CBI - Ministry of Foreign Affairs

Hortensia in the European market

Market Analysis by ProFound

Table of contents

Product description Market demand and production Market trends Trade channels Market segments Market prices Competition

Product description

Hortensia (latin name: Hydrangea) Types in Europe: Fresh: dominates market Classic (overripe flowers): most sales in October-December Many more colour shades available than in Colombia: white, blue, purple, pink, red and green (immature)

Fresh Classic

Demand for hortensia in Europe

Healthy growth in past decade Hortensia is ‘mainstream’ product Growth is stagnating Hortensia sales at Dutch auctions in 2014:

39 million stems / € 41 million (10th largest product) Growth of 13.4% in 2014 Demand concentrated in markets with many affluent consumers

Focus countries Annual per capita spending on cut flowers

Switzerland €74 to €129 Netherlands €54 France €47 UK €45

Production of hortensia in Europe

Growth in European production of hortensia, especially in the Netherlands Growth is stagnating No European production fresh hortensia in winter (November- March)

Country Production (ha) For Europe (%) Netherlands 150-170 90 Other European countries (incl. Germany and France) 50 100

Colombia 640 - 1,400 1-5 Other South American countries (Ecuador/Peru) 100-200 1-5

Kenya 15-25 100

Estimated global production

Colombian hortensia supplies to Europe

Compared to European production: Year-round availability Narrow range varieties Less control on growing conditions Winter offers window of opportunity Colombia’s total hortensia exports: € 3.0 million / 792 tonnes (August-September 2015) United Kingdom imports 75% of Colombia’s non-traditional flower exports

Trends on European market

Consumer familiarity with hortensia is growing More colours Traditional colours: white, blue and green Growing interest in new shades

Industry response to trends

European hortensia industry is focused on cost reduction, more colours and stronger hortensia Sustainability is a trend of secondary importance for consumers Tip: Colombia has opportunities to develop breeding for stronger hortensia and more colours Tip: Increase control on growing conditions and improve hortensia quality

Market segments in Europe

Own use Special occassions Bulk Exclusive Primary segmentation Secondary segmentation

Source: ProFound

Own use Special occassions Bulk Exclusive Primary segmentation Secondary segmentation

Source: ProFound

Own use Special occassions Bulk Exclusive Primary segmentation Secondary segmentation

Source: ProFound

Own use Special occassions Bulk Exclusive Primary segmentation Secondary segmentation

Source: ProFound

Trade channels in Europe

Direct trade

Indirect trade

Trade channel trends

Role of Dutch auctions remains big Turnover € 4.5 billion in 2015 Unspecialised retailers are only gaining little market share in hortensia market Growing direct trade with unspecialised channels, bypassing Dutch auctions, but limited for hortensia Florists are not yet increasing sustainability requirements Supermarkets are driving sustainability Expanding virtualisation of trade in flowers

Prices for hortensia

Price and colour are main purchasing criteria Wholesale prices range from €0.70 to €2.00 per stem: high compared to other cut flowers Depend on grade and time of year: Transportation costs make up high share final price Tip: Consolidate orders to obtain better freight rates

Average auction price

Summer Winter

€ 1.00 per stem € 1.40 per stem

Competition on European market

European production sets high quality standards Low prices during summer Threat of product substitution: Small presents Other flowers, especially exclusive large flowers Concentration of European buyers: Limits your power to negotiate prices Puts greater pressure to comply with strict quality requirements and delivery terms Tip: Learn from your competitors by hiring independent experts from Europe