Interview Synopsis

Dümmen Orange – operational update

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  • Europe

Dümmen Orange, a Dutch flower and product breeder, sells its products around the world. Third Bridge spoke to a former head of one of its competitors to understand more about changing consumer demands, the effects of bacterial infections and rising staffing costs.

Myriad Challenges Face one of the World’s Largest Flower Breeders

One of the general trends in the plant industry is changing consumer demands in bed and balcony. The main demographics here are older generations, who have downsized their gardening efforts, and younger people, who are more likely to live in cities and apartments, meaning they cannot pick up where previous generations left off. Both these factors are driving an increase in demand for indoor plants, succulents and tropical varieties.

However, one major issue for Dümmen Orange, and companies like it, is bacterial infections in plants, otherwise known as phyto events. Dümmen has had “quite a number” of these over the past seven or so years, including Xanthomonas found in begonia in the US in late 2017. Phyto events cause serious problems for Dümmen’s customers, as anything that could potentially be infected needs to be destroyed. Then there’s the missed revenue for the following weeks where nothing can be distributed. In turn, huge costs are involved for Dümmen in terms of reimbursing customers for the clean-up and lost revenue, as well as potentially losing customers – and it can take several years to rebuild trust.

Staffing is another area of concern, making up approximately half of Dümmen’s cost base. Salaries are increasing at a significant rate in some countries; Latin America and Africa are seeing double-digit increases, with the former twofold the rate of the latter. Pay needs to be kept competitive, especially in Africa – the production facilities of Dümmen’s competitors are generally in the same area in order to access international transport links, and there is little loyalty to employers, so people can easily switch.

But, on the positive side, Dümmen Orange acquired De Eeuwige Lente in 2017. De Eeuwige Lente produces calla, which are flowers cut from bulbs and something Dümmen doesn’t produce. The company also supplies kalanchoe, an indoor plant that is drought resistant, and gaining the ability to produce this plant is something our specialist calls “strategically a really good play”. Moreover, Dümmen now has a large percentage of the overall kalanchoe market. 

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