ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, March 17, 1996 TAG: 9603150101
SECTION: BUSINESS PAGE: G-1 EDITION: METRO
SOURCE: MEGAN SCHNABEL STAFF WRITER
A grown man in a bee suit is an unlikely champion for a $14 billion national industry.
But the floral industry is staking its reputation - and $20 million - on a "spokesbee" named Buzz, who, the nation's florists hope, will encourage Americans to buy more blooms.
The problem with American consumers, says the Annapolis, Md.-based National PromoFlor Council, is that we're rooted in Puritan practicality and traditional masculine dominance.
The campaign, said PromoFlor spokeswoman Maureen Varnon, is supposed to show us rational, unemotional Americans that flowers aren't a luxury - that it's OK to buy flowers for no particular reason, and that men needn't be intimidated by florists.
The aim of the campaign is to increase consumer awareness - and, thus, increase consumer sales - of flowers. The timing may be perfect.
"Sales are flat," said Wayne Dunman, owner of Dunman Floral Supply Inc. in Vinton. "Flower sales are very flat."
For one thing, people simply don't send flowers for funerals like they once did. As florists say, it's the curse of the "please omits": mourners who request donations to charities in lieu of flowers.
And changes in health care have trickled down to florists as well. The emphasis on outpatient surgeries and short maternity stays means there's little time to send flowers to the hospital. Many florists now call the hospital before they send out a delivery van, just to make sure the patient is, indeed, still a patient and wasn't discharged hours ago.
Add to all of that the sluggish consumer spending that has plagued retailers generally for the last year.
"Discretionary spending," Dunman said, and shook his head. "People are being very careful with that."
And then there are the changes in the way flowers are sold. Consumers who once went to the corner florist for all their blooms now can buy flowers on the Internet and over the phone.
One of the most significant recent developments in the floral industry has been the expansion of floral departments in supermarkets and discount stores. According to The Floral Index Inc., a Chicago marketing firm, grocery and discount stores sold $6.6 billion worth of floral items last year, compared with $5.4 billion - 22 percent less - just five years ago.
Traditional floral retailers' market share has been shrinking since 1991, when such retailers accounted for 58 percent of total floral sales, vs. 42 percent for supermarkets and other mass marketers. Last year, flower shops captured 53 percent of the market. Whether retail florists should be concerned about the growth of supermarket floral departments depends on whom you ask.
"We used to feel intimidated by them," said Michael Polychrones, a nationally known floral designer with a shop in Northern Virginia. But not any more, he insisted. Today, he said, supermarkets represent just one more way to get the floral message out to consumers. "Anytime someone buys flowers, they enhance our world and increase the exposure of flowers."
But ask Betty Tuck, owner of Rodeyo's Florist and Antiques in Forest, and you'll get a slightly different view.
"Grocery stores are our biggest competitors," she said. It almost seems as though customers can't help buying flowers at the supermarket. "When they go to the grocery stores, there are the flowers, right there. And they're cheap."
That's the advantage of buying flowers in bulk, said Archie Fralin, The Kroger Co.'s Roanoke spokesman. The Cincinnati-based supermarket chain opened its first floral department in 1979; today, about 900 of Kroger's 1,200 grocery stores sell flowers.
The floral shops account for just 1 percent of the chain's total sales ($23 billion in 1994), but Fralin said flowers are a growing part of the business. New Kroger stores include floral departments with in-house designers, who can put together arrangements and offer floral advice. Some even provide delivery and special-event decorating.
Despite the apparent march into florists' territory, Fralin said grocery stores aren't in the business to squeeze retail florists out of the market. "We think they have a niche and we think we have our own niche," he said. Many grocery stores still don't provide delivery, so they can't be affiliated with national wire services and they miss out on a significant amount of business.
And despite the competition, retail florists can shine, said Jim Taetz, owner of Flowers By Jane Inc. in Roanoke, by offering personalized service and an eye for new trends.
"Since this is such a computer age, people want to be recognized as a name, not just a number," he said. "When they come in here, I know them. I know how many kids they have. After 21 years in the business, it's one big family."
The PromoFlor campaign - five television and radio spots - is scheduled to run during slow flower-buying months. It started after Valentine's Day and will run through Easter, and then resume after the Mother's Day rush ends.
The commercials push neither a specific flower nor a certain type of floral retailer, PromoFlor's Varnon said. Buzz merely urges consumers to "think flowers." Not roses, not florists - flowers.
Within the industry, opinions about the promotion are more of a mixed bouquet. Some florists applaud the efforts to draw attention to their business, while others say too much money is being spent on a program they believe won't change anything.
In the world of national corporate advertising, the $20 million that PromoFlor is spending is relatively small petunias. The Philip Morris Cos., after all, spent $44.8 million in 1995 just to promote Jell-O.
But unlike companies such as Philip Morris, the floral industry didn't have an advertising budget. In fact, until the council was created, there had not been an all-out promotion of flowers in this country, aside from ads for individual wire services.
PromoFlor is the result of something called a promotion order. Essentially, the floral industry followed the same path that milk and pork producers and other industries took: It gathered support for an advertising campaign, then persuaded Congress to pass legislation creating the council.
PromoFlor is regulated by the U.S. Department of Agriculture and directed by a 25-member board of directors, appointed by the secretary of agriculture and composed of growers, retailers, wholesalers and importers. The industry pays for the federal oversight out of its promotion budget.
The legislation creating the council also set up its funding structure. And that's one reason, Varnon said, that the promotional campaign has taken close to two decades to get off the ground.
"A large portion of the industry definitely wants PromoFlor," she said. "But then it comes down to who's going pay for it."
The final version of the legislation assesses floral wholesalers who do $750,000 or more in gross cut-flower sales a year. Each wholesaler - there are about 1,000 nationally - contributes half a percent of monthly sales to the fund; the contributions average out to $20,000 apiece. Wholesalers who refuse to pay are violating a law and are subject to prosecution.
Taetz, the Roanoke florist, said many wholesalers, including Dunman, have been absorbing the charge rather than passing it on to retailers. That helps the consumer, but eats into wholesalers' profits.
"Frankly, I was on the negative end of it," said wholesaler Dunman. Wholesalers usually operate on a very slim profit margin, he said; someone who makes 2 to 2 1/2 cents on the dollar is doing well. The contribution to PromoFlor can hurt the bottom line, he said, especially because supermarkets - which often act as their own wholesalers - are exempt from the promotion order.
The program will come up for a referendum in December 1997, when industry members will vote on whether to renew the promotion.
"If it's going well and I see the results, I'll vote yes," Dunman said.
"Clearly, if this is as successful as we hope it will be, every segment in the chain will benefit," Varnon said.
The definition of "successful" is still open to interpretation. Flowers are purchased by only about 25 percent of households in a given year, Varnon said. Might this rise?
"Numerically, we really haven't set a goal for this yet," she said. To expect such a promotion to boost flower sales immediately is unrealistic, she said. "Our short-term goal is really to raise consumer awareness."
LENGTH: Long : 148 lines ILLUSTRATION: PHOTO: WAYNE DEEL/Staff. 1. Jim Taetz, owner of Flowers By Janeby CNBand president of the Blue Ridge Teleflora region, believes retail
florists can survive by giving personalized service and keeping an
eye out for new trends. 2. Flower shop owners and floral arrangers
get a chance to show off their talents at a Teleflora workshop at
Hotel Raonoke earlier this month. 3. (no caption).