Floriculture 2008 1. INTRODUCTION Page 2

• Scope of the Report 2. THE CANADIAN MARKET Page 3

• • •

Consumption Product Sector Overview Imports

3. TRADE PRACTICES Page 13

• • • • • •

Competition The Buyer Price Quality Packaging and Transportation Labelling

4. DISTRIBUTION Page 20 5. IMPORT REGULATIONS Page 23

• •

Tariffs Inspection

6. TIPS FOR EXPORTERS Page 26 Annex

1. Sources of Information 2. Trade Shows 3. Publications 4. Useful Internet Sites

This report is distributed subject to the condition that it shall not, by way of trade or otherwise, be lent, sold, hired out, or otherwise circulated without TFO Canada’s consent, in any form of binding or cover

other than that in which it is published.

All information provided in this document is based on the best available at the time of preparation and is offered without responsibility on the part of TFO Canada. The reader is advised to check with TFO Canada for updates and

clarification through www.tfocanada.ca/docs.php or by writing to the address provided in the Annex.

This report has been produced with funding from the Canadian International Development Agency.

Floriculture 2008

1

Introduction

TFO Canada offers a series of product-specific market reports to exporters in those client countries listed by the Canadian International Development Agency: (www.acdi-cida.gc.ca/CIDAWEB/acdicida.nsf/En/NIC-55105238-KFX). The reports are available through TFO Canada’s website (www.tfocanada.ca/docs.php) or on request by writing to TFO Canada. They are also distributed through export promotion organizations and Canadian embassies in the client countries as well as through client country embassies accredited to Canada.

If you have at least one year of export experience, you may be eligible to receive TFO Canada’s free promotion of your product offer to Canadian importers via the monthly Import Info E-Newsletter and online searchable database. If you are not yet registered with TFO Canada, you may go to www.tfocanada.ca/register.php and complete Steps 1 and 2 (Step 3 is optional but recommended). If you are already registered, please sign in, click on Exporter Profile, and review the details you have provided. Note that product information is very important.

The market reports are intended to provide the exporter with background information on the Canadian market for a product; advice on how to go about finding a Canadian buyer; and suggestions on what to do once a buyer is found. The reports offer exporters enough information to pursue the Canadian market on their own and to seek further details from suggested sources through websites, electronic mail, fax, mail or telephone. These reports are intended for the experienced exporter who is serious about trying to enter the Canadian market. Canada is not the market to test your first export experience; a history of exporting to a market closer to home is invaluable before attempting this one. Show the potential buyer that you have done your homework and are serious about a long-term relationship. Research, planning and commitment are essential in establishing a good reputation in trade with this country.

SCOPE OF THE REPORT This report covers the following groups classified under the Harmonized System (H.S.):

Exporters should note that the Canada Border Services Agency (CBSA) requires individual imports to be identified by 10 digit H.S. codes; importers could be fined if these are not provided. These codes are available from the CBSA website (www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2008/01-99/01-01-eng.html) or from your buyer.

Source: Industry Canada, Trade Data Online, 2008

H.S. Code Description Plants and Cuttings 060210 un-rooted cuttings and slips 060220 edible fruit or nut trees, shrubs and bushes (grafted or not) 060230 rhododendrons and azaleas (grafted or not) 060240 roses (grafted or not) 060290 mushroom spawn and other live plants (including roots, cuttings and slips) Fresh Cut Flowers for bouquets/ornamental purposes 060311 roses and rose buds 060312 carnations and buds 060313 orchids and buds 060314 chrysanthemums and buds 060319 cut flowers and flower buds 060390 other cut flowers and flower buds Fillers for bouquets/ornamental purposes 060410 mosses and lichens 060491 Fresh foliage, branches and other parts of plants 060499 Other foliage, branches and other parts of plants

2

Floriculture 2008

2

The Canadian Market

According to the Ontario Ministry of Agriculture, Food and Rural Affairs (www.omafra.gov.on.ca/english/crops/facts/greenflor.htm#market), the floriculture industry sells an agreeable lifestyle: any association with flowers, including gardening, should be focused on “beauty, enjoyment and a pleasurable experience.” The typical Canadian family leads a busy life style with little free time and, because of technological advances (cell phones, e-mail, microwaves), expect instant gratification. Hence, growers must produce and market flower and plant products tailor-made to meet that expectation. These efforts have been relatively successful as sales of both domestic and imported floriculture products increased between 2005 and 2007: sales of domestically grown nursery products increased from $591 million to $629 million, while the value of imported products rose from $308 million to $323 million over the same period.

In 2007, Canada’s population was estimated at 33.1 million inhabitants with immigration accounting not only for about two-thirds of the population growth, but also for Canada’s population growing more (5.4%) than any other G8 country over the past five years. Nearly 25 million people, or more than four-fifths of Canadians, live in urban areas; of these, seven have more than 1 million people: Toronto, Montréal, Vancouver, Ottawa-Gatineau, Calgary, Edmonton, and Saskatchewan. Together, these provinces account for more than 45% of the country’s population. Canada’s two official languages are English and French. More information on Canada’s population is available at: www12.statcan.ca/english/census06/analysis/popdwell/highlights.cfm.

However, Canadian growers have had to be innovative to remain competitive when faced with challenges including cheaper fresh cut flowers and other plant products being imported from other countries; the strength of the Canadian currency making Canadian exports more expensive; and higher costs of energy and labour in this country. Some of the strategies they have switched to in order to address these challenges include:

growing varieties that either have a short nursery-to-table lifespan or grow particularly well in this climate; joining the unfolding marketing trend to ‘buy organic’ or ‘buy local’ which, among other strategies, promotes the benefits of buying locally grown products as being safer for the environment since they rely on less transportation and therefore less energy consumption.

While producers of flowers and plants still contributed two thirds of total greenhouse sales in Canada in 2007, exporters should note that for the first time in fourteen years, Statistics Canada estimated that Canadian growers are turning over more cultivable land to the production of vegetables (10.7 million square metres) instead of to flowers and plants (10.3 million square metres). In addition, floriculture production by Canadian farmers is down by 8.1% in the past five years. Should these trends continue, the potential for increased floriculture imports could be significant.

3

Floriculture 2008 CONSUMPTION In 2007, nearly $3.5 billion worth of ornamental flowers and plants were sold in Canada, mainly through mass market chain stores ($368 million, up from $307 in 2006), domestic wholesalers ($338, up from $333), and direct sales to the public ($251, down from $264 in 2006). This total was $21 million more than in the previous year as the charts below indicate.

Ornamental Flowers and Plant Sales in Canada, 2006-2007 ($ millions)

0 50 100 150 200 250 300 350 400

Mass Market Chain Stores

Domestic Wholesalers

Direct Sales to the Public

Retail Florists

Exported

Other Channels

Other Greenhouses

Government

2006 2007 Source: Statistics Canada, Catalogue 22-202-XIB, 2008

Total Sales 2006-2007 ($ millions)

3,464

3,485

3,450

3,460

3,470

3,480

3,490

2006 2007

Canadian growers produced $1.5 billion worth of these sales, an increase of 1.5% in the same period, with Ontario growers accounting for more than half ($0.8 billion) of that amount. As the following chart shows, sales of domestically grown ornamental flowers and plants were highest in the provinces of Ontario, British Columbia and Québec.

