Amitesh singh yadav

FLORICULTURE

AMITESH SINGH YADAV

PRODUCT AND MARKET SELECTION

AMITESH SINGH YADAV

Business Case Study

Contents

• FLORICULTURE AND ROSE STEM MARKET• INTERNATIONAL MARKET FACTS ( LEADING EXPORTERS/ IMPORTERS )• INDIAN MARKET FACTS ( REGULATORS, POLICIES, ORGANIZATIONS ( IFAB), TRADE BODIES)• OVERVIEW OF ROSE STEM INDUSTRY• PLAYERS IN THE ROSE STEM MARKET• PRODUCT OFFERINGS ( VARITIES OF ROSES, HYBRIDS, GREEN HOUSE, HYDROPONICS, CUT, DRY )• APPLICATION OF ROSE STEM ( END USERS )• A HYPOTHETICAL SITUATION ( USE OF SENSITIVITY ANALYSIS, OPTIMUM PRODUCT AVAILABILITY)• QUALITY CERTIFICATIONS• LEADING INDIAN EXPORTERS OF ROSE STEM• RECOMMENDATIONS

• Merits and demerits of all three options• Identify competitors

FLORICULTURE

• Floriculture is a fast emerging and highly competitive industry. With the continuous introduction of new cultivators and new crops, cultural techniques are changing and hence new products are developing. Ornamental crop culture technology is improving with the availability of equipment and there is a sea change in the trend of consumers. A new generation of growers is coming forward to employ modern technology for maximizing production and offer quality produce for consumer acceptability, thus fetching a better price. It has emerged as a lucrative profession with the much higher potential for returns compared to other agri-horticultural crops.

INTERNATIONAL FLORICULTURE MARKET• GLOBAL TRADE VOLUME IS ESTIMATED TO BE MORE THAN

$100 BILLION PER ANNUM

• MAJOR CONSUMER MARKETS • GERMANY ( 22%) US ( 15%) FRANCE ( 10 % ) UK ( 10 %)

NETHERLANDS ( 9%)• JAPAN ( 6%) SWITZERLAND ( 5%) ITALY ( 5%)

• TRADE IN FLORICULTURE IS GENERALLY REGIONAL

• CAGR 15% , EXPECT TO Rs 9 LAKH CRORE MARK BY 2015 FROM 6 Lakh currently

• Relatively new producing countries : Israel, Colombia, Ecuador, Kenya, Ethiopia

• FLORICULTURE EXPORT IS DOMINATED BY KENYA, ETHIOPIA, ECUADOR, COLOMBIA

TOP 10 IMPORTING COUNTRIES BY QUANTITY

TOP 10 IMPORTING COUNTRIES BY VALUE

INDIAN FLORICULTURE MARKET

• The Indian floral industry is growing at a very rapid pace.

• According to industry reports, India’s floriculture industry is likely to cross the Rs 8,000-crore mark by 2015 and is growing at the rate of 30-40 per cent.

• Government of India has identified floriculture as a sunrise industry and accorded it 100 per cent export oriented status.

• Owing to steady increase in demand of flower, floriculture has become one of the important Commercial trades in Agriculture.

• The trade is The flower retail industry in India is worth around `3,700 crore. Growing at about 30 per cent per annum, it is expected to cross `8,000 crore by 2015considered a goldmine.

• India is ranked 23rd in the world in terms of floriculture exports

EXPORTS FROM INDIA 2012-13

EXPORTS FROM INDIA 2012-13

MARKET CHARACTERISTICS

• With over 300 million people in middle and higher income groups, India is the world's second largest consumer base and fastest growing retail destination. Numerous festivals along with increasing modernisation and per capita income make India a floral super power of the future.

• A huge domestic market supports high quality export-oriented flower production. The production of flowers was estimated to be 1.031 million loose flowers and 690.27 million cut flowers in 2012-13.

• Floriculture in India comprises both traditional and modern flower crops. Most traditional flowers are grown in open fields while modern flowers are grown under protected conditions. The traditional flowers grown in the open include chrysanthemum, jasmine, crossandra, rose, tuberose, aster, marigold,

• The chief flowers grown under greenhouse conditions are rose, gerbera, carnation, bird of paradise and anthurium.

