Industry members are working to create the U.S. Floral Board through a proposed Floral Marketing Order, leveraging a proven way for industry to pool its resources and grow demand and value for its products in the United States. The proposed collaboration would support both domestic and imported floral products and be overseen by USDA. If supported by majority vote, the U.S. Floral Board would become the 38th self-funded Agriculture Promotion Group (APG)/ Marketing Order in the United States.
Cut flowers/greens remains as one of the only commodities without the collective power of an industry marketing Order. Without a united voice and campaign, our industry is not collaboratively competing for consumer mindshare and wallet. The 2020 pandemic spotlighted potential new opportunities for cut flowers/greens as demand surged in response to consumers spending more time at home. Industry members are keen to continue and build on that momentum. The proposed U.S. Floral Board can help ensure the industry is working together to grow and maintain demand and appreciation for cut flowers/greens for years to come.
The marketing and promotions will only be overall generic marketing and promotion to create demand and growth in value for cut flowers and greens and redefine them as an everyday occasion to consumers. There will be no country-of-origin references nor specific products being promoted.
Yes. There are so many more ways to market and promote today, such as social and digital marketing, than in the past. $19 million will fund a significant national marketing effort targeted at our core consumers.
It was decided by the drafting committee to focus on cut flowers and cut greens first. In the future changes can be proposed to the board and in a referendum later on.
There were a lot of discussions that small companies that sell under $250,000 per year are companies that either sell to farmer’s markets, very small amounts or import for one time only. These companies would be hard to collect from and be costly for us if USDA had to collect the small amounts.
Customs and Border Protection (CBP) will collect the assessment on the value of the imported flowers and greens at the time of entry. The Domestic Grower will submit payments for their gross sales on a quarterly basis.
The board will determine what marketing and promotions will be done with the funds collected. Expenditures will include:
- The marketing and promotion will be general and generic to get consumers to buy more flowers throughout the year.
- An allocated amount for Domestic Grower campaigns.
- Organizational costs.
- USDA fees.
The value of the flowers would be based on the market cost of those flowers that would be sold to the design business.
Domestic growers, importers and organizations representing domestic producers and/or importers may submit nominations for the initial board members which will be appointed by the Secretary of the USDA from the nominations received. USDA will take recommendations as a part of the decision for the initial board members.
The domestic growers would submit their assessments quarterly. USDA would oversee the collection and would monitor the assessment submissions.
Cut flowers and greens are specialty crops within the USDA, so we are able to create an Order for the industry.
Every webinar participant will be sent a survey and it is important to fill out the survey as the results and comments will be collected. If there are elements that are of concern to a majority of the growers and/or importers then the drafting committee will meet to discuss.
The order states that a majority (50% plus 1) of domestic growers and a majority (50% plus 1) of importers have to agree to pass the Order. This means that neither the domestic growers nor the importers can get the order passed alone, both have to vote in the majority for it to pass.
Since all flower industry organizations or associations are voluntary membership, the Order will set aside 2 to 3% of the total assessments to one or more domestic organization to be used for local, regional, state and/or national program that promote cut flowers and greens. The organization(s) have to submit their specific program requests to the Board and then the Board determines if the program submitted meets the goals and objectives of the Order. This money will need to be used for marketing and promotion of cut flowers and cut greens.
Flowers and greens are not an easy industry to assess because we do not have standards for boxing, shipping or selling. So, the easiest way to assess is on gross sales. The importers will be assessed and pay at the time of entry. This means that the importers will pay on 100% of the flowers that they bring into the U.S. whether the flowers are sold or not. Domestic growers will be paying the assessment on the gross sales of the flowers that they sell.
If we look at the rate of return for other products that are covered by marketing and promotion orders, they have rates of return of $2 to $15 for every dollar that is invested in marketing and promotions.
The Order was worked on together with representatives from the domestic growers and the importers to have elements that were agreed upon by the members of the committee. The committee worked together to find ways to benefit the domestic growers as an important part of the cut flower and greens industry.
There will not be any marketing or promotions targeting consumers toward any specific avenue to buy flowers. The Order is set up to have general and generic marketing and promotions to get consumers to buy flowers throughout the year, not just for holidays. Keeping the momentum of recent consumer pandemic buying habits strong.
Absolutely, once the webinars have introduced the elements of the Order to the voters, the domestic growers and importers, there will be several layers of meetings to discuss with the whole industry. After the webinars, surveys will be sent to the participants and it is important to have everyone respond. Once the results support the Order, there will be town hall meetings with both the domestic growers and importers to discuss the next steps and moving forward and get the whole industry excited about the opportunity of marketing and promoting flowers and greens. The whole industry’s support will be important for this to be successful.
The first step is making the decision to collaborate. When industry members conclude that working together through a marketing Order would help their industry, they take the idea to USDA. Department officials work with industry stakeholders to help develop and implement a new marketing Order. This is where we are now. Next, the industry takes a vote of its industry members to ensure agreement with the program and its funding. Once an Order is approved, USDA reviews and approves program budgets, plans, contracts, expenditures and all consumer and trade communications for compliance to ensure the public has access to accurate, fact-based information about these agricultural groups. USDA conducts comprehensive management reviews with each group and requires independent annual financial audits and periodic econometric reviews to measure ROI to ensure full and complete transparency.
The USDA collects data from the domestic growers and their report has the number of operations and sales for amounts over $100,000, that is why the committee agreed to lower it to that level. We don’t feel that will be any additional reporting than what they currently do. Anyone who sells under the $100,000 level will have to file for an exemption from the assessment.
Once the board is created they will decide on what the target market is, but it should include all flower buyers.
The board will decide on the annual marketing plan.
The agreement is that the general and generic marketing and promotion will not be country of origin specific. The domestic programs can be origin specific.
This program is for both importers and domestic growers as a collaboration for the entire industry’s benefit.
Growers that indicate that they sell less than $100,000 will have to apply for a waiver for the assessment. The domestic growers will be sending in their assessments on a quarterly basis. The amount is overseen by USDA.
The Order specifies that the USDA will oversee the collection of the assessments.
The USDA would determine the sales level based on previous reporting.
700 domestic growers and 500 importers.