G re e n h o u se O rn ame n ta l F lo w e r an d P lan t S ale s b y P ro v in ce , 2007

($ millio n s)

774

328

174

833 8 3 2 21 19 6 2

0

100

200

300

400

500

600

700

800

900

Ontario

British C

olumb ia

Quebec

Alberta

New Bru

nswick

Manito

ba

Saskatch

ewan

Nova S

cotia

Newfound land and L

abrado

Prince E

dward Is

land

S ourc e : S ta t is t ic s C anad a , C a ta log ue 2 2 -20 2-XIB , 20 08

T o ta l S a le s 20 06-2 007 ($ m )

1 ,4 5 8

1 ,4 7 8

1 , 4 4 5

1 , 4 5 0

1 , 4 5 5

1 , 4 6 0

1 , 4 6 5

1 , 4 7 0

1 , 4 7 5

1 , 4 8 0

2 0 0 6 2 0 0 7

4

Floriculture 2008 Trends: Computers and automated technology play a vital role in maintaining the competitiveness of the industry. Most year-round operations use computerized environmental controls. However, automation is also being used in the seeding and transplanting of bedding plants, in pot-filling, in the irrigation, harvesting and grading of cut flowers, and in pesticide applications. The use of robotics for placement of pots on growing trays is also becoming more prevalent. Several factors contribute to the growing popularity of flowers and plants including health benefits, social acceptability, versatility, and ease of online orders. A report published by Brant Florist1 notes that people are beginning to learn about the health benefits that flowers offer. Not only do they liven up the atmosphere of a room, but their beauty and scent also help to reduce stress; consumer spending on flowers could be mirroring this realization. In addition, a large number of people are changing their consumer spending habits. Traditional gifts like ties and socks are no longer very popular and healthier options to gifts of candy or chocolate are being sought out. Consumer spending mirrors this knowledge as more people opt to use flowers as a successful alternative. Flowers are also becoming more acceptable as gifts to men; this of course, not only expands the target market, but opens creative options for flower choices and arrangements. Many floral retailers are able to put their stores online, providing customers with agifts. The internet saves time by eliminating trips to the physical shop without service. The ability to take advantage of same-day local and domestic deliverspending as people realize they can overcome last-minute rushes to the store foNext-day international delivery opens up a new realm of possibility for sendinCanada or other countries. Some other trends to notice in floriculture include:

The growing popularity of container gardening, particularly as older Canhomes or apartments and move away from traditional gardening to smaller for instance. The Fair Trade movement in flowers is not as advanced in Canada as iEurope. A study being conducted in California into radio frequency identification (Rhas shown some promising results and may extend the vase life of cut flowthe size of a CD case, and are intended to follow one lot of flowers destination. Information stored in the tag includes the product name, groreceiver, time, and temperature measurements and more. The tag is able remaining in a lot of flowers based on the time and temperature measurealong the distribution chain and the respiration rates of the flowers that is pThis allows producers to make guarantees on the vase life of their product. access the information in the tag, and can be used by simply pointing the reathe flowers and the tag. This could be applied on an assembly line, or throureader. The tags can also be programmed to allow limited access to informuser. More information is available at: www.flowerscanadagrowers.com/issues/index.cfm?fuseaction=drillDown&ite

An interesting perspective on colour trends for the retail floral industry is presente 1 Consumer Spending on the Rise, http://feelingsandflowers.com/2008/04/30/consumer-s

5

Main reasons to purchase flowers (%)

Funerals 20 Holidays 19 Get Well 10 Birthdays 9 Birth 9 Weddings 7 Religious Day 6 Business 5 Thanks 3 Congratulations 3 No special reason 7 Others 2

new method of ordering sacrificing any quality of ies influences consumer r Christmas or birthdays. g gifts to loved ones in

adians move to smaller containers on a balcony,

n the United States and

FID) tags for cut flowers ers. The tags are about from production to end wer, transportation firm, to calculate the vase life ments taken at intervals rogrammed into the tag. Radio frequency readers der at the box containing gh the use of a portable ation, depending on the

mID=131&categoryID=1.

d on the following page.

pending-on-the-rise, 2008

Floriculture 2008

Source: Florist Supply Ltd., The Source, May 2008. p. 4

6

Floriculture 2008 PRODUCT SECTOR OVERVIEW Cut Flowers: Canada’s production of cut flowers over the past three years is outlined in Table 2.1. Table 2.1: Greenhouse Cut Flower Production in Canada, 2005-2007 (billions of stems) 2005 2006 2007 Tulips 43 48 57 Gerbera 29 49 46 Chrysanthemums - sprays 26 27 24 Snapdragons 17 27 21 Other 23 23 21 Alstroemeria 18 18 18 Lillies 18 17 16 Roses - excluding sweetheart types 22 14 12 Roses - sweetheart 12 17 11 Iris 8 8 6 Freesia 6 6 n/a Chrysanthemums - standard 2 2 n/a Daffodils 3 4 2 Lisianthus 1 1 1

Source: Statistics Canada, Greenhouse, Sod and Nursery Industries, Catalogue 22-202-XIB, 2008 An important characteristic of the industry is global competitiveness. Fast, efficient transportation systems tie together floricultural production on a world-wide basis. This global network can be shown in a supermarket cash-and-carry floral bouquet which could be made of miniature spray carnations from Israel, pompom spray mums from Colombia, boxwood from Oregon, and statice from California. Table 2.2 outlines the most significant days for flower purchases in Canada, along with the associated colours for the occasion. Table 2.2: Flower Usage by Season

Holiday Season Date Associated Colours New Year’s Day January 1 White, Gold, Silver Valentine’s Day February 14 Red Mother’s Day May Pink, Purple, Red, Yellow Victoria Day Monday before May 24 Various Colours St. John the Baptist Day June 24 Various Colours Canada Day July 1 Red and White Labour Day First Monday in September Red and White Thanksgiving Second Monday in October Red, Brown, Yellow, Orange, Natural Remembrance Day November 11 Red Boxing Day December 26 Red, Green, White Easter April White, Yellow, Pink, Purple Christmas Day December 25 Red, White, Pink

Challenges Facing the Domestic Industry: According to an Ontario government report (www.omafra.gov.on.ca/english/crops/facts/greenflor.htm), the Canadian domestic cut flower sector is currently in crisis due to several factors:

1) Pay-As-You-Go: Given skyrocketing input costs, no increases in wholesale prices, and the perishable nature of the product, large mass market chains have introduced a ‘pay-by-scan’ sales plan for their suppliers. This is forcing many domestic growers and wholesale distributors to re-evaluate their business plans and product lines because growers are being paid only on what is sold. As well, many home improvement chains are insisting that the “lead vendor” take on much

7

Floriculture 2008

of the responsibility for maintaining plant material in the individual garden centres in an attempt to increase the profitability and sell-through of bedding and other flowering potted plant material.

2) Cheaper Imports: It has become extremely difficult to compete with cheaper imported "bread and butter" cut flowers from South America and Africa for use in mass market commercial mixed flower bouquets. Since 2005, one leading domestic retail chain has been accessing pre-made supermarket mixed bouquets directly from South America, eliminating Canadian rose and chrysanthemum growers and wholesale bouquet makers from the marketplace. As a result, the market price for domestic product has dropped dramatically. Domestic cut hybrid tea rose production has been largely replaced by alternate crops like gerbera and snapdragons, leading to another fall in prices because of increased production as growers switch to these crops. It is thus likely that a number of Canadian growers will be forced to close within the next few years. A few rose growers are attempting to compete by growing only the latest novelty roses that other regions generally do not produce until the demand becomes sufficiently large. The inability to access the latest cultivars of cut chrysanthemum developed in Europe is another challenge for Canadian chrysanthemum growers.

3) Crop Protection: The availability of new, effective, ‘reduced risk’ pest control products like the ones available to competitors in the U.S. and elsewhere continues to be a major issue for Canadian growers.

4) Exchange Rates: Domestic growers and wholesale distributors are negatively impacted by a rise in the value of the Canadian dollar that began in 2005.

5) Border Issues: Delays at the U.S. border due to increased security since 9/11 and numerous shipments being delayed for 6 - 12 hours or being turned back due to what the industry perceives as non-tariff pest issues has been costly. Reduced shelf life, lower quality of the product upon reaching its destination and most importantly, disgruntled retail customers who rely on ‘just-in-time’ delivery to their local stores are the costs of these border issues.

6) Country of Origin Labelling: Because Canada does not inspect cut flowers entering the country, it is difficult to identify the country of origin in case of problems with floral arrangements that contain both imported and domestically-produced cut flowers.

7) Quarantine: Pests and diseases including Japanese beetle, Swede midge, Sudden Oak Death, and Chrysanthemum White Rust have caused problems and cost the industry in lost sales.

