NEW
INDIA ROSES
A VIBRANT BRAND WHICH WILL EVOLVE INDIA
FROM MASS FLORICULTURE TO CLASS FLORICULTURE
Today a glance at most Indian streets would show gleaming cars and shining showrooms, malls neatly stacked with premium products. Not all of them are high priced, but the presentation of the same has become more sophisticated and comparable with the best worldwide. You would also find the middle class comfortably shopping in these five star looking malls which are offering whopping discounts and competing with the traditional grocery stores. One would wonder for a moment whether you are in US or Europe. This new face of the Indian Economy is in stark contrast to the two car brand Indian Economy, just over a decade back.
As compared to this revolution in the Indian Automobile and Consumer sector, our Indian floriculture economy has not kept a matching pace. One of the reasons is the unique variety profile which comprises an overwhelming 75% old and some outdated varieties. These more commonly referred to affectionately as traditional varieties are finding difficulty in acquiring a suitable international market. How can then we in a luxury product business like floriculture be marketable when we have old and outdated products ? The answer to this big question best lies in the question itself ! And this question today is the biggest question facing the Indian Floriculture Industry ?
How do we make our flowers more marketable ? or How do we improve our marketing potential in the International markets? This today is the Great Challenge facing Indian Floriculture! Rather than be the judge and issue judgments as to what is Right or and what is Wrong, the solutions would be to conduct a deeper and detailed analysis in order to derive meaningful conclusions. This would then help in laying down a practical action plan for Indian floriculture marketing
Following is a detailed analysis of these many popular myths and popular mantras affecting the marketing of Indian floriculture
(A) Current Positioning of Indian Floriculture
Global floriculture production areas have been broadly classified into 4 levels based on their standard of flower produce. It basically conveys the level of a country’s maturity in international floriculture industry.
Level 1- Mass Producers
This comprises mostly entry level players who produce rose varieties which are commonly grown. Most of these countries have old varieties whose marketability is on the decline. Plantations are done based on availability of local planting material rather than what is demanded in the international market. Post harvest in these producing nations is also not of critical importance. Quantity is given more consideration than quality. These producers do well in markets which are not highly quality conscious. It is important for these exporting nations to graduate to the next level as early as possible.
Level 2 – Mostly Mass and a Few Class Producers
Nations which realize the importance of new and marketable varieties and better post harvest practice come under this level as a strategy for increasing sales realizations. These nations are basically mass producing nations but luckily have a few pioneers who have introduced world class varieties. But due various constraints and most important myths are not able to breakthrough and leap into the higher level immediately. These are nations like India which are in an overdue process of evolution.
Level 3 –Some Mass and Some Class Producers
This is the ideal level that India should aim for. India is a huge country of a billion people. Therefore we will always require mass and class producers to cater to its diverse requirements. In the current market scenario, it is very important for a country like India to break into this league of exporting nations as early as possible
Level 4 - Class producers and Hardly Any Mass Producers
This would be the ideal situation. But at the current state of our economy it would take us many decades for us to come into this stage. This level signifies a very mature economy
Today India is rapidly moving into level 2. There is a critical urgently for it to leap to level 3. The progression to the next level is an evolution and not a revolution as it also depends on the state of economy. With our national growth rate at 7%, which is high by international standards, the best time is now.
(B) Flowers - Dual Brand: Primary Brand and Secondary Brand
Each flower is identified with two brands. The first one is of the country it comes from , which is the called the primary brand. The second one is of the company it comes from, which is called the secondary brand.
The primary brand i.e. the national brand attains value only when it reaches level 3. At this level the farm or company brand can get further value and aspire to become a high end brand. However with the Indian Brand of Roses currently positioned at level 1, the companies from India cannot position themselves to be high end brands. Hence the most important target for all farms in India is band together and push our primary brand to level 3. At this stage they would be in a position to do brand building for their farms/companies.
