Happy Valentine’s. For those of you who gave / received roses, bravo. Life is short, enjoy. Indulge yourself and make others happy. So do you know why roses are so popular?
- B2C: It’s the epitome of beauty and elegance. It’s what people want
- B2B: They can survive international shipment
For those impatient readers, I’ll cut to the chase. B2B.
There is a great Planet Money podcast from 2015 here, that is so good, I still remember it 3 years later. The storyline goes like this. My “strat professor” hat commentary in red.
- They profile a flower shop in mid-town Manhanttan. Roses and Blooms
- Dozen of roses on Feb 14, 2015 cost $80, on Feb 15 $48. Willingness-to-pay
- Valentine’s day flowers is all about logistics. Hundreds of millions of roses are flying from Africa and South America to the North (Europe, Japan, US) first week of February Just in time shipment of a perishable product
- Great article here from Wall Street Journal today about how a strong global economy created issues for African flower producers (competition for plane transportation)
- Gotta figure out how to make the roses bloom at the same time of the year. This takes all kinds of horticulture magic to time the blooming perfectly. Trivia: customer tastes vary – Russians like their roses open-petal, Europeans like them closed-petal
- Roses and Blooms (in 2015) chose to single-source their roses from 1 farm in Ecuado; this is definitely cheaper, but also riskier. Putting all your faith in 1 farm. The COGS cost was $1.4 per rose, but Ecuador is 4,000 miles form Manhattan
- Long time ago, they gave violets and local flowers. However, as the Valentines became popular, they had to find a flower that was tough enough to endure global flight.
“We like roses, because they were optimized for the global transportation chain. They were the best flower that worked with the planes, and boxes.”
Roses are tough. I know, romantic.