Potted Plants: Canadian production of potted plants over the past three years is outlined in Table 2.3. Geraniums, foliage, and chrysanthemums are the singular most popular varieties grown here; hanging baskets and mixed potted containers are also produced. Apart from an increase in production of begonias and hanging pots for spring, the production of the majority of other potted plants remained static or declined over the three year period, facing similar challenges to cut flowers as mentioned above. Table 2.3: Greenhouse Potted Plant Production in Canada, 2005-2007 (billions of pots)

2005 2006 2007 Other 79 83 81 Geraniums 25 25 25 Tropical, foliage and green plants 19 22 n/a Chrysanthemums 16 17 15 African Violet 12 9 12 Miniature Roses 11 13 11 Hanging pots (spring) 9 10 11 Poinsettias 9 8 8 Begonias 5 6 7 Impatiens 6 5 5 Lilies 5 5 5 Petunias 4 5 5 Gerbera 4 4 4 Azaleas 2 2 2 Hanging pots (foliage) 3 2 2

Source: Statistics Canada, Greenhouse, Sod and Nursery Industries, Catalogue 22-202-XIB, 2008

8

Floriculture 2008 While many potted plant producers focus primarily on holiday crops such as poinsettias, Easter lilies or potted mums, there has been a movement over to production of cuttings for chrysanthemums and ornamental bedding plants, mainly as a result of lower prices offered by imports for other propagative materials (Table 2.4). Table 2.4: Number of Cuttings, Other Propagating Materials, and Ornamental Bedding Plants Produced in Greenhouses in Canada, 2005-2007 (billions)

2005 2006 2007 Ornamental Bedding Plants 570 691 706 Seedlings and Other 761 708 580 Geraniums 22 19 16 Chrysanthemums 8 10 13 Impatiens 6 4 6 Poinsettias 8 7 5

Source: Statistics Canada, Greenhouse, Sod and Nursery Industries, Catalogue 22-202-XIB, 2008 IMPORTS Trade statistics reinforce previous statements in this report about the opportunities available to importers. In the four year period between 2003 and 2007, Canada’s trade balance in floriculture went from $162 million to $1.5 million, with imports rising nearly 10% over the period to $329 million in 2007. While imports declined by 5.8% in the first quarter of 2008, from $99.5 million in January-March 2007 to $93.7 million in January-March 2008, there was an even steeper decline in exports from $65 million to $54 million over the same period.

Canadian buyers have stated that deterrents to importing from specific countries include inconsistent product quality, poor packaging and unacceptable hidden costs in waybills.

Canada’s Trade Balance in Floriculture, 2003-2007

Source: Industry Canada, Trade Data Online, 2008

Total Exports

Imports by Country: As the following chart shows, the United States ($169.5 million), Colombia ($62.5 million) and Ecuador ($30.2 million) were the main suppliers to this market in 2007.

9

Floriculture 2008

Floriculture Imports by Top Ten Source Countries, 2007 ($ '000)

- 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000

United States

Colombia

Ecuador

Netherlands

Costa Rica

Mexico

France

Israel

Guatemala

New Zealand

Source: Industry Canada, Trade Data Online, 2008

TFO Canada client countries were also important suppliers in that year, as shown below.

Floriculture Imports (valued at more than $10,000) sourced from TFO Canada Client Countries, 2007

($ '000)

62,528

30,148

8,816

5,257

2,300

1,962

1,565

1,050

966

835

781

572

496

444

420

140

127

113

61

60

42

28

24

14

14

- 10,000 20,000 30,000 40,000 50,000 60,000 70,000

Colombia

Ecuador

Costa Rica

Mexico

Guatemala

China

India

Thailand

Brazil

Indonesia

Ethiopia

Peru

Philippines

Kenya

Chile

Malaysia

Uganda

Zimbabwe

Vietnam

Barbados

Dominican Republic

Tanzania

Sri Lanka

Trinidad and Tobago

El Salvador

Source: Industry Canada, Trade Data Online, 2008

10

Floriculture 2008 Imports by Category: Of the $329 million worth of floriculture products imported into Canada in 2007, $172 million was in plants and cuttings; $129 million in fresh cut flowers for bouquets/ornamental purposes; and $28 million in fillers for bouquets/ornamental purposes. Plants and Cuttings: The $172 million worth of imported plants and cuttings consisted of:

mushroom spawn and other live plants (4% increase to $120 million); un-rooted cuttings and slips (5% increase to $26 million); edible fruit and nut trees, shrubs and bushes (3% increase to $14 million); rhododendrons and azaleas (12% decrease to $7 million); and roses (12% increase to $5 million).

120

2614 7 5

0

20

40

60

80

100

120

mushroom spawn andother live plants

un-rooted cuttings andslips

edible fruit or nut trees,shrubs and bushes

rhododendrons andazaleas

roses

Imports of Plants and Cuttings, 2007 ($ millions)

Source: Industry Canada, Trade Data Online, 2008

45

3

-12

12

-15

-10

-5

0

5

10

15

mushroom spawn andother live plants

un-rooted cuttings andslips

edible fruit or nut trees,shrubs and bushes

rhododendrons andazaleas

roses

Change in Imports of Plants and Cuttings between 2006 and 2007 (%)

Source: Industry Canada, Trade Data Online, 2008

11

Floriculture 2008 Fresh Cut Flowers: As the following chart shows, fresh cut flower imports rose by a significant 16% between 2006 and 2007 to $129 million2. Nearly $37 million worth of roses and rose buds were imported, along with $15 million worth of carnations and buds, $6 million of chrysanthemums and buds, and $2 million of orchids and buds.

55

37

159

62

0

10

20

30

40

50

60

cut flowers andflower buds

roses and rosebuds

carnations andbuds

other cut flowersand flower buds

chrysanthemumsand buds

orchids and buds

Imports of Fresh Cut Flowers, 2007 ($ millions)

Source: Industry Canada, Industry Canada Online, 2008 Fillers for Bouquets: As Table 2.5 shows, 71.4% ($20 million) of the fillers imported for bouquets and ornamental purposes consisted of fresh foliage, branches and other parts of plants. While imports of other foliage rose dramatically by 83% to $7 million, imports of mosses and lichens declined by 0.4% to $0.9 million.

Source: Industry Canada, Trade Data Online, 2008

Table 2.5: Imports of Fillers for Bouquets and Ornamental Purposes, 2007 ($ millions) H.S. Code

Description Value ($ millions)

% Change 2006-2007

060491 fresh foliage, branches and other parts of plants 20 1 060499 other foliage, branches and other parts of plants 7 83 060410 mosses and lichens 0.9 -0.4 Sub-total bouquet fillers 28 13

2 In 2007, the Fresh Cut Flowers category was divided by Statistics Canada into six separate categories as outlined in the chart. Prior to that, these were included in the single H.S. Code 060310.

12

Floriculture 2008

3

Trade Practices

COMPETITION Consistency in quality and

delivery of the product with ordered specifications are crucial to maintaining Canadian orders. Continuity of supply is a key factor in the importer’s, wholesaler’s and retailer’s commitment to marketing imported goods in Canada. Sporadic shipments will damage the exporter’s reputation and chance of success in Canada.

Canada ranks among those countries with the highest imports per capita. Exporters from all over the world are present here, competing fiercely and consistently for a part of this lucrative market. Because of this heavy supply situation, Canada is not short of consumer products. To make inroads here, an exporter must either offer a completely new product or be able to push aside an existing supplier with a more attractive offer in terms of quality, service, price or labelling. The key to successful exploitation of the Canadian market is the development of an organized marketing strategy. The following require priority attention:

rapid turnaround in sample production; same-day reply (by e-mail, fax or telephone) to every communication; on-time deliveries, with any delays agreed to in advance with your buyer; delivery of product which corresponds precisely with agreed-to specifications or samples, with any changes agreed to in advance with your buyer; continuity of supply;

maintenance of high quality at a competitive price; appropriate packaging material for overseas shipments; adequate handling and storage facilities; promotion, especially of new products (include names of current or past clients and/or their countries); and knowledge of payment terms.

