.

Almost all of the imported roses originate from developing countries. The main suppliers to the Netherlands are Kenya, Ethiopia, Ecuador and Uganda. A large share of the imported cut roses is distributed within the European market by Dutch wholesale traders.

The Netherlands is and will continue to be an important exporter of fresh roses. The country exported a total value of €975 million of cut roses in 2015, a 10% increase when compared to 2014. Large increases were seen in exports to Italy, Sweden, Denmark, France, Poland and a number of other countries. A large share of exported cut roses is shipped to the Netherlands from other producing countries to be redistributed within the European market by Dutch wholesale traders. Exports to Russia have fallen due to a drop in demand and a Russian import ban on flowers from the Netherlands, which is ongoing.

Germany is the most important export destination for cut roses. The total value of exports to Germany represents about 33% of the total exports (€324 million). France (€160 million) and the United Kingdom (€82 million) are also very important export destinations.

The consumption of cut flowers in the Netherlands is estimated at around €900-1,000 million, or €52 per capita, in 2014. The consumption of flowers (HBD, 2013) dropped by 9% in 2012, mainly due to the ongoing economic crisis and reduced purchasing power. As a result of the crisis, Dutch consumers tended to buy less expensive flower products, which had a negative impact on the rose market. However, the market has seen a gradual recovery over the past few years. Consumer spending has been increasing again since 2014. Low inflation in the Netherlands means that prices remain fairly stable at present.

Peak days play an important role on the Dutch market for cut roses, as they do on the European market in general. There are a number of days that generally apply to the entire European market such as Mother’s Day and Valentine’s Day. In the Netherlands as well as in many other countries, supermarkets and florists have special promotional campaigns on days such as Mother’s Day and also offer special Valentine’s Day bouquets. This strategy generally increases sales volumes. Consumer demand for specific types of roses tends to rise in the run-up to these peak days and prices tend to be higher than usual.

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

Of all the trends mentioned in the CBI Trends document, the increasing demand for responsibly produced flowers, the increasing attention to freshness and vase life, and the growing market share of supermarket and direct trade are the most important trends on the Dutch market for cut roses.

Increasing demand for socially responsible and sustainably produced roses Many retailers in the Netherlands require suppliers to comply with production standards that involve Good Agricultural Practices or environmental and social standards, including MPS-ABC. Large retailers often demand a variety of certificates. This trend is less marked in the traditional florist and market stalls sales channels. The main elements of environmental responsibility are low energy consumption during transport, pesticide use and water use. These requirements are incorporated in the various certification schemes. The increasing market share of supermarkets in the Netherlands is leading to a rise in the demand for MPS, FFP and Fairtrade flowers.

Top quality  and longer vase life Quality is a prerequisite for supplying to the Dutch flower market. Good quality is important in every market channel, also for low-priced flowers. A vase life of approximately seven days is often regarded as the minimum acceptable value.

Growing market share of supermarkets and direct trade Direct trade between producers and Dutch wholesalers, bypassing the Dutch flower auction, is increasing. Wholesalers set a wide variety of requirements (based on their clients’ requirements) that may differ from the general auction specifications.

Increasing internet sales and IT in the supply chain IT systems are now prevalent in the marketing process. Online business (e-commerce) is taking over the physical buying process at the auction and at wholesale cash and carries. This has had a significant impact on trade. Examples include the Dutch flower auction’s remote buying system and linked web shops for both the auction and the wholesale trade. This leads to the disconnection of the physical supply logistics from the actual trading place. Purchases are based on a digital product image. Growers therefore need to pay constant attention to consistent quality and reliable information, as wholesalers prefer to work with the most reliable suppliers. Unreliable or false information about product quality may lead to a lower ”quality rating” and a loss of sales.

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

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

Plant health Roses exported to the Netherlands must comply with 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. The Netherlands Food and Consumer Safety Authority (NVWA) is responsible for performing phytosanitary import controls in the Netherlands. Roses imported to the EU must be accompanied by an official ”phytosanitary certificate” guaranteeing the phytosanitary conditions of plants and plants products, as well as 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). The CLIENT Export system is used in the Netherlands to register shipments of flowers and plants for inspection.

Intellectual Property Rights (IPR) Developing new rose varieties is often 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. In recent years, there has been an increasing focus on breeders’ rights, and illegal products are rejected from the market.

