Interview with Steven van Schilfgaarde
In 2016, Steven van Schilfgaarde joined Royal FloraHolland where he started as CFO and was appointed CEO in 2018. The sector was new to him because he came from the listed company KPN. Nevertheless, he sees many similarities between telecom and floriculture: the macroeconomic and technological developments of this century have a major impact on both sectors. Flevum speaks with Steven van Schilfgaarde about technological developments and how Royal FloraHolland is dealing with them. We also talk about how he maintained Dutch floriculture during the corona crisis.
Optimal pricing in floriculture
In 100 years, Royal FloraHolland has grown into a cooperative with nearly 4000 members in the floriculture sector. The cooperative was originally founded to make pricing transparent. For a long time, growers were played off against each other by traders. This problem could be solved by working with a Dutch auction, the well-known auction clock. Partly due to this initial success, it was able to grow into the current cooperative, of which 85% of Dutch and international growers are members.
By means of the auction clock, the cooperative has ensured optimal pricing for years. The core task of Royal FloraHolland is to connect growers with their customers and to optimize the floriculture chain, and in addition to the auction clock, the digital platform Floriday was launched years ago. The platform brings growers and buyers together digitally and supports the activities of the cooperative for growers and buyers, which are divided into ordering, payment and delivery.
An important certainty that the cooperative offers its growers is that Royal FloraHolland guarantees payment. The certainty and efficiency this offers enables the Netherlands to function as the main hub of floriculture in the world. As a country, we export more than 6 billion euros worth of flowers and plants, and the sector provides employment for 150,000 people. “As a cooperative and as the Netherlands, we are able to offer the world something unique” says van Schilfgaarde.
The crisis outbreak
The outbreak of the corona crisis did not come as a complete surprise to van Schilfgaarde. In the weeks prior to the outbreak, they were already preparing the plans to permanently support the safety and continuity of the processes in all circumstances. Still, the shock was big, because exports, which normally account for 85% of the total turnover in floriculture, were largely eliminated, which forced flowers and plants to be destroyed. This had a major impact on the sector, on growers, traders, florists, on everyone.
The main question was: how long will the crisis last? A new cultivation costs a lot of money and entails great uncertainty if sales are not certain. Van Schilfgaarde indicates at that time that he was very worried whether enough flowers and plates would continue to be produced. “If trade would be possible again after the lockdown, there must be sufficient products available. I then lobbied at the cabinet for an emergency fund for floriculture. ” This emergency fund allowed growers with a loss of turnover of at least 30% to apply for an allowance of 49% of the loss of turnover.
The emergency fund gave the sector a lot of confidence in its own future. “I am happy to say that almost no grower had to stop.” In addition, Royal FloraHolland, in consultation with growers, introduced temporary supply regulations to safeguard business operations. This led to confidence and a recovery in price formation. After also strong lobbying at the European Commission, it was possible to keep a large part of the borders open and to start exporting again. The emergency fund and the open borders provided a solution for many growers, but van Schilfgaarde still had the responsibility to keep the cooperative financially healthy. Cutting back on digitization and other strategic projects was undesirable, so he scaled down on flexible deployment. Yet there was a small ray of hope: “Because many people spent the summer in the Netherlands, flowers and plants were bought in abundance.”
Digitization and internationalization
During the corona crisis, Royal FloraHolland has continued with its digitization strategy. This resulted in the growth of Floriday. This digital platform enables growers to manage all stock, orders and logistics in one place. With this system, growers are in contact with the buyers, who can make their purchases here. The introduction of this platform makes it possible for growers to grow along with the ambitions of Royal FloraHolland.
This also offered opportunities internationally. “The borders that remained largely open, combined with the ability to trade digitally, made it possible to continue to export.” This also gives Royal FloraHolland the option to expand further to other continents in the future. Van Schilfgaarde’s goal as the Netherlands is not only to be the primary hub in floriculture in Europe, but also to grow further in Africa and Asia.
For the future, van Schilfgaarde wants the platform to be future-proof and flexible. Growers and buyers were consulted about the design of Floriday in order to be able to support the service. “This makes Floriday a platform for and by the cooperative.”
At the end of last year it turned out that the platform did not yet offer all the possibilities that growers wanted. Not every grower is equally at home in the use of digital resources, and the working methods in gardens turned out to differ more than members initially thought of each other. Logically, the cooperative has stalled and is currently focusing on optimizing the platform. “We are aiming for less ‘one size fits all’ and offering more functionalities that match the business operations of growers and buyers.” For van Schilfgaarde this is a lesson learned: automation and digitization are important, but the human factor in production must not be forgotten.
For the time being, the floriculture sector can remain healthy, but the market will only really normalize once the events sector has also recovered. “Growers who specialize in events such as weddings, funerals and conventions are still struggling.”
When we ask him what he personally wants to achieve in the next five years, he indicates that in the end it is not about Royal FloraHolland, but about where the 4000 members and their customers will be in five years’ time. “Royal FloraHolland wants to support them as well as possible.”
On september 14, 2021, Steven van Schilfgaarde will be a keynote speaker during a corporate session. If you like to participate in this session, see below for the details.