Flower staging at Aalsmeer FloraHolland in Amsterdam
Today is Valentines Day, the annual festival of romantic love when many of us will be sending flowers. And even though we’ll be buying them locally, most of the blooms will have only just arrived from overseas. Ever wonder how flowers cut fresh in Europe, Africa and Israel can wind up for sale in America the very next day? The answer lies in the wonders of the Dutch Flower Auction.
A platform built for speed
Over the past century, the Dutch have perfected a trading platform that can rapidly move millions of cut flowers around the world, making what until recently seemed impossible – delivery to North America within 24-hours from overseas.
How have they done this? By creating hi-velocity supply chains to accommodate flowers’ perishability and by establishing central distribution points for trade. In other words, the Dutch flower auction eliminates the middleman so buyers and sellers can deal with each other directly.
The story begins with the arrival each day of millions of flowers to FloraHolland, a superpower in the floricultural world. The company runs six auction houses throughout the Netherlands and accounts for 90 percent of the Dutch floral trade. According to the latest statistics, in 2015 the Netherlands ranked first in the world in total flower bouquet exports by country, accounting for roughly 40 % of total flower bouquet exports worldwide.
With daily sales of well over 20 million plants and flowers, FloraHolland’s auction houses together comprise the largest flower auction in the world. In addition to the Netherlands (which is itself a major producer of cut flowers), more than 10 countries, including Europe, Ecuador, Colombia, Israel, Ethiopia and Kenya all use the Dutch auction as a gateway for distribution.
How the Dutch Flower Auction works
When your business is moving millions of cut flowers daily, keeping the product fresh is the primary concern. To meet the challenge, the Dutch have created lightening-fast logistics. The whole process begins with a collaborative effort undertaken by Amsterdam’s Schiphol Airport, ground shipping companies and the Dutch government.
Workers loading trolleys at Aalsmeer Auction House
Nicknamed Hub Ways, the approach works to improve traffic flow both to and from the airport and between the six FloraHolland auction sites. And it’s serious business. At times, Hub Ways has even gone so far as to widen rural roads to facilitate the flowers’ distribution.
To be sure, the largest and most famous of the six auction houses is the Aalsmeer Flower Auction. Often referred to as ‘the New York Stock Exchange for Flowers’ it occupies a massive building measuring an astonishing 10.6 million square feet (243 acres, or roughly two football fields). It is the largest flower trade center in the world.
Photo credit: www.hollandfoto.net / Shutterstock, Inc.
On a busy day, the Aalsmeer Flower Auction Hall sells millions of cut flowers to around 2,800 wholesalers and exporters. The buyers arrive at 6 am (midnight EDT) in the morning to bid.
Racing against the clock
While the supply chain ensures the flowers arrive quickly, the Dutch Auction Method speeds the transactions at the points of sale. To accommodate their products’ perishability, Dutch flower auctions run on a system that is the flip side of traditional auctions (in which bidders push prices up from below.) Also known as clock auctions, the unusual format is designed to ensure the highest transaction speed.
However, these days there is no longer an actual clock. Instead, the auctioneer operates a digital circle. Buyers connect to the clock of their choice by means of a headset. Then they submit their bids electronically.
Dutch auction clock/ Click here to see how it works
Each auction begins with the auctioneer setting a high price on the ‘clock.’ Next, the price is rapidly lowered by increments as indicated by a moving red dot on the circle. The first buyer to press the button and stop the clock is the highest bidder. Generally, the whole process takes around five seconds.
Flowers ready for auction
Adrienne Lansbergen, spokeswoman for Bloemenveiling Aalsmeeran, describes the process this way:
“It is really stressful. If you wait too long, as the flowers are passing by, they may be bought by your competitor. If you push the button too quickly, you may pay too high a price.”
Clearly, speed is the king of the auction.
Once the transactions are made, the flowers are electronically labeled and placed in buckets. Next they’re sped away on electric carts to the distribution center. Upon arrival, employees in mini electric trucks pull the buckets and redistribute them to new trolleys. Then the flowers proceed onwards to their new owners’ processing areas.
Flowers heading to the distribution hall at Aalsmeer
Depending on the species and where they are going, the flowers receive different packaging to keep them fresh as they travel. This may include insulated cardboard boxes, ice packs to provide cooling, and/or flower mats, which absorb humidity and prevent mildew growth. Finally, the flowers are sped by truck back to Schiphol Airport, where they are loaded back onto planes for delivery overnight.
FloraHolland estimates that around Valentines Day, they trade over 300 million flowers. Of these, roses, tulips and chrysanthemums are the three top selling blooms. Nowadays, most of the roses come from Kenya. Such a long race to get here — something to think about when arranging your Valentine’s Day blooms in the vase this year.