Christina Stembel, CEO and founder Farmgirl Flowers, is not really a farm girl, and she admits she learned how to arrange flowers “from the university of YouTube.” But her floral e-commerce company is seeing revenue grow by 300 percent year over year.
As an outsider, Stembel spotted problems with the $4 billion dollar floral e-commerce industry and decided she could do better. Her company’s pitch focuses on its socially conscious business model, which strives for U.S.-sourced product and less waste.
When Stembel, who is now 38 years old, was director of Alumni Relations for Stanford University’s law school, she planned events and was stunned at the cost of floral centerpieces. Since she’d always wanted to start a business, Stembel began researching the floral industry, discovering that four companies dominated the e-commerce gift category.
She also realized that since the 1990s, the industry has been outsourcing much of its flower supply to South America. As a result, three out of every four cut flowers sold in the U.S. are now grown outside of the U.S., according to Stembel.
Christina Stembel, founder of Farmgirl Flowers
Other sources estimate the number could be as high as 90 percent, with most coming from Colombia and Ecuador, where wages are a small fraction of what U.S. workers receive. This has made it difficult for U.S. growers to remain competitive.
Stembel observed a massive amount of waste in the floral industry. After polling a number of florists, she estimated about 40 percent of flowers were never sold, not to mention that the standard floral wrap, cellophane, isn’t biodegradable or recyclable. Add this to the fuel consumed importing flowers, and the industry’s environmental impact only grows.
Plus, Stembel said she was disappointed with what was on offer from online providers, which didn’t always look good when it arrived.
“My mom lives in Indiana, with no florists nearby, so I would spend my entire lunch hour to find the least ugly option possible,” Stembel said. “I chose all white, and what was sent to her was kelly green-dyed daisies. Everybody says, ‘It’s the thought that counts.’ I disagree. If you’re going to spend an average of $82 on flowers you should have 82 dollars’ worth to show for it, and not be embarrassed by what shows up. We can do better than this.”
All signs pointed to a need for change, and the timing seems right. Millennials are not quite on board with the outdated model maintained by the giants of floral delivery.
A Retail Feedback Group survey last fall indicated that while baby boomers are the most likely generation to purchase flowers once a week or every two weeks, nearly half of millennial floral shoppers spend less than $50 annually, with their high cost being one factor driving fewer purchases.
Stembel started Farmgirl Flowers from a San Francisco dining room in late 2010 with her life savings of $49,000, and without having a college or business school education.
“I grew up on a farm in Indiana, and you just didn’t go to college — you got married and had kids. That was not the path I wanted to take,” she said, adding that she never worked on the farm. Instead, she always wanted to start a business.
Launching Farmgirl Flowers was her crash course. “Taking that $49,000 — I couldn’t have gone to business school for that — [but] it’s been the best business school I ever could have done,” she said.
Farmgirl works exclusively with U.S. growers, about 95 percent which are located in California, with the rest coming from Oregon.
The burlap wrapping each arrangement and bouquet, Farmgirl Flowers’ trademarked signature, is upcycled from biodegradable coffee bean bags donated by local roasters. As another waste-reduction measure, just one style arrangement is offered per day.
“Everybody wants to be a unicorn. I’d rather be a workhorse than a unicorn.” -Christina Stembel, Founder, Farmgirl Flowers
Beginning as a San Francisco service delivering by bicycle and scooter, Farmgirl Flowers now delivers to other points nationwide via overnight mail.
Environmentally, the national shipping solution is not perfect, admitted Stembel, but even shipping to the East Coast from California, at most 2,500 miles, is fewer than the distance foreign-grown flowers travel.
“We’re trying to provide a socially conscious alternative that’s doing things as best as we possibly can. The boxes we use make 30 percent less waste, so every detail we try, knowing there’s no way to be 100 percent,” she said.
This forward-looking approach is working. Farmgirl Flowers earned $56,000 in the first year, and Stembel says the company is projected to hit $12 million this year. The team is comprised of 63 members with full benefits, and everybody who wants to be full time has that option.
Farmgirl Flowers Mother’s Day bouquet
Source: Christina Stembel
Farmgirl Flowers Mother’s Day bouquet
As for those American flower suppliers, “the great part is they are growing with us. They’re able to hire more, and we’re the biggest customer of at least 90 percent of our farms now.”
As awareness and demand rises about U.S. flower sourcing, many smaller florists are approaching Stembel for help, so she’s working on a business-to-business wholesale line that will likely debut this summer.
It hasn’t all been smooth sailing for Farmgirl Flowers. But she advises business owners to get their ego out of it.
“I’ve learned to fail fast,” she said, recalling the company’s attempt to expand to Los Angeles. “We opened L.A. last year and we closed it last year. Until we can take half the cars off the road, there’s no way to make deliveries there.”
The shop closed after only six months, proving there is no “secret sauce.”
“Everybody asks how we’ve been able to grow this quickly. It’s just really hard work,” she said. “Everybody wants to be a unicorn. I’d rather be a workhorse than a unicorn. You just have to work your butt off.”
Courtesy : cnbc.com