Middlemen rob Kenya of flower identity in US

Kenya’s cutflower exporters are losing the identity of the products to established dealers in the West in their search for convenient and lucrative US markets, trade experts say.

This means the country’s actual flower exports to the US could be much higher than that indicated in the US International Trade Commission’s (USITC) yearly official trade data. They do not normally capture trade inflows through the indirect channels that majority of Kenyan growers prefer.

In an earlier interview, American officials acknowledged that while Kenya’s organically grown flowers are among the best quality demand by US consumers, they are usually categorised as European goods.

“To most consumers and dealers in the US, all flowers are Dutch because that is what their labels often say,” said Mr George Aldridge, an economist at the US embassy in Nairobi.

Over 70 per cent of Kenya’s cutflower gets to key markets through the large scale Dutch auctions, a trend that industry players say may take a while to reverse as direct sales to market is expensive and involves a lot of logistical work. Large scale buyers like world’s leading supermarket chains which obtain their stock at the Amsterdam auction also prefer to package and brand the flowers under their own names, totally cutting off their Kenyan connection.

This means that the $250m (Sh20bn) given as the official value of Kenya-US export for 2008 may be an underestimation because flowers are one of the country’s leading and fastest growing segments of export trade

“Direct sales is cumbersome and it takes several years for a flower farm to develop the kind of resources and market acceptance that enables an individual farm to penetrate the American market,” said Mr Peter Szapary, chairman of the Lake Naivasha Growers Group.

“That’s why most of us prefer selling through the auctions. All a grower needs to do is pack flowers in the right boxes, address them to Holland and leave the rest to the dealers,” he added.

Mrs Jane Ngige, the Kenya Flower Council CEO, says most flower growers have limited knowledge of the American market and rely on the infrastructure and market links of the established flower auctions to reach consumers in Europe and US.

Lack of direct flights between Kenya and US as well intense competition from Southern American horticultural exporters like Equador are also some of the hurdles that industry players face.

“Furthermore, US is a “volumes” market whose orders can only be met either by all the flower growers in Kenya and East African Community pooling their produce or through the Dutch auctions which usually receive consignments from all over the world,” said Mrs Ngige.

But she acknowledges that most farms are now getting direct online orders from US buyers.

In Kenya, large scale flower producers like Oserian and James Finlay are already exporting amost of their flowers directly to the markets.

With over 100 million stems of Fair-trade certified cut flowers grown each year, Finlay is one of the largest growers, having upped its stakes in the direct export market following its 2007 acquisition of the Flamingo Holdings.

The 250 year old Europe-incorporated company also sources and distributes cut flowers from other African countries to markets in Europe and the US through its wholly-owned subsidiary Omniflora.