Page 1

Flower perishable feature example With love from Columbia Talk about value-added By Rick Eyerdam Business is business but sometimes the human equation is worth as much as the financial. One glowing example is Juanita McAllister who has nurtured flower farming into a million dollar, niche export business while her company, Vistaflor, is turning around the lives of battered women and drug war widows and men who prefer to make an honest wage designing and delivering some of the most beautiful flower arrangements in the world. McAllister credits FedEx Trade Solutions with making much of it possible. Talk about value-added McAllister’s company has trained a generation of horticulturalists, flower arrangers, warehousemen and logistics experts, and given them health care, pensions and a future. Vistaflor and its partners at FedEx are in the midst of a blooming revolution in Colombia, which is striving to shake its image as a drug haven and to reach employment standards that will satisfy the greenest and most pro-union members of Congress. The principal national organization, the Association of Colombian Flower Exporters, has as its marketing motto “sustainable floriculture with social responsibility.” Of the 200,000 workers in the industry, 60 percent are women heads of households. None are under the age of 18, although the law allows them to work at 16, McAllister and FedEx officials said in an interview. All are covered by social security; all have clearly defined work contracts; and 14 percent are organized into labor unions. More than 30 percent of those who are not union members are still covered by collective bargaining agreements. The floriculture industry provides day care, support of traditional schools and access to advanced training in floriculture. Where crime and abuse can be a problem, programs are offered to mitigate conflict at home and provide shelter to abused spouses. Back in 2004 as this movement was becoming a viable force, Andres Pradilla and Eduardo Garrido, two local FedEx executives recognized that the Vistaflor product was the perfect vehicle to demonstrate the FedEx Trade Solutions business model which was then still on the drawing board. It took a major streamlining of procedures for tracking, the import of special shipping crates from Holland and a mutual commitment. But this year, if you order flowers or a delicate fresh arrangement on line from or three days before Valentine’s Day, the exact arrangement is guaranteed to arrive fresh as a mountain breeze, via FedEx, at the end of a solid cold chain that reaches from Vistaflor to Bogota through Miami and to your door. In 2008 the company shipped hundreds of tons of bouquets in this way with an unconditional satisfaction guarantee. Gross sales totaled more than $1 million and, according to McAllister, exports so far this year have almost doubled despite the recession. She expects that Vistaflor will ship more than 100,000 boxes of flowers this year, mostly around Valentine’s Day and Mother’s Day. But much of her business is for

wedding kits customized for each occasion and shipped directly to the bridal party by FedEx and McAllister said the majority of her business until this year has been direct to consumers. But now it is establishing joint ventures with flower shops, and it is also considering arrangements with religious organizations that need long-lasting and durable floral arrangements for their holy days. “We embrace change, new thinking, new processes, new services,” McAllister said. “Passionate people make great things happen.” Enter the McAllisters McAllister’s grandfather arrived in Colombia from Scotland in a quest for something different and was graced with the love of Juanita’s grandmother and her father. In exchange, the Bogota McAllisters lived on a huge, verdant ranchero high on the mountain plain, the 450-year old summer home redolent in the easy-growing native flowers. In 1968 the Colombian government provided a pamphlet from an American university that suggested the cool, moist savanna would be prefect for a commercially viable crop of decorative flowers and plants. The family read the paper and decided to sell the cows and horses and give it a try. Today, Colombian flower growing has gone from exporting a few thousand dollars worth of flowers a year in 1970 to more than $1 billion last year, with about 85 percent going to North America. In the span of 40 years, Colombia has gone from having no floriculture industry to the world’s second largest flower exporter and the top carnation exporter in the world, with a 14 percent share of global trade in flowers. The Netherlands holds a 56 percent market share. Columbia has also become the source for about 77 percent of the flowers consumed by Americans, and most of that consumption comes around Valentine’s Day, followed by Mother’s Day. More than 80 percent of those flowers clear customs at Miami International Airport in a froth of colorful chaos as the holidays approach. Flowers are Colombia’s third largest source of foreign exchange after oil and coffee, and a leading job generator in central Colombia. About 95 percent of total production is sold abroad. Flowers are also Colombia’s first non-traditional export, accounting for 8 percent of all foreign sales. Sophisticated market Good logistics, in addition to marketing, consumer-oriented production and outstanding management, have produced significant growth in Colombian flower exports. Today, the industry exports more than 50 kinds of flowers and thousands of pre-arranged bouquets and bunches to more than 100 countries around the world, although it is still focused on the U.S. market, which continues to be the main buyer. The flower industry has earned support from the Colombian government for promotional campaigns in the United States. The government also provides a subsidy to protect flower exporters against exchange-rate fluctuations so they can obtain a minimum dollar price for their foreign sales.

In the North American market, Colombian flowers benefit from the Andean Trade Promotion and Drug Eradication Act, a trade preference agreement that permits more than 3,600 products from Colombia, Ecuador, Peru and Bolivia to enter the United States duty-free. The act, which has to be renewed annually, was approved last December with barely a peep from Congress -- despite the furor over the U.S.-Colombia Free Trade Agreement, which would either eliminate or slash Colombian tariffs on imports from the United States. According to the flower association, 18,000 acres were devoted to flower farming in 2007. Exports that year totaled 231,943 tons. Roses accounted for about 25 percent, followed by carnations, 14 percent, bouquets and chrysanthemums, 13 percent, mini carnations, 8 percent, astromelias, 7 percent, and other varieties, 33 percent. Vistaflor is just one of several flower business that have signed up for the FedEx Trade Solutions program after trying alternatives such as selling flowers to brokers at the Bogota airport who ship the products to Miami where they are sold by other brokers to wholesalers and then to florists. To handle the work FedEx deploys a ground fleet of 34 vehicles but typically accepts perishables in refrigerated trucks provided by the shipper. Flowers are exported five day a week on A-310 jet freighters. After they clear customs and federal Food and Drug Administration scrutiny in Miami, they are transferred to FedEx reefer trucks. Most of the flowers are trucked to the FedEx hub in Memphis, although sometimes they will be flown in order to meet a delivery deadline. From Memphis the flowers are sorted for distribution around the country.

02 09 fs flower feature