Dutch flower auction in the midst of an upheaval

Aalsmeer near Amsterdam has been the hub of the global flower trade since the early 20th century

Each weekday morning, the buyers descend on Aalsmeer, about a half-hour southwest of Amsterdam, Netherlands, arriving at an enormous warehouse covering some 2 million square metres.

They squeeze onto benches, glare at computer screens and, with the push of a button, bid on an encyclopaedic array of flowers: everything from amaryllis, chrysanthemums and gerbera to kangaroo paws, roses and, of course, the famed Dutch tulips.

Then, from nearby Schiphol airport, the flowers can be sent across the planet. Today, more than half of the world’s cut flowers are bought and sold at the auction here, which has been the hub of the global flower trade since the early 20th century.

But that system, which helped make flowers as synonymous with the Dutch identity as wooden shoes and windmills, is in the midst of an upheaval, buffeted by changes that are revolutionising the business and upending traditions. “We’ve had this system that has been very dominant for more than a hundred years that is more or less changing or disappearing,” said Herman de Boon, the chairman of the Dutch Flower Wholesale Association.

Concerns about carbon dioxide emissions and the cost of jet fuel have steadily squeezed the global transportation network, even as more growers have moved from Europe to warmer, and less expensive, climates in Africa in the last decade. Then there has been the growth of presales and direct shipping. Today, virtually anyone with an Internet connection and a buyer’s license can bid via computer at the auction without actually having to come and inspect the stems.

“It was more fun 10 years ago,” Marco Schouten, a buyer for FloriBizz who purchases roses for florists in Italy and Spain, said during a break in bidding one recent morning. “There was noise and friendship.” Even so, the flower industry – still more than 5 per cent of the Netherlands’ gross domestic product – has been remarkably resilient, adapting to its changing climate far faster than many of its flowers have.

Geert Hageman, a veteran tulip grower, explained why, for instance, Triflor, his tulip business, had not suffered even during Europe’s lingering economic troubles. Because people have less money to pay for vacations and evenings out, he said, they tend to stay home, where they crave a relatively cheap luxury in a time of austerity.

“In Europe, if you don’t have flowers in the house, it just looks naked,” Hageman said, surveying the work of a half-dozen workers pulling young tulips from movable flower beds at one of his greenhouses in Oude Niedorp, a tiny village about an hour north of Amsterdam. He also pointed to the opening of fresh markets to satisfy the growing middle classes of Eastern Europe and Russia. “They love flowers over there – it’s really nice,” Hageman said happily.

But while big Dutch producers like Triflor, which can grow 1.2 million stems at a time, are doing well, many smaller growers, especially those that depend on expensive greenhouses, have been pruned from the marketplace in recent years.

The cooperative FloraHolland represents Dutch and international growers and runs auction and distribution centres. It says that from 2008, when the financial crisis started, to 2013, its membership dropped to 4,600 growers from 5,100. At the same time, profits grew to 4.5 billion euros (about $5.6 billion) a year from 4.1 billion euros, in transactions or 12.4 billion plants and flowers each year.

While that total has remained relatively consistent, the number of items traded at the Aalsmeer auction has actually decreased. This fall, FloraHolland stopped sending its cut flowers to the Aalsmeer auction rooms, to keep them fresher for longer. Not long ago, such a move would have been inconceivable. As recently as a decade ago, virtually all cut flowers sold to wholesalers were sold here. Last year, only half were.

Buyers still come to examine flowers in cooling rooms before the auction starts at 6 am. Carefully, they watch an enormous clock that sets the price for flowers, counting down usually from 1 euro per stem. The buyer who pushes a button first tells the auctioneer how many buckets he wishes to purchase at the price selected.

The bidding is concentrated and zealously guarded. A female photographer sent by The New York Times was denied access to the front of the trading floor, unlike a male colleague, who had been granted access. An official FloraHolland guide working in the auction’s public relations department said that the photographer would distract the buyers, who are overwhelmingly men.

But more of them are buying at a distance, with growers supplying digital photos and data on the length, size and health of flowers. Hageman estimated that 40 per cent of his tulips were now sold before they were grown and harvested, which he said helped him plan for peak periods like Valentine’s Day and Mother’s Day.

He rarely goes to the auction now, he said. Instead, he follows the action from a terminal in his office, which shows the clock and the price his tulips fetch in Aalsmeer, some 30 miles south. Still, “the auction clock is really important,” he said. “It will stay with us.” He explained that it gave him and his colleagues a benchmark to set prices for new varieties.
Likewise, more of the flowers, particularly roses, grown by producers who have migrated to Africa or elsewhere never actually see the auction hall. “The energy cost and the labour cost are the main reason that the roses are grown in Africa these days,” said Arie van den Berg, a second-generation Dutch rose grower who has shifted the bulk of his production to Kenya and China.

New technologies

His company, Van den Berg Roses, still tends to grow its exotic and valuable flowers in the Netherlands, where daily shipping to the auction centre is less challenging.

But cheaper roses are mostly grown in Africa and sold directly to big retailers, such as the German discount chain Lidl or the British supermarket giant Tesco, which prefer fixed contracts to the daily fluctuation of the auction clock.

Such changes are challenging the status of the Netherlands as the centre of the flower trade. And still more are on the horizon. Researchers at Wageningen University, about 50 miles southeast of Amsterdam, are working on ways to keep cut flowers in shipping containers for several weeks by putting them in near-freezing temperatures.

While the technology is still in the testing phases, it could eventually allow growers to send flowers by boat rather than plane. Eric van Heck, a professor at the Rotterdam School of Management, said that even though the Dutch flower auction might be on the wane, the logistical and financial services that have long made it vibrant may yet allow the Dutch to prevail.

“It’s about connecting and creating a digitised platform to trade flowers,” he said. “You can’t make your living in the physical boundaries of the Netherlands.”