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MARKET STUDY-SEGMENTATION

• It is necessary to study the local retail market and district level retail and wholesale market.

• The main purpose is to understand the consumption pattern of the nearby consumer segment so that the types and varieties of the flowers may be planned accordingly.

• In floriculture, it is considered that nearer the supply destination, better the value realization as the shelf-life of flowers are very limited. Hence, it is better to target the local markets for supply and therefore the production planning should incorporate the varieties accordingly

• NICHE Marketing for Hi Tech floral Industry

MARKET STUDY-CHALLENGES

• In a country where every nook and corner has street florists,the entire industry is unorganised and uneducated. Hence, it is difficult for players to enter the market which doesn't have an ecosystem to support the organised concept.

• Achieving success is not easy while serving an unorganised market with untrained manpower and an expensive retail space.

• There was no organised rental space and the concept of gifting flowers on occasions was almost non-existent over a period of time .

• Lack of Cold storage facilities and proper system related supply chain management

STREGNTHS:

Varied Agro Climate conditions

Availability of labour at low costs

Ample agriculture land

WEAKNESSES: Exorbitant Air freight charges for export Unorganized sector Lack of Storage facility and proper supply chain

management system

OPPORTUNITIES: Work with best talent in the market

diversify production

Find innovative, and foreign colloboration

THREATS:

labour shortage and high attrition rate in view

inflation persisting in Indian market

Ethiopia China and kenya

SWOT ANALYSIS –INDIAN FLORICULTURE

PRODUCT PORTFOLIO

SUPPLY CHAIN• Growers& Exporters• WHOLESALERS /AGENTS• RETAILERS / LOCAL FLORISTS• CUSTOMER

PLAYERS IN THE MARKET• AUCTION HOUSES ,• BOUTIQUE • MANUFACTURERS, • RETAILERS

OBJECTIVES OF THE CASE STUDY

• MAXIMIZE PROFITS AND REVENUE YIELD BY ADOPTING BEST APPROACH

SOLUTION :The best approach chosen in this case study is Integrating other Downstream services compared to other methods depending on the recent market trends towards ecommerce online social media Cloud computing and mobile internet.

Increasing Revenue Yield

• The consumer mindset has definitely shifted from offline shopping to experimenting with shopping via the new media.

• Over the years, more and more consumers are willing to shop online. Consumers lead a fast-paced life and online shopping is a blessing in disguise for them.

• variety of options for customization of gifts, keeping in mind consumer requirements

• The new tech-savvy consumers, mobile internet has picked up the pace in the last few years.

Business Plan on Ecommerce • Creating a brand in functional e-commerce business model and become pioneers in the growing

mobile ecommerce too with strategies that focus on R&D and understanding consumer behavior in floriculuture.

INTEGRATING OTHER DOWNSTREAM SERVICES

• TYPICAL DOWNSTREAM SERVICES• BOUTIQUES, FLORAL DECORATIONS, GIFTS,

DESIGNER PRODUCTS,GIFT BASKETS,CUSTOM GREETING CARDS

• Retailing• E-Commerce• Export • Lawn Designing

E-Commerce

• Starting e-commerce website is a one-stop shop that delivers products across cities.

• Apart from leveraging the product portfolio on social media platforms, we can also advertise within the social media space to reach out to the new-age digital consumers.

• To spread the offerings across renowned online deals websites like Snapdeal, Timesdeal, etc.

• Joining up with other venture to create a cross-platform app, to enable a comprehensive and smooth buying process for customers.

• Loyalty Programmes, which add to our customer’s satisfaction.

• We can integrate the workforce comprised of designers, delivery boys and sales representatives work ‘round the clock to deliver on our commitments. • To make the occasion special, we can also offer special packages,

customized gifts, musical delivery and midnight delivery options along with flowers. • The USP of our service will lie in the transparency and flexibility offered to

the end consumer, enabling a smooth buying experience.

• Foreseeing our e-commerce business picking up as a preferred medium for gifting resulting in a 50-50 ratio of revenues from retail and e-commerce

Lawn Designing & Nursery

• There is a growing environmental concern and planned urban development.

• Demand for landscape designing in residential complex, technology parks, parks etc.

• There is a scope for providing grooming and maintenance services for the lawns and parks.

• This service can be provided to single house owners too.

