With flowers shipped directly from farmers and delivered on demand with little advance notice, a new crop of floral start-ups is catering to consumers, including millennials, and disrupting the flower sector — just in time for Valentine's Day.
The florist industry traditionally has been dominated by mom-and-pops. Since then, players including grocery chains and online portals such as 1-800-Flowers.com and FTD.com have eaten into that market share. U.S. spending on flowers is forecast to dip just slightly to $1.9 billion this Valentine's Day from $2.1 billion in 2015, according to the National Retail Federation.
Adding to the florist competition, new players include the Bouqs Co., based in Venice Beach, California. It launched in 2012, and recently closed a $12 million round of seed funding, bringing its total to just under $20 million from investors including Quest Ventures and Draper Associates.
Bouqs ships cut-to-order bouquets from certified eco-friendly farms in South America and the U.S. Prices begin at $40 and includes shipping. It has also partnered with U.S. florists in 130 regional markets for quick, on-demand delivery beginning at $60.
"We scour the world for farms that are doing the right thing — for us that means they're not using red-label chemicals or cutting down rain forests, says John Tabis, chief executive and co-founder of Bouqs Co. "When you place an order, we cut and hydrate and ship directly from there."
While companies including 1-800-Flowers.com and FTD.com do feature eco-friendly bouquets, new start-ups are taking that idea a step further by cutting out the middleman.
"A traditional supply chain has multiple steps — farmers sell to importer-brokers, they hold the product in storage for a few days, then they sell to wholesalers who move it around the country and then sell to local retailers," said Tabis of the Bouqs Co. "At every step of the way you have environmental waste and the flower becomes worth less," he said.
Also competing in the growing eco-friendly, on-demand space is BloomThat, based in San Francisco, which has raised $7.6 million since 2013. The majority of the blooms are sourced from sustainable farms in California, where arrangements are also designed. The farm partners are trained by BloomThat to build the bouquets, and prices start at $38. Delivery costs are extra.
They also package their bunches in burlap, which is 100 percent compostable. The company composted 30,000 pounds of flower trimmings last year, according to a spokesperson for BloomThat.
The smallest of the new flower disruptors is Washington, D.C.-based UrbanStems, launched in 2014 and has raised $1.5 million in seed funding. The company also sources from verified, eco-friendly farms in South America, designs bouquets in house and delivers the flowers through its own in-house bicycle courier network in the Washington, D.C., metro area and in Manhattan, Brooklyn and Queens. Prices start at $35.
And while all three newer players are aiming to take on and maybe one day surpass the online giants of the industry, for now, what UrbanStems values is "control of the experience," says co-founder Jeff Sheely.