Cut Flower production is a specialist, capital-intensive industry that is often high-tech. It is probably the most intensive and high yielding of all the agricultural disciplines. There are several different industries within the production chain, with possible overlap between some of them.
Breeders - Propagators - Growers - Distributors - Wholesalers - Retailers - Consumers
These are companies that develop and breed new hybrids and cultivars. It often takes many years of cross-pollination and back-crossing, followed by selection and evaluation, to develop a new cultivar that is significantly better than those already on the market. New cultivars are then registered and the breeder (who are usually the owner of the breeder's rights) make licensing agreements with propagators and growers, who propagate and multiply the plant. The breeders receive a royalty on each plant grown or flower sold.
These are propagating companies that multiply stock purchased from breeders and sell plant material to growers. Depending on the species and local conditions, the plant material may be in the form of rooted cuttings or seedlings (often in plugs). Tissue culture has also become popular as a means of mass production of single, desirable clones, but is relatively expensive. Sometimes the breeder is also the propagator. There is a large demand for quality plants each year; for example approximately one billion carnation plants are used each year.
These are individuals or companies supplying local and/or export markets. Production set-up, methods and size vary considerably, especially from country to country and are also very much related to the type of cut flowers that are being grown. Flowers and other products may be wild harvested to some extent, but the overwhelming majority is mass cultivated. Production methods range from open fields (the cheapest), to shade cloth houses to highly sophisticated and often automated greenhouses, which are also the most expensive.
These are individuals or companies transporting flowers by road, rail, sea or air, depending on location and destination. For local markets and distribution within Europe and the United States, road transport is used. The cut flower industries in countries such as Israel, Columbia and Kenya are established primarily for export and in these cases transport is via air. There are two important issues in the transport and distribution of cut flowers from the source to thier final destination - doing it in the shortest time possible and keeping the flowers cool along the entire journey. By using cool-rooms and refrigerated containers, the cold chain is maintained.
Flowers are sold through wholesalers or at wholesale markets or auctions, which provide retailers with a large range of volume of flowers. Wholesalers are mostly based at many of the world's large auctions. The Dutch clock system of auctioning is mostly used, during which all transactions are electronically recorded by registered buyers. The 'clock' is set at a high price and slowly moves to a lower and lower price. Individual bidders (retailers and florists) can stop the clock electronically at the price point of their choice (for that particular batch of flowers) and the bid is automatically registered against their name or number. If you stop the clock too quickly, you may pay too much but if you wait too long, the opportunity may be lost and others will buy the flowers.
In all developed markets, florists are still the main retail outlet for flowers to consumer. The advantage is that individual care and attention can be given to the proper treatment and storage of the flowers to ensure that they reach the consumer in the best possible state of freshness. However there is an international trend towards supermarket or chain store outlets.
Finally, it is the consumer (whether the home owner or organiser of a large event) that drives the flower industry. Giving and receiving flowers have become part of everyday life. Like most industries, it is very much about supply and demand. Fashion and colour play a very important role in the demand for certain cut flowers.