The lower price fetched by Indian Roses in the Japanese markets as compared to the African Roses justify the fact of the national brand and primary brand theory. African Roses sometimes get as much as twice the rates of Indian produce. But a look at the quality of some of the best Indian farms vis a vis the African Roses doesn’t justify the huge price disparity. This difference in prices is due to the different positioning of Indian and African which has a tremendous effect of their price realizations.
Hence the reasons the efforts of a few farms inspite of their good quality are not getting due justice in terms of price realizations in the Japanese market. The solution lies in right positioning ourselves i.e. push our national brand to the premium level 3 and then work on start working on secondary brand building i.e. farms brands. We could then have even 10 brands or more.
Most farms talk of average price of India roses vis a vis average price of Kenya or Ethiopian roses. But when we do some more product analysis, we observe that, more than 75% of the Indian varieties are between the ages of even upto 8-10 years. Compare this with the African countries Where the average age of the rose varieties is less than 3.! That is where the profit is! Hence the importance of national positioning..
A simple example of power of a national brand is - Which would you prefer a Japanese camera or a Chinese camera ? The answer is obvious ! That is the power of a national brand ! Not that the Chinese camera is inferior in terms of quality. But it carries a lower reputation. Thus the real competition in floriculture is between two regions – specifically two countries. Just like in say the tourism Industry - Two hotels in Ooty are not competitors to each other. Rather Ooty and Kodaikanal are competitors to each other for getting tourists.
One of the most powerful tools in creating a national brand is through supplying top quality roses and by honoring intellectual property rights of the breeder by paying royalty. The nation would then stand tall among the global suppliers. We would then attract the premium buyers and not the grade two buyers.
(C ). Flowers – A Luxury product and an Agriculture product .
Flowers carry a unique combination as regards its positioning. It’s a fresh agriculture product and unlike any other fresh agriculture products it’s a luxury product. The only common link with agriculture is that it also comes from the ground and is hardly a product of necessity. The process of flower production is agriculture while the product is of a luxury nature. This unique qualification puts a tremendous pressure on the growers who find it difficult to practice this to success.
All agriculture products are items of necessity and hence all what is produced is sold.. Thus in fresh food like vegetables and fruits, the price variation among different varieties and qualities is not as wide as compared to flower. The reason is due to different consumer profile. Unlike food products, flowers are meeting fancies of high end customers. In case of flowers if the flower quality is not good, one hardly get any decent revenues.
The focus in flowers unlike conventional agriculture is on quality and variety rather than on any quantity. Thus growers who are excellent producers would not be able to earn well enough unless their product is in tune with the market trends. They have to use the best of inputs, chemicals and fertilizers in order to produce the best quality. Growers need to upgrade the mindset from mass production to class production. With an agriculture mindset it is not as easy as the focus is many times is on cutting costs.
Inspite of all the above, surprisingly the performance of small farmers in floriculture have been very encouraging !
(D) Post Harvest
Many growers feel that their responsibility is over once the flowers leave their farm gate. However the prices are realized as per the quality on arrival at the customer’s premises not as per quality on departure. In an exporting nation we need to focus on post harvest more than anything else. Use of better and specific post harvest chemicals are the need of the times. In general agriculture produce, a significant part is lost due to poor post harvest facilities. This is one of the main reasons why small farmers are not able to make it to the global floriculture stage.
Factors such as vase life and transportability are gaining more importance as a criteria for rose variety selection.. Fortunately today the younger generation, want to be exporters and global players and are not anymore interested and attracted by the fixed prices offered by exporters. Progressive growers have started using better post harvest like Florissant as well and a few are sending the flowers in sleeves. Floriculture truly belongs to this generation of risk takers. This changing attitude of Indian growers is very encouraging
There are many popular myths and opinions among the various players of Indian floriculture. Rather than be a judge and say what is Right or Wrong it would be prudent to conduct an unbiased analysis with reference to the various levels of flower producers and then derive practical conclusion which could help in laying down a practical action plan for floriculture development
1. Myth - Salesmanship and Floriculture
The popular opinion has been that marketing of flowers is the subject matter of marketing experts and all growers may not participate in the same. Rather the growers should focus on growing and leave the marketing aspects to experts who know the job better.