In addition, you should ensure that your representative in contact with the buyer speaks and writes clear and fluent English or French, depending on the preference of the buyer. THE BUYER

Finding a Buyer: Entering a new market can be daunting, but with a well-defined marketing plan, the rewards will be well worth the effort. For most buyers, exporters have one chance to make a good first impression. Use this chance to show what you are selling. Initial information about your company should include photographs, prices, specifications and quality certifications of your latest products. You can also include photos of your production facilities. E-mail is an essential tool for communication with Canadian buyers, so enclose attachments of this information to allow them to immediately assess whether they are interested in pursuing an arrangement with you. If you do not show in such an immediate and concrete fashion what you are capable of, the buyer loses interest. Finding a buyer requires perseverance and a serious commitment of time, effort and some cost. TFO Canada encourages exporters to use any of the following tools to help in these efforts: Participate in any trade shows in your own country or surrounding region, since buyers frequently

attend these. In addition, international shows can be an invaluable source of market intelligence. If you cannot attend an international show, contact the show organizers to obtain the catalogue of exhibitors, many of whom will be importers. When attending international trade shows, be sensitive to exhibitors, who will be very busy trying to sell their own product. Introduce yourself, leave a business

13

Floriculture 2008

card and brochure with product information, and ask if you can call them to arrange an appointment within the timeframe of your visit to discuss what you can do. Do not try to sell on the spot at these shows; you will likely not succeed.

Consult with the trade representatives at your Embassy in Canada. They can provide help in identifying potential Canadian importers, or may be able to direct you to an independent researcher who could provide you with a detailed listing of interested Canadian buyers. The more publicity you generate for your company and product, the more interest you will create in potential buyers. Take advantage of a buyer’s personal visit to your country. The Canadian Embassy in your country or your national export promotion office may have advance notification of such visits. Let them know that you would like to meet with any visiting buyers in your product line and if possible, contact the buyer directly to arrange a meeting. Obtain a list of Canadian buyers who have traded with your country and contact them to offer your products and services. These lists may be available from your local Chamber of Commerce or foreign trade ministry. Ensure that you are listed with a good search engine on the internet and that you have an informative website with e-mail links for easy contact. Contact any bi-national Chamber of Commerce existing between your country and Canada. Use trading companies and agents (regional, national or in Canada). Seek the assistance of your bank or freight forwarding company.

Exporters can also identify Canadian buyers who are listed in:

Various internet sites by sector; Canadian trade associations or the Canadian Association of Importers and Exporters; Directories that can be purchased, e.g., Retail Chains Directory. This is expensive, but can be consulted without charge at Canadian public libraries while on a visit here.

Some important Canadian trade shows that floriculture importers and distributors from all across Canada attend include the Flowers Canada Retail Convention held in October 2008 in Ottawa

(http://flowerscanada.org/content/en/nb080707.htm#ART7); Canwest Hort Show (www.canwesthortshow.com/show_history.htm), which is held every September in Vancouver to showcase international, national and local suppliers of floriculture products, and Garden Expo, held every October in Toronto (www.gardenexpo.ca). Another important show is Canada Blooms, held every spring in Toronto (www.canadablooms.com). The most recent Canada Blooms show highlighted ‘buy local’ products from Ontario.

TRADE SHOWS Canadian importers and a number of retail buyers usually visit foreign markets and their suppliers once a year. They normally organize such trips to coincide with the most important foreign trade shows where they can explore possibilities for imports, as well as assess industry trends. Details on these trade shows may be obtained from TFO Canada. Documentation to assist in evaluating the costs and benefits of your participation in trade shows is available from TFO Canada. It is also advisable to check with your agent, buyer or Embassy's commercial counsellor before deciding on such involvement. Please note that TFO Canada does not provide letters of invitation to assist exporters with obtaining travel/entry visas. These must come from the buyer directly, or from proof of registration at a trade show.

Dealing with a Buyer: Many importers or their agents may visit the facilities of the supplier to assess the supplier’s capabilities, assure themselves of the quality of production/growing facilities and to build a solid trading relationship. Suppliers should maintain good communications with their buyer throughout the entire sales and after-sales process. Efficient handling of export procedures is an important factor in successful business. In addition to offering value, buyers assess suppliers in terms of their reliability, experience, competence, a proven ability to source, and a determined commitment to a long-term business relationship. Canadian importers have reported that a major problem in dealing with new suppliers is that they are often asked to purchase unrealistically large minimum quantities for a market the size of Canada’s. Exporters must bear in mind that the Canadian market is about 10% the size of the U.S. market and therefore must be prepared to fulfill small orders.

14

Floriculture 2008 At first contact with an importer in Canada, the exporter will likely be asked for samples. These samples should be accompanied by a certificate of analysis issued by a recognized authority in the country of origin. Shipments must be accompanied by an Import Declaration form and any related fees for verification of these forms. In Canada they will be assessed for compliance with phytosanitary regulations and quality standards. The Canadian buyer usually performs an in-house company inspection of the product to determine if it complies with stated specifications, for the company’s own satisfaction. If the samples are acceptable, the importer may place a trial order with the supplier. If some adjustments are required, the importer will request new samples based on the instructions for needed changes. A trial consignment which is consistent with the accepted samples and which is delivered according to an agreed-to delivery schedule may then be sent to Canada. The importer generally advises the supplier of the sizes and varieties of a product that should sell best in Canada and on the condition that the product should be in upon arrival in this country. The importer uses samples to assess the interest of wholesalers and retailers in carrying the product.

Exporters should bear in mind potential

Ce IisLCbapibs Dbc Aeiw

Buyers may use checklists when considering floriculture purchases:Evaluation Criteria for Cut Flowers Evaluation Criteria for Potted Plants

overall attractiveness as a cut flower; stem length; flower and leaf shape; uniformity of individual flowers; flower and foliage colour; colour range; potential use - centerpiece or filler? shipping life - need for preservatives, temperature requirements, ethylene tolerance; vase life; hardiness; pest and disease tolerance; uniqueness - is it similar to other, more common cut flowers?

overall attractiveness as a potted plant; form and compactness of foliage and flowers (a rule of thumb is a 1-1.5x plant: pot size ratio); flower and leaf shape; flower and foliage colour and colour range; shipping life - transport, temperature requirements, ethylene tolerance; useful indoor life span (minimum 2 weeks); pest and disease tolerance; uniqueness - is it similar to other, more common potted plants? potential use - target market; novelty or standard use? Can it be replanted into the garden?

competition from suppliers in the United States and Mexico. Canadian importers are aware of the advantages of purchasing from these suppliers — lower transportation costs, shorter delivery and lead times and relatively simpler payment mechanisms. These countries are also quite familiar with the

anadian market and business norms. Exporters should consider these facts when setting prices and valuating business practices.

mport terms vary with individual importers. In general, quotations should be made f.o.b. foreign port, ncluding packaging, but may be requested c.i.f. to a named port. Payment for imports from traditional uppliers is generally cash against documents. The majority of Canadian importers will not work with etters of Credit, but may select other credit formats and credit terms that would suit both parties. ontracts often include a clause stating that the goods must be inspected and signed off in-country by the uyer or agent prior to shipping. The importer usually requests a guarantee to be included in the contract gainst hidden quality defects. The full invoiced amount is not paid until inspection of the goods has taken lace either in the country of origin or at the destination, by the buyers themselves, their agents or an

ndependent authority. When the business relationship is well established, an open account method may e used to save bank charges for both parties. The services of an export agent may be useful in handling uch intricacies for the first few operations.

elivery time, including delivery to the importer’s warehouse, is agreed-to between the parties and must e respected. Buyers generally utilize the vastly improved international transportation and customs learance procedures in Canada which facilitate ‘just-in-time-delivery’.

barrier to increased consumption is the Canadian consumer’s lack of familiarity with some of the more xotic floriculture items. Exporters should, therefore, consider providing Canadian customers with

nformation on the product. This can be an expensive market development process which is only arranted if the sales will be continuous. Once the exported product has established a reputation for high

15

Floriculture 2008 quality, a brand name and trademark could be adopted. Such identification is important so that customers can easily recognize the product and know that it represents good value. PRICE According to a recent report by Florists Supply Ltd.,3 China has traditionally held a competitive edge in the floriculture industry over other countries due to low cost production. Recently, China’s production costs have been increasing; from 2004 to 2007 both wages and plastics used by flower factories have increased 100% while other raw materials, such as polyester, wire and cotton have increased 30% to 40% over the same period. In addition, China’s currency has become stronger in relation to the U.S. dollar, and the increasing cost of oil adds to freight charges. For these reasons, factory quotes, once good for a period of months, now rarely can be counted on beyond 30 days without increasing on average by 20-30%. Chinese factories are also asking for larger minimums in order to start production of an item: in permanent botanicals especially, Canadian florists have seen minimums double. As such, Canadian importers will have to carry a larger inventory of certain items, possibly reducing the range of items they can carry; this will put pressure particularly on smaller buyers who have traditionally imported directly in order to stay competitive.

