Ecuadorian Strike Impacting the Flower Industry….Update

Introduction

• Scott Shepard, host of the Flower Podcast, speaks with Eduardo Lator, CEO of Hoya Verde Roses.

• The discussion revolves around the current situation in Ecuador related to political unrest affecting the flower industry.

Background on Eduardo Lator

• CEO and founder of Hoya Verde Roses, established in 1997.

• The company grows roses on 120 acres mainly in Cayambe; exports primarily to the USA, Europe, and Russia.

• Fair trade certified and a B Corp focused on social responsibility.

Current Situation in Ecuador

• Political turmoil leading to increased costs of living and tensions in the country.

• Upcoming local elections are causing unrest, especially among indigenous groups seeking governmental support.

• Major price increases in logistics, fertilizers, and packaging due to COVID-19 and international conflicts.

• Riots and protests have created blockades affecting farms’ operations and logistics.

Impact on Flower Production

• Blockades in key production areas such as Cayambe and Cotopaxi.

• In Northern Ecuador, farms have closed temporarily for safety, while blockades have made transportation difficult.

• Among the north, 80% of production has been shipped recently, with efforts to transport flowers through blockades at unusual hours.

• Some farms are resorting to using helicopters for transportation, albeit at high costs.

Logistics and Transportation Challenges

• Increased cancellations of passenger flights and some cargo flights due to airport blockades.

• The first few days of protest impacted about 60% of farms; currently around 80-90% affected by blockades.

• Farmers have been strategic in navigating through blockades, often paying for passage.

Workers and Farm Operations

• High employee attendance; 90-95% of workers are showing up despite risks.

• Maintenance of plants continues, though southern regions face intermittent worker presence due to unrest.

• It’s anticipated that once protests conclude, farms can return to normal operations quickly.

Predictions and Public Sentiment

• Eduardo believes that the unrest may last only a short time longer, as protesters will need sustenance soon.

• The president and police are unarmed, and non-lethal crowd control methods are currently being employed.

• UN and EU involved in mediating dialogue between the government and protesters.

Assistance for the Flower Industry

• Eduardo urges patience from the global markets, assuring that flowers will continue to be shipped albeit with some delays.

• Crop viability should remain intact due to Ecuadorian flowers' resilience.

Economic and Market Dynamics

• Rising costs attributed to transportation, logistics, and materials, not solely due to increased flower prices.

• Price hikes have been necessary to cover raw cost increases rather than increased profits.

• Significant changes in the market dynamics, with a 20-30% shift toward supermarkets due to acquisitions by larger companies.

Conclusion

• Eduardo emphasizes the importance of the flower industry in Ecuador for societal well-being, particularly highlighted during COVID-19.

• Scott thanks Eduardo for his insights and expresses hope for a swift resolution to the current unrest.

• Ongoing communication and updates are crucial as the situation evolves.