Analysis
In any of the global markets today, flowers are paid for the price and quality as on that day. What can be a better example than that of the flower growers who supply to the Dutch auctions and receive different prices every day. Thus the very nature of the floriculture industry limits the skills of sales professionals. This is particularly true for a country like India which is still in Level 1.
However these same sales professionals would be of great importance if the country is in a mature Level 3, when it has a good quality product. Then in such a situation the sales professionals can sell the flowers down the marketing chain as close as possible to the retailers and develop a client base. This will help in getter higher sales realizations.
But India is in early stages of Level 2. Hence it’s a bit early for sales professionals to exercise their skills. It is now more of the Technical Professionals job to push India to Level 3. Then we should leave the stage to the Sales professionals to demonstrate their skills.
This is unlike in the case of consumer products wherein even with an average quality product, one can with the help of marketing gimmicks still manage good sales. In contrast, with flowers one cannot indulge in such gimmicks with long term success.
Marketing gimmicks are more successfully executed for selling soft drinks, soaps or washing powders. Marketing gimmicks are like cheerleaders in cricket – they give a temporary boost to the game. However the real game would get a boost if the cricketers are good. Thus in international floriculture marketing we need to develop long term marketing strategies
2. Myth - Get a good buyer
A Popular mantra is get a good buyer,and then all the market problems are solved
Analysis
All of us spend a lot of time in looking for a good buyer ! Where is he ? Who is he? What is a good buyer ?
A good buyer is one who offers the highest price for the produce and one who really pays the same in time. A good buyer will require a good producer. And when one finally meets the good buyer he will tell you that he is looking for a good producer. So there lies the answer.
It reminds me of the famous story of the man struggling to find an ideal women to be his wife and when he finally meets an ideal woman – she says that she is looking for an ideal man to be her husband.
So the conclusion is - be a quality producer of varieties demanded in the international markets and you would be more visible to good buyers,
3. Myth - Be the only exclusive grower for a rose variety in India and you will make money
Analysis
This is based on the popular myth that one should plant
- A rose variety that no other grower in India has
- Yet suitable to Indian conditions
- Getting high prices in the international markets
- Is such a thing rationally possible ?
Exclusivity hardly makes any business sense unless it is at the global level. Being the only grower from your country of 2% global floriculture hardly means anything when 98% of the world has it. The real competition is from Africa.
True Exclusivity has only meaning if you are the only grower in the world and when the variety is grown on say 5 hectares and not 2000 sq mts. The exclusivity should be for a minimum period of 3 years. Examples of global exclusivity are the famous Red Rose Varieties viz. Taj Mahal and Kohinoor with Tan Flora and Ace Agro respectively.
4. Myth - Assured market or better buyback guarantee
Analysis
This is one of the bigger myths.. The answer is as simple or complex as “Tell me how much money I can earn in the next 10 years ?
If there was a perfect answer to this all the banks would have set up their own floriculture projects ! Its all demand and supply economics ! Its all about entrepreneurship ! We are all smaller than the market !
5. Myth - Bypass the Middle man
Analysis
By pass the middleman and you will pocket that much more margin. Seems intelligent strategy but its easier said that done. We need a deeper analysis as to the various middleman and their functions. Some middlemen do add value some others do not. We need to identify the few value adders and delete the others.
6. Myths - African reference rose varieties
Analysis
Today we have a large network of Indian professionals working in Kenya and Ethiopia. As African floriculture economy is more mature than India’s, a number of growers get information on the rose varieties performance from Indian managers situated there and base their plantation decisions on such opinions.. But varieties which grow well in Africa may not be suitable to India conditions.
