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February’s cringe-factor: Why do flowers cost so much more around Valentine’s Day?

Oh, yes! We hear it every year — on the news, from our employees, from our walk-in customers, on social media, and even from our own company leadership!

Why do flowers cost so much more around Valentine’s Day?

Without the below economic factors stored in our arsenal and used to educate those around us, retail associates become frustrated, customers feel price-gouged, news media gets it wrong, growers are pressured to cut corners and company leadership expects rock-bottom retails that devastate the P&L.

cringe1 So, what are the five key factors that contribute to higher Valentine’s Day costs?

1. Supply vs. demand

Remember the ole’ “supply vs. demand” chapters from those thick economics books? Well, that’s a good place to start. Supply and demand is the relationship between quantity of a product available vs. the quantity that customers wish to buy. In total balance, the quantity of available product would equal the quantity of customer demand. But we all know there’s no supply-demand equilibrium during Valentine week. Of course, if 30 percent of our customers would agree to purchase their Valentine flowers in August, the supply-and-demand problem would be solved. But that won’t happen, and it never will. Which brings us to “freezing over”…

2. Winter climate

Winter’s shorter daylight hours and lower temperatures add additional production costs at farm-level. Additionally, to prepare for the enormous Valentine’s Day volume during a small two-week window, rose farms cut their crops back in the late fall so that 100 percent of the greenhouse crops are on-spec to harvest for Valentine’s Day selling. Subsequently, roses which would normally be available to sell the 12 weeks before and the 12 weeks after Valentine harvest, are not available and the cost of this diminished “everyday” production is factored into Valentine pricing. It’s the cost of doing business, and the cost to produce enough Valentine‘s Day product to satisfy customer demand. Now, how ‘bout those yellow roses for Valentine’s Day?

3. Color assortment

In addition to the limited availability of roses as a whole category, we know that during Valentine’s week, the flower colors in highest demand are reds and pinks. This limits availability even more. Over the years, the industry has improved in wisely promoting other colors for Valentine’s Day, but red and pink roses remain in highest demand as they are the hardest to find in total anticipated volume. This red/pink color-specificity affects costs even more on top of already limited production. So then why don’t farms just plant more reds and pinks? Because we’d have the same problem in the fall, when the demand for pastels are in the tank! Rose plants produce for four to six years, so they’re not pulled out and replanted for each holiday!

4. Transportation

Airplanes and truck space are at a premium, as additional transportation resources are required for the ten-fold Valentine volume. Trucks and cargo planes experience the same supply-and-demand fluctuation as the product, itself. Savvy buyers are able to mitigate some of this cost by optimizing more truckloads, but these plans must be made well in advance. Drivers, as we know, require a specific skill and have been decreasing over the past years. The pressure of on-time arrivals while driving in winter weather adds even more costs to the transportation line.  

5. Labor

Additional labor needs for Valentine’s week affects costs from the farm, through the warehouse to the store. While labor is a percent of sale — and sales will dramatically go up thereby decreasing the overall percent of labor — there is still advance-scheduled labor that must be paid for ahead of time before the sales volume rises: planning meetings, training hours, receiving flowers, processing, creating products, upgrading, inflating balloons, etc. Additionally, temporary helpers are never as fast and productive as seasoned employees, so extra hours are eaten up due to inexperience, as well.

While talking about higher pricing is never pleasant, it’s important to understand the five key economic factors so that they can be explained to others. This is not a new phenomenon, just a misunderstood one. But we’ve collectively made the Valentine’s Day holiday a success since the 1850s, so there is no reason it won’t continue in 2019!