The average landed cost of an imported product includes markups which cover import duties; federal/provincial sales taxes; brokerage/insurance/freight fees; advertising, product development, testing; transportation; overheads; and other carrying costs.

Other countries may view this as an opportunity to emerge as low cost suppliers to this market, particularly supplying those buyers who take inventory risk and pre-purchase their orders. One country, Vietnam, has already started to capitalize on lower costs and is becoming a known supplier of zinc planters and ceramics to Canada. Since the Canadian market is relatively small, Canadian importers may attempt to obtain exclusive importing rights for the specific items they agree to import. For large production ranges, it is customary to allow some price discount (5% to 10%). Once again, delivery time, including delivery to the importer’s warehouse, is agreed-to between the parties (usually 2 to 3 months), and must be adhered to. The exporter may also be requested to provide rebates as a result of poor product quality, damage before or

during shipping, or late delivery. QUALITY Canada has one of the most developed agricultural infrastructures in the world, resulting in high standards demanded by government and expected by consumers. Floriculture products must be of high quality and durable in order to arrive to market in good condition. Exporters should pay particular attention to requirements for quality and size of the product; packaging in prescribed containers, including types and

sizes, fill levels, composition and strength of packing media quality; and correct labelling.

Canadian buyers expect the supplier to eliminate extraneous matter and contamination before products are shipped. Buyers support those suppliers best able to meet their cleanliness and quality demands at competitive prices. These buyers are even sourcing from non-traditional countries of origin in order to obtain cleaner products.

New Initiatives in Quality Control: Flowers Canada, the national floriculture association for growers, distributors and retailers, has been working with U.S. authorities to try to ensure that mixed bouquets made from flowers and foliage from several countries of origin would be free from common plant health risks when crossing the border between the two countries. Termed the “North America Perimeter Approach (NAPA),” the program aims to address common plant health risks associated with the importation of regulated commodities from third countries. Since many pest threats from third countries are common to both Canada and the U.S., entry into one generally means spread into the other. Given the integration of industries between both countries, there are mutual benefits of working together on solutions to these risks. The NAPA initiative may result in the adoption of similar or equivalent phytosanitary systems in how plant articles are regulated from third country sources. Similar systems may allow Canada to accept material directly through the U.S. system and vice versa, facilitating further trade

3 Source: Florist Supply Ltd., The Source, May 2008. p. 3

16

Floriculture 2008 between the two countries. As well, the floriculture industry in Canada is developing a “Best Practices” program that will benefit players in the cut flowers sector in terms of:

safeguarding the marketplace from the risk of foreign pests and diseases; assuring customers that suppliers have followed standard procedures and management practices; product traceability and identity; formalizing the approach to receiving, inspecting, storing and shipping of cut flowers; increasing the potential for exports as inspection and border crossings may be expedited and trade disruptions minimized; and increasing the credibility of the Canadian system which in turn could be used for marketing purposes.

More information is available at: www.flowerscanadagrowers.com/issues/index.cfm?fuseaction=drillDown&itemID=26&categoryID=3. PACKAGING AND TRANSPORTATION A Canadian Food Inspection Agency (CFIA) Movement Certificate is generally required when plant material is being shipped between different regulatory categories. More information is available through Flowers Canada at: www.flowerscanadagrowers.com/issues/index.cfm?fuseaction=drillDown&itemID=241&categoryID=2 Given the limited lifespan of these items, floriculture products are mostly shipped in by aircraft. Small shipments are usually given to consolidators who build container loads (LCL). Requirements for customs documentation (invoice, certificate of origin, fumigation record, import declaration form, etc.) are detailed by the Canada Border Services Agency. Since the rate of duty depends on the origin of the product, the certificate of origin is crucial for both exporter and importer. Outer Packaging: Floriculture products are packed in both air-tight and non-air-tight containers. Polyethylene packages are most often used in conjunction with paperboard cartons, fibreboard corrugated boxes or multi-wall paper sacks. Packets suitable for palletization are popular since they reduce handling and collateral damage to the product. In the case of foliage and flowers, corrugated boxes are mostly used. There should be consistency of packaging and package sizes, an orderly loading of containers, shipping marks on the master pack and article numbers on the inner packs. Shipping containers must be clearly stamped or stencilled on a minimum of two sides with all code markings, and in waterproof ink. Since buyers generally use the same packaging to ship products out of their warehouse, the packages should be sturdy enough for multiple handling. Reusable rather than disposable packaging addresses environmental concerns. Proper packaging is important since sub-standard packaging may damage the product and create problems for the importer in clearing and marketing the goods. The importer will then refuse to do further business with that supplier. Hints on shipping selected floriculture items to Canada are presented below. Further information is available at: www.sierraflowerfinder.com. Roses

Roses should be well hydrated before shipping and packaged for export using absorbent paper, polypro plastic sleeve and square-pack cardboard protector. Use the tightest possible cut to ensure that the rose opens properly. Florist quarter boxes containing 75 or 100 roses are the typical size. Boxes destined for export must be clearly identified with quantity, variety name, colour mix and grade.

Exotic Blooms and Foliage

Blooms should be individually protected with plastic wrap to maintain humidity in transit. Florist-size trays are standard in the distribution chain. Anthurium destined for North America should be packed in insulated boxes during the winter months.

17

Floriculture 2008 Chrysanthemums

Boxes of assorted daisy/cushion types could be 50% white, 25% yellow, 20% pink, and 5% novelties. Assorted boxes of Dutch novelties should contain 50% pink, 30% yellow, 15% white, and 5% others. Color assortments must be adjusted seasonally with more white for Christmas, more bronze for Fall, and more lavender for Spring. Boxes destined for export must be clearly identified with quantity, variety name, colour mix and grade. Bunches should be well hydrated before shipping as chrysanthemums dehydrate easily in transit.

Carnations

Carnations must be treated with a preservative such as silver thiosulphate (STS). Pack assorted boxes with 25% white, 25% pink, 25% red and 25% assorted novelties. Pack assorted novelty boxes with an even mix of all novelty colours; no red, white or pink. Boxes destined for export must be clearly identified with quantity, colour mix and grade.

The province of Québec has additional requirements concerning the use of the French language on all products marketed within its jurisdiction. Details on labelling instructions can be obtained through your buyer or CFIA at www.inspection.gc.ca.

Lilies Lilies are ethylene sensitive and must be STS treated. Blooms must be shipped tight cut, showing colour but with none open. Foliage should be removed from the bottom 20 cm of stems. New, improved varieties are well received by consumers. Trumpet and Aurelian lilies are not usually produced as cut flowers but would be welcome in this market if their shelf-life could be assured.

Wooden Crates: To prevent more outbreaks of exotic insect pests of concern to Canada, such as the Asian gypsy moth, Asian long-horned beetle and European spruce bark beetle, all species of non-manufactured wood used as dunnage, pallets, crating or other packaging material must be treated by heat, fumigation or chemical preservatives. This directive applies particularly to imports from China and Hong Kong. Such packaging material must be completely free of bark and visible pests. Manufactured wood and wood particles such as sawdust and wood shavings used as packaging materials are exempt from this directive. All shipments containing solid wood crating must be accompanied by an official Phytosanitary or Treatment Certificate from the official plant protection authorities in the exporting country, confirming that it has been treated. All shipments not containing solid wood crating must carry a statement to that effect on accompanying documents. Any shipments containing material not meeting Canadian requirements may be seized or denied entry into Canada, with incurred costs being the importer’s responsibility. More information is available at: www.inspection.gc.ca/english/plaveg/for/cwpc/queste.shtml and www.flowerscanadagrowers.com/issues/index.cfm?fuseaction=drillDown&itemID=74&categoryID=2. Retail Packaging: Attractive, appropriate and appealing retail packaging is important and suppliers should consult the Canadian buyer on this subject. Creative packaging may make the product more attractive for gifts. Space for labelling as required by Canadian regulations should also be made available on the package and UPC/PLU codes included on all retail packages.

