With an Entrepreneur’s Jump Start, the Organic Market Blossoms
Gerald Prolman has always liked big challenges. Several years after graduating from college, he jump-started Made in Nature, one of the first organic produce distributors in the U.S. He sold the company to Dole and then helped the giant grower develop its first organic bananas in the mid-1990s.
In the new millennium, Prolman turned his attention to flowers. Because flowers are generally not eaten, the U.S. Department of Agriculture neither regulates nor inspects them for pesticide residues. At the same time, buyers will scoff at a flower that is less than perfect and U.S. Customs will reject a whole shipment for a single insect. Given all these factors, it is no surprise that flowers are the most pesticide-intensive crop and that flower workers pay a heavy price. In Ecuador, the second-largest exporter of flowers to the United States, 60 percent of workers suffer from headaches, nausea, blurred vision or fatigue, according to a 1999 study by the International Labor Organization. Doctors in Cayambe, the rose capital of Ecuador, confirm these findings and add birth defects, sterility and miscarriages to the list.
Prolman’s vision began to take shape three years ago. Through buying organic flowers, Prolman reasoned, American consumers "would start thinking not only about their own health but also that of workers and ecosystems around the globe."Prolman launched Organic Bouquet in 2001 with the idea of selling organic flowers over the Internet. But he quickly ran into a chicken-and-egg dilemma: apart from small-time farmers" markets, there was no supply. And major growers were wary of organic flowers because there was no proven demand.
After two years visiting flower farms in the United States, Prolman was unable to convince any major grower to make the expensive plunge into organics. So he headed to Ecuador and Colombia, the countries that account for nearly half of all flowers sold in the U.S. He discovered that, because of the prohibitive cost of pesticides and artificial fertilizers overseas, a few growers had developed natural alternatives and were still producing perfect flowers. "They were using organic techniques without even knowing it," he recalls.
But there were still major hurdles, including the fact that there was no certification program. "What moves an industry is volume," Prolman explains. "Supermarkets go to major growers because they can get 10, 20 or 50 truckloads at once." To get this volume, Prolman decided last year to create a new eco-label, similar to that used for organic produce or dolphin-safe tuna, which would certify growers. It would create a new market niche that consumers would readily identify by tags and stickers.
Prolman knew the label would only work with the support of the bigger players in the $16 billion floriculture industry. He started with Anna Ball, CEO of Ball Horticultural, the world’s largest supplier of flower seeds. Ball was so convinced by Prolman’s vision that she tapped her top scientist, Francis Kwong, to set up a think tank to develop the know-how required to raise organic flowers.
Whole Foods Market, the $3.7 billion natural supermarket chain, was receptive to Prolman because several media outlets had recently detailed the abysmal conditions of flower workers in Latin America. As a result, Whole Foods had launched a sweeping test of its flowers for pesticide residues.
"The most specific thing we learned is that we needed to develop relationships with growers," says Edmund La Macchia, Whole Foods" head produce buyer. Whole Foods developed a program for evaluating its flower farms, and it joined forces with Prolman.
Organic Bouquet signed up Sun Valley, the U.S.’s largest flower grower, Delaware Valley, the largest flower wholesaler, and Esmeralda, one of the top four flower growers in Latin America. Prolman also recruited a half dozen other nearly pesticide-free growers in Ecuador and Colombia. All agreed to chip in $10,000 to develop the label.
Eco-labels for flowers are not entirely new. In the early 1990s, German environmental groups organized a boycott of imported flowers. Within a few years, there were a half-dozen flower eco-labels in Europe, Colombia and most recently Ecuador—but none took hold with American consumers.
Whole Foods hired Scientific Certification Systems (SCS) of Emeryville, California to analyze existing flower labels. SCS found a confusing mish-mash of principles. Even worse, no program actually prohibited growers from using the world’s most toxic pesticides. Stan Rhodes, CEO of SCS, says, "All the existing programs caused farmers to use less pesticides but the chemicals they were actually using are more toxic and last longer. So the damage is actually greater."
The new and very stringent Veriflora label will be launched this fall by SCS and some of the biggest names in the industry. Prolman hopes the companies will encourage other supermarkets, florists and growers to go green.
SCS is still fine-tuning the protocols of Veriflora, which requires that all growers live up to the "best practices" possible. All growers must agree to full organic production within a certain timetable and, at the same time, stop using the most toxic, Category I, chemicals immediately. "Veriflora is a bridge that leads you to becoming an organic grower," says Prolman.
Veriflora’s five basic principles begin with organic production but also include fair labor practices, ecology, water conservation and waste management. Veriflora ensures, for instance, that workers get at least minimum wage in their country, have the right to organize and get paid overtime. It also forces companies to mitigate any environmental damage they have done in the past.
SCS auditors will make unannounced visits to member farms and test everything from the compost to the streams running off the property. SCS hopes to eventually expand the program to include bananas, coffee, pineapples and avocados.
The Society of American Florists (SAF), which represents 23,000 U.S. florists, is so far not endorsing Veriflora. "We don’t take a position on "green label" programs because there’s a multitude of them," says Peter Moran of SAF. "I don’t see the problems on flower farms you read about in the newspapers. You don’t eat flowers; it’s not the same as food."
That kind of ambivalence is only one of the reasons why Veriflora backers will focus their marketing efforts on supermarkets instead of florist shops. Over the last 10 years, supermarket sales of flowers in the U.S. increased from 17 to 29 percent of overall volume, while florist sales dropped from 70 to 47 percent. "There are only 50 supermarket players that we have to convince in the U.S.," adds Peter Ulrich, CEO of Esmeralda. "That is a lot easier than dealing with 1,200 wholesalers and 30,000 florists."
But Ulrich also points to the next chicken-and-egg dilemma for organic flowers: American shoppers don’t know enough about organic flowers to want them, and supermarkets may not be willing to spend the money to educate consumers. Ulrich predicts that the costs of producing organic roses will be about twice that of normal ones.
BioGarden, a small farm in Ecuador, is
so far the world’s only U.S.-certified organic flower grower. The company began selling roses, calla lilies and other flowers through Organic Bouquet two years ago. "We use chamomile as an insect repellant, along with crushed nettles, mint and milk curd," explains BioGarden owner Hernan Chiriboga.
BioGarden’s biggest challenge so far is controlling diseases without synthetic pesticides. When BioGarden first began producing organic flowers two years ago, production dropped by 35 percent. This year it will only be 25 percent less.
Other growers say it is impossible right now to grow certain flowers organically. But Prolman believes the technology will develop rapidly—just as it did for strawberries 20 years ago. "These growers can’t see how close to organic they are," he says. "You get them on the right path and they will run, especially when the market is rewarding them for it."