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FLORAL SALES SLOW, BUT CATEGORY STILL VIBRANT

SALT LAKE CITY -- Growth in the supermarket floral industry has leveled off since the boom of the 1990s, while buyers are sourcing more flowers from growers in South America, according to a study released at this year's Super Floral Show.The study was the third by Prince & Prince, Columbus, Ohio, and showed a 5% rate of growth since 2000, when the last study was completed. Floral sales took a 25%

SALT LAKE CITY -- Growth in the supermarket floral industry has leveled off since the boom of the 1990s, while buyers are sourcing more flowers from growers in South America, according to a study released at this year's Super Floral Show.

The study was the third by Prince & Prince, Columbus, Ohio, and showed a 5% rate of growth since 2000, when the last study was completed. Floral sales took a 25% leap between 2000 and the first study, which was completed in 1995.

"It reflects the economy," said researcher Tim Prince of the smaller increase.

The 2003 study by brothers Tim and Tom Prince was funded by the Super Floral Show and statistics were admittedly incomplete. The pair presented information from 85 responses and said a more complete study, which may contain as many as 3,000 more responses, will be available later this summer. The statistics compiled for the show, however, still represented 19,000 stores in the United States and Canada with a combined $2.5 billion in annual sales.

The industry snapshot showed average annual floral sales per store were $187,592 for the 2003 study with the average gross margin on floral sales at 42%. Full-service operations came in at 49% and self-service operations at 40%.

Fresh-cut flowers, bouquets and pre-made arrangements comprised more than 60% of floral sales at supermarkets -- with bouquets grabbing one-third of that, the Prince brothers said. The top three outpaced sales of potted plants, bedding plants and gift baskets. Of these, potted flowering, foliage and bedding perennials made up 30% of the floral sales mix, while non-perishables and gift and food baskets collectively made up about 8% of department sales.

When buyers were asked if management views floral as an "increasingly important part of the operation," 46% agreed, yet the study showed only 1.5% of supermarket customers were actually walking out of the store with flowers.

"The importance of a floral department has leveled off," Tom Prince said.

Perhaps the most startling figure in the study dealt with the source of floral products. There has been a dramatic shift to South American farm-direct sources for flowers, Prince & Prince researchers found. Buyers said they intend to buy even more bouquets and cut flowers from these growers in the future, a trend that is driven by the largest operations, the study said.

Indeed, growers from as far away as Bogota, Colombia, made the trip to Salt Lake City for the Super Floral Show.

Once those flowers make it back to the store, they are more likely to be sold in a limited service or mixed-mode operation, according to the study. Full-service floral operations seem to have peaked in profitability in the 2000 study, they said.

For the first time, perhaps because of the study's sponsor, the survey touched on floral care and handling, quizzing respondents on the use of preservatives, refrigerated coolers, bucket sanitation and anti-ethylene products that make flowers last longer. Most supermarkets, 94%, gave preservative packets to customers; 92% used sanitized buckets and 67% surveyed used leaf cleaning and shining methods. The study showed independent store chains were more likely to use preservative packets than larger chains. Those numbers struck a nerve with consultant Terry Johnson, who studies methods of keeping flowers fresher, longer. Consumers want a fresh product with a long vase life, Johnson said. And if supermarkets, growers and buyers would join forces to lengthen the life of flowers, consumers would buy more flowers, he said.

"We can do much better," Johnson said. "Customers want a product that is fresh when they buy it and is going to stay fresh when they take it home and put it in a vase."

The Prince brothers said the research indicates the mass-market floral industry remains dynamic, though slowed since the last study. Still, some show participants said American consumers simply don't buy flowers at the rate of their counterparts in other parts of the world.

"The American public doesn't consume flowers on a regular enough basis," said David Priest of USA Bouquets. "In other countries, you buy eggs, meat, bread and flowers every day. It's just what you do."

But Bonnie Downey, vice president of Florida-based Superior Florals, insists there will always be a place for flowers in the American shopping basket.

"Flowers make you feel good," Downey said. "There have been studies done that prove it."