LABELLING Labels on imports must conform to Canadian standards. Exporters should consult with and have the buyer approve drafts prior to printing. If any requirement of the Canadian labelling regulations is missing, the goods cannot be sold. Exchanging or attaching additional labels is time consuming and expensive. Imports bearing a description in a foreign language must have a separate label in English and French which complies with labelling regulations. The importer in this case is responsible for the labelling. Pictures and illustrations on the label must correspond to the contents of the package. CFIA (www.inspection.gc.ca/english/plaveg/hort/d-04-01qae.shtml) provides information on labelling and advertising requirements, policies and guidelines dealing with nursery and greenhouse products. As there is no established regulation for labelling of flowers and plants intended for retail sale, exporters might find the following newsletter excerpt useful as a guideline:

18

Floriculture 2008

Source: Florist Supply Ltd., The Source, May 2008. p. 5 (www.floristssupply.com/pdf/The%20Source%20-%20May%202008.pdf)

19

Floriculture 2008

4

Distribution

From a regional perspective, the country may be divided geographically into five distinct markets, plus the territories. These are:

The Atlantic Provinces: New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador (2.3 million persons); The Province of Québec: (7.6 million persons); The Province of Ontario: (12.5 million persons); The Prairie Provinces: Manitoba and Saskatchewan (2.2 million persons); The Western Provinces: Alberta and British Columbia (7.5 million persons); and The Territories: Yukon, the Northwest Territories, and Nunavut (0.1 million persons).

The primary market areas in Canada are Toronto, Montreal and Vancouver. Consolidation of shipments to these three major cities is a common feature of distribution, which is essentially based on delivery from producer/exporter to importer/agent to wholesaler/industrial user, then to retailers. As mentioned on page 4 of this report, ornamental flowers and plants are sold at retail mainly through mass market chain stores, domestic wholesalers, and direct sales to the public. The distribution channels are somewhat different for nursery stock. As the following chart indicates, landscape contractors are the major purchasers of nursery stock in this country, followed by garden centres, the majority of which are now annexed to department, hardware and grocery stores such as Wal Mart, Rona, Home Depot, Zellers, and Loblaws.

Sales of Nursery Stock, 2005-2007 ($ m)

0 20 40 60 80 100 120 140 160 180

Landscape contractors

Garden centres

Other buyers

Retail stores

Mass merchandisers

Other nursery stock growers

Fruit growers

2005 2006 2007 Source: Statistics Canada, Greenhouse, Sod and Nursery Industreis, Cat. 22-202-XIB, 2008

Total Sales ($ m)

591 594

629

570

580

590

600

610

620

630

640

2005 2006 2007

Growers therefore rely heavily on large wholesale distributors to market the product because of their sales force and contacts. Increasingly, chain stores are consolidating the number of growers or suppliers from whom they purchase in a particular region of the country. The mass market chains expect growers to

20

Floriculture 2008

21

“grow with them” as they open more stores. In response to such demands, there has been a spate of corporate buyouts and amalgamations of numerous large growing operations in Canada. In addition to the regular importer, there are a few companies that have several functions such as producing, importing, wholesaling, repackaging and even re-exporting flowers and plants. In general, these companies undertake a considerable amount of work to improve the quality of or adapt their products to meet market demands. Producer/Exporter: A co-operative organization (formed either by producers within a single country or by exporting countries in a geographical region) would be a good vehicle for developing an export trade relationship with Canada. Such an organization would allow producers to work together to improve handling and distribution; set up adequate processing, packing and storage facilities; develop quality targets; develop a grading system; gain access to suitable transport (through increased volume); and establish a brand name or trademark. Specialized personnel could also be hired to give advice on production methods and to conduct marketing activities. Initially, member producers should concentrate on exporting those items with the best market potential and/or those in which they have a strong comparative advantage. Then, as the organization gains experience and proficiency and market conditions warrant it, the range of products could be expanded. By coordinating activities in this way, a strong position could be established in the Canadian market. However, it should be noted that poorly managed co-operatives can have a negative effect, especially when many small producers are involved. Canadian importers are, in fact, wary of such co-operatives since many have had the experience of receiving shipments of inconsistent quality. In such circumstances, trade will be suspended. Broker: Brokers are often used either by the exporter or the importer. The broker charges a fee for his work but cannot take title to the goods. In some cases, a dealer holding a broker permit could, if declared at the time of the transaction and indicated on the Confirmation of Sale (COS), take title to the goods and work for a profit. In this case, a brokerage fee cannot be charged since a dealer cannot take both profit and a brokerage fee. Other types of brokers could also be used in transit countries to secure needed documentation and services. Importers and Agents: Once you have shown a potential buyer what you are capable of producing and they express an interest in taking the relationship further, it is considered normal and prudent to request references from the buyer or agent. Take the time to follow up on these to avoid potential problems in any future dealings with the importer. Importers and agents have an extensive knowledge of the trade network and account for a large portion of imports from TFO Canada’s client countries. They are generally more willing to take the risks involved in dealing with new suppliers. They are, however, likely to subject suppliers to careful study before doing business. They expect references and will want to know about the supplier’s export experience, financial standing, and other such details. Exporters who do not supply references will likely not be well-received. Importers/agents are also more aware of potential problems that may arise in meeting Canadian requirements for quality, etc., and might be willing to assist suppliers with hints on adapting the product, providing labels to assist in penetrating the Canadian market, and providing production order guarantees to allow the factory to plan labour and materials. Wholesalers: An important link in the distribution chain, wholesalers will distribute to and sometimes organize promotional activities with many networks including chain stores, specialty stores and floral service distributors for institutions, hotels and restaurants. Institutional Sector: Including smaller grocery chains, restaurants, hospitals and hotels, this sector is generally supplied by importers in Canada and rarely imports directly. Mass-Market Outlets: Supermarkets carry a small range of plant and floral products throughout the winter and often open garden centres in the spring months, usually starting in May and ending in July. Supermarkets and corner grocery stores are becoming increasingly dominant players in the floral industry as they take away the market share once held exclusively by florists. Most grocery stores have a floral

Floriculture 2008

22

department prominently displayed within the store where they encourage consumers to make flowers a part of their weekly grocery purchases. Other newcomers into the market are the mass-merchandise retail stores like Wal-Mart and Home Depot. These large chains attract thousands of customers every day and have large floral departments. In the long run, they may be beneficial to the industry because more people will be exposed to floral materials. However, these stores often use floral products, especially bedding plants, as loss-leaders and consequently are considered to be price buyers. Flower Auctions: Flower auctions, also known as ‘Dutch auctions,’ particularly those in Toronto, British Columbia, and the San Diego auction in the U.S., play a significant role in the marketing of floral products. Most Canadian buyers purchase the majority of their products through an auction, eliminating the need for individual marketing and promotion by growers, who also remain free to sell direct to wholesalers, florists and garden centres. With the many buyers and growers brought together at the auction, growers may be able to identify lucrative niche areas, rather than growing a wide range of crops in an attempt to supply broad needs. Specialization allows for improved quality and decreased costs of production. However, keep in mind that the return at an auction is only that of the market, less the auction’s commission.

Floriculture 2008

23

5

Import Regulations

TARIFFS Import tariffs on products covered in this report range from free to 16%, depending on the country of origin (www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2008/01-99/tblmod-1-eng.html). Canada’s Market Access Initiative aims to reduce poverty through increased investment and economic development resulting from the reduction of trade barriers. A total of 48 countries, of which 34 are in Africa, are expected to benefit from economic growth resulting from freer access to the Canadian market. All imports originating in an LDC will be granted duty-free, quota-free status, except for dairy, poultry and egg products, which remain subject to duties and quotas. Further details can be found on the websites of TFO Canada (www.tfocanada.ca) and CCRA (www.ccra-adrc.gc.ca/E/pub/cp/rc4322/rc4322-e.html). Import declaration forms must be filled out by the manufacturer or shipper for use by Canadian Government inspectors. Further information may be obtained through your buyer.