Full overview of requirements for cut flowers For a list of requirements for roses, consult the EU Export Helpdesk, where you can select your specific product under chapter 06031100.

What additional requirements do buyers often have?

CSR - Corporate Social Responsibility EU consumers are paying more and more attention to social and environmental circumstances during the production of roses. As a result, 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 Good Agricultural Practices, pesticide use and water use) is a very common requirement, while social conditions are gaining importance.

The most important B2B schemes for roses are MPS, GLOBALG.A.P., Fairtrade and ETI. MPS offers several standards, of which MPS-ABC certification covers environmental performances and is considered a must for growers. Furthermore, there are several other schemes such as MPS-SQ (focusing on social issues), MPS-GAP (on Good Agricultural Practices) and MPS-Quality. The most comprehensive standard is MPS-Florimark, which is a combination of the aforementioned four schemes.

GLOBALG.A.P. GLOBALG.A.P. is a B2B scheme originally focusing on Good Agricultural Practices. GLOBALG.A.P. has been the most important scheme for fruit and vegetables for years, but it is gaining importance for roses as well, especially with regard to sales to supermarkets. Several other standards are benchmarked against GLOBALG.A.P.

Private labels The increasing share of supermarkets in comparison with the ”specialised” market (florists) has also had its effects on buyers’ requirements. Several supermarket chains offer roses under their own private labels, often referring to social and environmental conditions at the production level. Albert Heijn, the largest supermarket in the Netherlands, offers MPS-SQ or ETI certified flowers under its own brand. Other supermarkets, such as Lidl, Jumbo and Plus, offer certified Fairtrade flowers under their own private brands. These initiatives focus on improving social conditions in the relevant supply chains. If you aim to supply to a Dutch supermarket chain, you must also be prepared to act in compliance with its principles in such matters.

Cold chain management Proper cold chain management has a positive effect on the quality and vase life of roses. 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.

5. What are the requirements for niche markets?

Fairtrade certification Although CSR requirements are common buyer requirements, standards that are communicated through a consumer label still represent a relatively small part of the market, mostly in north-western Europe. Examples of relevant consumer labels are Fair Flowers Fair Plants (FFP) and Fairtrade International. The market share of Fairtrade roses increased considerably in the past couple of years, particularly in the supermarket segment. Fairtrade International is the main standard in the unspecialised supermarket channel, whereas Fair Flowers Fair Plants tends to be the label of choice for specialised florists.

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

6. What competition do I face on the Dutch cut flowers market?

Cut roses are the main cut flower on the European market. The competition on the Dutch market for cut roses does not differ much from that on most other European markets. More information about competition on the EU cut flower market can be found in the CBI document on Competition for cut flowers and foliage.

7. Through which channels can you get roses on the Dutch market?

The trade channels and market segments for cut flowers in the Netherlands are described in the CBI document on Trade channels and market segments for cut flowers and foliage.

Dutch consumers buy flowers mainly at florist shops (57% in 2013; source: BureauSierteelt.nl), but the market share of supermarkets (20% in 2013) is increasing. In 2015, 49% of flowers and plants were bought at florists. Street market stalls have a market share of about 10%. Online sales of flowers are increasing, but their market share remains relatively low (4% in 2013). About 65% of cut flowers is bought for the purchaser’s own use and 33% as gifts. No specific details on the market share of cut roses are available, but roses are undoubtedly the most popular cut flower in the Netherlands.

8. What are the end-market prices for cut roses?

Roses are sold as mono bunches, in bouquets or as single stems. Consumer prices vary depending on the market segment and country. In the Netherlands, a mono bunch of 15 medium-sized red roses currently sells for about €20 to €30 when bought at a florist shop. A bouquet of 15 large-bud, long-stemmed red roses sells for about €30 to €45. A bunch of 10 small roses in the supermarket sells for much less, between €3 and €10.

Figure 6 below gives an estimation of the price breakdown, showing the added value in the various parts of the supply chain as a percentage of the consumer price. The cost of shipping cut flowers to the Netherlands (transport costs, insurance, tax and documentation costs, airport tax and some additional charges) amounts to about 20-40% of the export value (Free On Board, FOB), depending on the distance. This corresponds to about 15% of the consumer price.

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