Hence India has to find its own varieties in its own numerous regional demo houses and test market the same. This would involve periodic visits to demo houses and selecting a variety on its ground strength rather than on opinions of people.
7. Myth -The time is not right now!
Analysis
One of the most intelligent suggestions typically given by accountants is that “The time is not right now. And so -
- Lets not change the plants this year even to any better variety.
- Lets plant whatever is available locally at a cheap rate
- Lets replant again for what we have paid Royalty
- This years we will earn as much as money as possible.
- Most important lets keep costs low.
- We will have a close look at the market this year and then we will make our plan on the performance on 31st March.
- May be (taking a big risk) we will plant 1000 sq. mts of one new rose variety and see what happens out of it “
Luckily all the rice and wheat producing farmers do not think this way otherwise we would have landed up in a real food crisis. Lets salute the Indian farmer for he is the most daring man in this country !
It’s a pity we are not looking at the opportunity costs. Whatever is produced is perishables and is sold !– The big question is ! - At what price ?– Is it economically viable ?
Thus the right time to make changes in plants and other improvements was yesterday ! After a second thought maybe Day Before Yesterday would have been better!
8. Myth -Tell me where is the market for Indian Roses ?
Analysis
Tell me where the market is and we will produce roses for it ? This question is commonly asked by accountants and bankers. It appears to be a very intelligent question. It’s fashionable as well and reflects the American way of thinking which is based on market research. If there was an easy answer, anybody would have started floriculture projects.
In reality floriculture markets are not officially created. Entrepreneurs create markets. Pioneers leads the way. At the end of world war II Japan and Korea were at the same level as India was then. What was different was their progressive thinking and entrepreneurial zeal. They looked at what they were good at and started producing it to world class standards. Products soon found export markets. That became their new culture.
Japan became a famous electronic nation and soon many more entrepreneurs started joining it. The country progressed to become a dominant electronic nation. It so became as it looked internally at what it could do better. There was no market for their products. The Japanese and Korean believe that if they can produce a product to global quality standards then they can market it. This they not only did in their domestic market but also in the international market with great success. We need to pick up lessons from them .
9. Myth -Select varieties based on high prices at the big Dutch/Japanese Auctions
Analysis
Prices are fetched as per the specific quality of rose variety from a particular country. When the same rose variety is grown in a different country under different climatic conditions, the quality with respect to the bud size, stem length and color may change, thus realizing a different price for the same variety.
Thus one should look at the sales price of different rose varieties from a broad point of view rather than with a speculative approach of a stock broker who monitors the share prices on his computer screen daily. Thus auction price indicate the acceptability of particular variety and the prices in the market.
In some cases little known rose varieties do better in India than in Holland and Africa. Therefore there is no big reflection of the same on the Auctions. Thus we need to look internally at our regional demo houses and create markets for what grows well to international standards and create a market for it. Sales professionals can play an important role in the same.
10. Myth – Safe to sell to Market Hubs
Analysis
A lot of flowers especially during the high seasons of valentine go through Auctions or through marketing companies. Majority of it is resold to various customers in western Europe situated in countries like Germany, UK, Italy etc.
Auctions are basically cooperative of local growers and hence would offer higher prices to locals growers. The big difference in price realized by local and foreign growers justifies the same. This is further affected by the high cost of auctions especially to foreign growers.
A prudent strategy would be to sell to direct markets especially in high season when the sales realization are higher. Hubs are best suited the home country and its neighbors not countries 8000 kms away.
Conclusion
Thus the critical need of the hour is to upgrade the Indian Rose Brand to New India Roses with national pride. As perishables are national brands we need to think as Indians first and then as growers.
The conclusions are obvious. The fact is that these various myths or popular mantras have stunted the growth of the Indian floriculture Industry.
The earlier we clear the same – the earlier we clear the runway for a smooth takeoff into the highly competitive global floriculture arena.