INSPECTION Flowers are an aesthetic item, bought for their perfection and beauty, and even if the pests and predators are in perfect balance on the plants, they simply cannot be tolerated if they or the injuries they inflict are noticeable and unsightly. Therefore, trade in floriculture products relies on a comprehensive and reliable phytosanitary certification program to prevent the introduction and spread of regulated quarantine pests into Canada. The Canadian industry is working with the CFIA (which is responsible for floriculture and other agricultural product inspections under the Plant Protection Act) to develop mechanisms to improve the efficiency of the regulatory process. Imports are subject to the rules of the Plant Protection Act and Regulations for control of the entry of pests, parasitic plants and Pinus spp. to prevent the entry and spread of canker and other dangers to Canadian crops. Some plants and plant products must also meet the requirements of the Convention on International Trade in Endangered Species (CITES). The CFIA also has several programs and services for commercial importers. These include: Automated Import Reference System (www.inspection.gc.ca/english/imp/airse.shtml): this is a user-

friendly, searchable database of CFIA import requirements. Through a series of questions and answers, the system will lead you through the applicable regulations and policies to information on all CFIA import requirements for specific commodities.

Import Service Centres (www.inspection.gc.ca/english/imp/importe.shtml) Info Kit for Brokers (www.inspection.gc.ca/english/imp/kite.shtml) Pre-Arrival Review System (www.inspection.gc.ca/english/imp/parse.shtml) Pests of Concern such as Blueberry Scorch Virus, Japanese Beetle, Plum Pox Virus (PPV), Potato

Cyst Nematode, Ralstonia solanacearum, Phytophthora ramorum, and Swede Midge (www.inspection.gc.ca/english/plaveg/bio/bt/potpome.shtml).

Suggestions for Facilitating the Inspection Process Pest Control: While overall adoption of biological pest control methods in floriculture has been slow, it is suggested that any grower’s pest control strategy should include:

Floriculture 2008

24

greenhouse management to minimize pest infestations; evaluation of pest populations before making a decision to apply a pesticide; selection and judicious use of the most appropriate control tactic; and rotation of chemical pesticides to reduce the potential for pests to acquire resistance to specific active ingredients.

Ethylene: Research continues to find better ways to preserve and prolong the shelf life of fresh cut flowers and plant cuttings. Some patented methods include subjecting fresh cut flowers or plant cuttings to various gas mixtures, and providing a vapour blanket of aromatic flower essence (such as lavender or rose) by the presence of essential flower oils or real aromatic flowers. Ethylene, while useful as a plant hormone and a growth regulator, also promotes the aging and ripening of many fruits and flowers. However, ethylene toxicity and damage is of particular importance in the shipping and handling of floral products. Ethylene gas is often added to banana ripening rooms at food wholesalers and can cause problems for floral products if they are handled and distributed from the same building. Symptoms of excess ethylene include malformed leaves and flowers, thickened stems and leaves, abortion of leaves and flowers, abscission of leaves and flowers, excessive branching and shortened stems. Not all harmful forms of ethylene are from external sources — at certain times, ethylene produced within the plants themselves can contribute to premature aging of flowers. This can happen whenever plants or cut flowers are mishandled or stored improperly. Orchids, carnations, gypsophila, delphinium, and antirrhinums are extremely sensitive, while roses and chrysanthemums appear to be more tolerant. To prevent ethylene damage in shipping, storage and display, it is recommended that shippers:

avoid any bruising or mishandling of plant materials; never store flowers with fruits; store and display at the lowest recommended temperatures since the rate of ethylene damage increases with temperature; control ‘ethylene action sites’ by using silver based or non-silver based floral preservative products that bind with ethylene receptors within the plant cells, thereby preventing ethylene related activity within the plant; use activated charcoal or potassium permanganate based ‘scrubbers’ in storage atmospheres where ethylene is a problem; do not operate combustion engines near refrigeration units, and provide adequate ventilation to dispel any ethylene produced by the plant materials themselves; and get rid of old un-saleable materials immediately before they begin decomposing and releasing ethylene.

Soil and Similar Growing Media: Restrictions are in place to prevent the introduction into Canada of quarantine pests associated with soil. Since the importation of soil into Canada is prohibited from all sources except the continental U.S., the Canadian greenhouse and floriculture industries usually try to source plants with growing media as certain plants do not thrive as well when transported bare-root. Approved non-soil growing media include expanded or baked clay pellets, expanded polystyrene beads, floral foam, ground coconut husk, ground cocoa pods, ground coffee hulls, ground rice husk, peat, perlite, pumice, recycled paper, rock wool, sawdust, sphagnum, styrofoam, synthetic sponge, vermiculite, volcanic ash or cinder, lava rock and fern fibre. Plants rooted in a non-soil growing medium may be admitted into Canada if the exporter has been previously approved under the Canadian Growing Media Program (www.inspection.gc.ca/english/plaveg/protect/dir/d-96-20e.shtml). This program outlines standards required for the plant production facility and procedures for plant production that apply to plants intended for export to Canada. All media must be free of plant pests, sand, soil, earth, manure, compost, bark, plant litter and debris, and must not have been previously used for growing, rooting or packing plant and plant matter. Chrysanthemums: Exporters of chrysanthemums must be pre-approved by CFIA under the Canadian Growing Media Program before exporting commercial shipments to Canada.

Floriculture 2008

25

White rust is a serious fungal disease of chrysanthemums, especially of the common chrysanthemums of florists, Dendranthema grandiflora. The disease is spread by infected host materials, where it can remain systemic but not visible. All plants, including finished pot mums and garden mums, plant parts, including cuttings for propagation and tissue culture of Chrysanthemum and Dendranthema species and of Leucanthemella serotina are required to have a phytosanitary certificate and a permit to import. Cut flowers may be inspected on an audit basis but no phytosanitary documentation is required. The grower’s premises and source of supply must also be free of chrysanthemum white rust. Imports of cuttings treated with myclobutanol are permitted from approved growers when accompanied by a phytosanitary certificate and a permit to import. CFIA will advise the plant protection organization of the country of origin of any infections and non-compliance with any conditions. Trial shipments must be sent to a testing facility approved by CFIA. An importer must apply for a Permit to Import the trial shipments: (www.inspection.gc.ca/english/anima/heasan/import/permit_covere.shtml). Two trial shipments, each consisting of 100 to 300 cuttings of the species or cultivars intended for export must be selected at the exporting facility under the supervision of the plant protection organization of the country. Trial shipments must be sent directly from the country of origin to the CFIA-approved testing facility. Cuttings may be released to the importer after the evaluation is completed if the disease is not detected. All trial shipments must be sent pre-paid, and all costs associated with evaluation must be borne by the exporter, the importer or the agent/broker and must be paid prior to the evaluation. Each trial shipment must arrive in its entirety with no parts or portions to follow. The two shipments must be timed to arrive about one month apart. Cuttings will be maintained in quarantine for 60 days at the CFIA-approved testing facility. For export of tissue cultured plantlets, no trial shipments are required. The grower’s premises must be free of chrysanthemum white rust for at least one full year prior to export. The plant protection organization of the exporting country must recommend, in writing to CFIA, the approval of the plant producer based on the producer’s ability to meet the requirements. If chrysanthemum white rust is not detected in any required trial shipments and if all other requirements are met, the CFIA will approve the grower for exports of commercial shipments. If chrysanthemum white rust is detected in a trial shipment or during audit inspections, no further trial shipments will be evaluated that year and the plant producer will not be approved. The exporter may re-apply following one year of freedom from chrysanthemum white rust. Orchids: There are currently no specific orchid pests or diseases listed on Canada’s regulated pest list. For orchid plants, cuttings, and other propagative parts including tissue cultured material, phytosanitary measures are aimed at preventing the introduction and spread of quarantine pests associated with the growing medium, especially soil-type media. Since orchids, especially the terrestrial orchid genera, could be contaminated with these pests if they are propagated in infested soil or a similar growing medium, Canada requires that orchids be certified free of soil quarantine pests. With the exception of cork bark, orchids anchored in bark chips or any other forest product from areas other than the continental U.S. are prohibited entry into Canada because of the potential for introducing forest quarantine pests to Canada. However, tissue culture propagules of orchids imported in a sterile container with a sterile medium, such as agar, may be imported from all countries without the exporter being approved under the Canadian Growing Media Program. Importation of orchid plants and certain other plant species must comply with CITES. More information is available at: www.inspection.gc.ca/english/plaveg/hort/horte.shtml.