Identifying Markets with Higher Yield for lean months

• Seasonality was observed for all the cut flowers. For rose the arrivals reached a peak in February followed by another peak in December-January, while they were lowest in March

• The arrivals reached the minimum in the month of March with an index of just 42.The analysis revealed that in general the cut-flower arrivals are higher during November-February season. The rose arrivals were found to be more stable compared to other two flowers.

• Indices of rose prices ranged from 62.98 to 153.91, peaking in December and reaching the bottom in March .

• Many flower-growing areas of the west have extreme winters with sub-zero temperatures and hardly any sunlight. This results in the seasonality of the flowers and the growth of the flowers throughout the year is not possible. For instance, Europe, the major consumer of cut flowers, confronts adverse cold conditions during the season of peak demand for flowers during December-March. On the contrary, India has varied climate and soil conditions, which are conducive to the production of cut flowers. In south India winters are not severe and there is abundant sunlight.

• To sum up, it was observed that the seasonality in cut rose flower arrivals at India does not vary much. Hence one can go Product diversification or development rather than concentrating on markets with higher yield for lean months

MIXED APRROACH

• BUILDING BRAND NAME• PRODUCT VARITIES • INVESTMENT IN R&D• OWN RETAIL INITIATIVES IN LEADING METROS• ONLINE PRESENCE• ADVERTIZING• QUALITY CERTIFICATIONS

RECOMMENDED STRATEGIES

• INDEGENIZATION• BIOMASS BASED POWER GENERATION ( SAVINGS )• RAINWATER HARVESTING

• REQUIRED SPECIALIZATIONS• GREENHOUSE MANAGEMENT• DRIP IRRIGATION• MATERIAL SOURCING• AGRONOMY• PEST MANAGEMENT• POST HARVEST MARKETING• LOGISTICS MANAGEMENT

RECOMMENDATIONS

• ASSOCIATION WITH EXPORT PROMOITON BODIES• INCREASE IN PRODUCTION OF VALUE ADDED PRODUCTS• TRAINING OF PERSONNEL• AWARENESS OF EFFECTIVE QUALITY CONTROL MEASURES AMONG

PRODUCERS AND EXPORTERS• ESTABLISHMENT OF APPROPRIATE MARKETING AND SITRIBUTION

CHANNELS• ASSOCIATION WITH EXPORT PROCESSING ZONES

• STRONG ONLINE PRESENCE• CROSS SELL AND UPSELL ( WEDDING FLORAL DESIGNS, STATIONARY)• USE OF BOUQETS FOR MEETINGS AND WELCOME AND FAREWELL

FUNCTIONS HAVE BECOME COMMON• ROSE PRICES NEVER CAME DOWN IN 2013• TYPICAL PRICES RS 10 PER STEM AND 5000 TO 10000 RS DURING

WEDDINGS

ORGANIZATIONS

• Agricultural & Processed Food Products Export Development Authority – APEDA• FLORICULTURE TODAY ( MAGAZINE )• ASSOCHAM STUDY

“INDIAN FLORICULTURE INDUSTRY -THE WAY AHEAD”• INDIAN SOCIETY OF FLORICULTRE PROFESSIONALS• SOUTH INDIA FLORICULTURE ASSOCIATION ( SIFA)

POPULAR FLORAL COMPANIES

• EURO FLORA• NEHA INTERNATIONAL• KARUTURI INTERNATIONAL• HOLETTA ROSES• SUPRA FLORITECH• BLOOMS AND GREENS• ELITE FLOWERS

Resources and Links• Market Report Focus on European and Swedish Market• FLORICULTURE POISED FOR HIGH GROWTH-BY: DR I. SATYA SUNDARAM• Production and Marketing of Cut flower (Rose and Gerbera) in Hosur Taluk.

Dr.S.Sudhagar • Agricultural Produce Processing and Export Development Authority (APEDA)

(1996), • Indian Floriculture Indusry Oppurtunity and Challenges K.Muthukumaran• http://karuturi.com/index.php?option=com_content&task=view&id=99&Itemid=

118• businesstoday.intoday.in/story/smells-like-success/1/152.html• http://www.bloomsandgreens.in/variety.html#• http://www.eliteflowersairdrie.co.uk/index.htm