Floriculture 2008

26

6

Tips For Exporters

The Canadian market is extremely competitive. Exporters should note that any failure on their part to give buyers excellent service will result in the buyer quickly turning to other suppliers. The following are important factors in establishing your reputation for reliability:

Establish an attractive, easy to navigate and informative website with contact links to your e-mail and ensure that you respond the same day with any information requested. This immediately shows the potential buyer, who gets many of these offers each week, what you are capable of. Always include links to your website in any communication with the buyer. Always keep your fax machine switched ‘on’. Since Canada is divided into different time zones, e.g., Vancouver is three hours behind Toronto; communication with a buyer might be at unusual hours. Buyers who cannot readily contact an exporter will quickly turn to other sources of supply. Send an interim note if information is not immediately available. Give a reasonable date for when all the information would be ready and honour that date. The buyer looks at your sample and how you handle the request to provide one as concrete proof of your capability and an example of how you would handle a potential business relationship. Ensure that you provide the sample well within the requested timeframe and that the sample is of impressive quality and value. This will assure the buyer that you are a viable alternative source of supply. Follow-up orders must match the quality of this sample. No surprises. Canadians expect delivery of the product they purchase. Unavoidable delays should be immediately reported and justified to the buyer; ask the buyer to accept the delay. Provide accurate information and follow up key sales calls in person as soon as possible. Enclose a certificate of analysis of the product and photographs of the production/processing facilities with the letter of introduction to the importer. This certificate may be needed to show conformity with Canadian health and safety requirements and should be obtained from the appropriate authorities in your country. Get to know the Canadian market and your importer. Read trade publications and visit trade shows and retail stores in Canada to get a feel for the market. Establish contact with trading companies or import agents since they may be the most promising channel for new entries. Hire an agent/importer to represent you in Canada. If you are asked for exclusive rights to your product, you should include a clause in the contract for a minimum level of annual purchases. Be flexible and solicit feedback from your buyer on your product and trade relations. Put all verbal agreements in writing. Use English (or French in Québec) in all correspondence and provide information on the product range, capacities and price list, quoting prices in Canadian or U.S. dollars.

Finally, if you have at least one year of export experience, be sure that you are taking full advantage of TFO Canada’s free promotional services. This includes direct promotion of your company and products to Canadian importers via our monthly Import Info E-Newsletter and inclusion in our online searchable database of exporters. Please check your current profile with us by signing in to our website and going to your “Exporter Profile.” Ensure that all your information is correct and that you have accurately completed Step 2 of the registration process including entering one or more of your exported products. Note that while Step 3—uploading additional information such as photos, price lists etc.—is optional, we recommend that you take the time to complete it as well. In the event that you are not registered with TFO Canada, please go to www.tfocanada.ca/register.php and register with us by accurately completing Steps 1 and 2, and as explained above, the optional Step 3.

Floriculture 2008

27

Annex

Sources of Information TFO Canada 56 Sparks Street, Suite 300 Ottawa, Ontario, Canada K1P 5A9 Tel.: (613) 233-3925 In Canada: 1-800-267-9674 Fax: (613) 233-7860 E-mail: tfocanada@tfocanada.ca Internet: www.tfocanada.ca/index.php AGRICULTURE AND AGRI-FOOD CANADA Sir John Carling Building 930 Carling Avenue Ottawa, Ontario, Canada K1A 0C5 Tel.: (613) 759-1000 Fax: (613) 759-6726 Internet: www.atn-riae.agr.ca CANADA BORDER SERVICES AGENCY A directory of CBSA offices across Canada is available through the Internet site. General Internet: www.cbsa-asfc.gc.ca Tariffs: www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2008/01-99/tblmod-1-eng.html CANADIAN FOOD INSPECTION AGENCY (CFIA) 59 Camelot Drive Ottawa, Ontario, Canada K1A 0Y9 Tel.: (613) 225-2342 Fax: (613) 228-6601 Internet: www.inspection.gc.ca CANADIAN HORTICULTURAL COUNCIL 9 Corvus Court Ottawa, Ontario, Canada K2E 7Z4 Tel.: (613) 226-4880 Fax: (613) 226-4497 Internet: www.hortcouncil.ca CANADIAN NURSERY LANDSCAPE ASSOCIATION 7856 Fifth Line South Milton, Ontario, Canada L9T 2X8 Tel.: (905) 875-1399 Fax: (905) 875-1840 Internet: www.canadanursery.com FLOWERS CANADA GROWERS 45 Speedvale Ave. E., Unit 7 Guelph, Ontario, Canada N1H 1J2 Tel.: (519) 836-5495 Fax: (519) 836-7529 Internet: www.flowerscanadagrowers.com

HEALTH CANADA Consumer Product Safety Bureau 123 Slater St., 4th Floor, P.L. 3504D Ottawa, Ontario, Canada K1A 0K9 Tel.: (613) 946-6452 Fax: (613) 952-3039 Internet: www.hc-sc.gc.ca/cps-spc/index_e.html I.E. Canada (CANADIAN ASSOCIATION OF IMPORTERS AND EXPORTERS) 438 University Avenue, Suite 1618 Toronto, Ontario, Canada M5G 2KB Tel.: (416) 595-5333 Fax: (416) 595-8226 Internet: www.importers.ca INDUSTRY CANADA WEB SERVICE Trade Data Online 235 Queen Street Ottawa, Ontario, Canada K1A 0H5 Tel.: (613) 954-5031 Fax: (613) 954-2340 E-mail: info@ic.gc.ca Internet: www.ic.gc.ca/epic/site/tdo-dcd.nsf/en/Home INTERPROVINCIAL FLOWER MARKET 3600 Pitfield Blvd. Pierrefonds Québec, Canada H8Y 3L4 Tel.: (514) 334-7733 Fax: (514) 334-5311 Internet: www.marchefloral.ca ONTARIO FLOWER GROWERS CO-OPERATIVE LTD. 910 Midway Blvd. Mississauga, ON, Canada L5T 1T9 Tel.: (905) 565-5056 Fax: (905) 670-9637 Internet: www.ontarioflowers.com UNITED GROWERS COOPERATIVE ASSOCIATION 4085 Marine Way Burnaby, BC, Canada V5J 5E2 Tel.: (604) 430-2211 Fax: (604) 430-3858 Internet: www.ufgca.com

Floriculture 2008

28

Trade Shows CANADA BLOOMS 777 Lawrence Avenue East Toronto, Ontario, Canada M3C 1P2 Tel.: (416) 447-8655 Fax: (416) 447-1567 Internet: www.canadablooms.com CANADIAN GREENHOUSE CONFERENCE 324 Lake Street Grimsby, Ontario, Canada L3M 1Z4 Tel.: (905) 945-9057 Fax: (905) 945-8643 Internet: www.canadiangreenhouseconference.com CANWEST HORT SHOW #102 - 5783 - 176A Street Surrey, British Columbia V3S 6S6 Tel.: (604) 574-7772 Fax: (604) 574-7773 Internet: www.canwesthortshow.com/show_history.htm

FLOWERS CANADA RETAIL CONVENTION 99 Fifth Ave., Suite #305 Ottawa, Ontario, Canada K1S 5P5 Tel.: (519) 836-5495 Fax: (519) 836-7529 Internet: http://flowerscanada.org/content/en/nb080707.htm#ART7 GARDEN AND FLORIST EXPO 7856 Fifth Line South Milton, Ontario, Canada L9T 2X8 Tel.: (905) 875-1805 Fax: (905) 875-3942 Internet: www.horttrades.com/specialevents.php or www.gardenexpo.ca

Publications Canadian Florist Magazine: www.canadianfloristmag.com Canadian Gardening: www.canadiangardening.com Fusion Flowers Magazine: www.fusionflowers.com Useful Internet Sites Container Gardening: www.greenhousecanada.com/content/view/1159/62/ Ontario Greenhouse Floriculture Industry: www.omafra.gov.on.ca/english/crops/facts/greenflor.htm Shelf life: www.flowerscanadagrowers.com/issues/index.cfm?fuseaction=drillDown&itemID=131&categoryID=1 Statistics Canada: www40.statcan.ca/l01/cst01/agrc22a.htm?sdi=floriculture