By Ken Sakamoto, Star-Bulletin
Russell Watanabe, president of Watanabe Floral, displays
some of the roses for sale at his Kalihi shop. Watanabe had to
change his marketing strategy because of competition
from South American growers.
South American imports
By Peter Wagner
are nipping Hawaii's rose
industry in the bud
Star-BulletinHigh in the hills of Kamuela, Big Island rose farmer Raymond Kawamata is pulling up thousands of his prized plants. After more than 20 years as a top rose grower, he's planting tomatoes.
"I can see the handwriting on the wall," said Kawamata, whose business is off 40 percent. "I think it's inevitable that a large rose farm will have difficulty surviving here."
Kawamata Farms and neighboring Watanabe Floral are the biggest rose producers in the state, harvesting more than 9 million roses a year. But the Big Island farmers have seen their dominance slip in recent years with the arrival of a stunning competitor from South America.
The pricey, long-stemmed imports have taken 45 percent of the Hawaii rose market in just three years.
"Their production costs and labor are lower," said Kawamata. "And their product is extremely good."
Grown high in the Andes of Ecuador and Colombia, the foreign flowers are bigger than their local cousins. The higher, the better, experts say, and at 10,000 feet, South American growers have Kamuela beat by nearly 8,000 feet.
What arrives in Honolulu, after three to five days of handling from Miami to West Coast distributors, is a rose with the thickest, longest stem and the biggest flower in town. It's a "premium" rose that sells for $65 to $85 a dozen in some Honolulu flower shops, a price many are willing to pay despite fresher $50 arrangements of long-stemmed Kamuela roses.
Compounded by Hawaii's weak economy, the competition has been rough on Hawaii growers.
"There's no question the traditional channels of distribution have been severely challenged by the imported competition," said Russel Watanabe, president of Watanabe Floral, the state's biggest grower and wholesaler.
Watanabe, who saw trouble brewing on the mainland 10 years ago, backed away from long-stemmed roses and now specializes in shorter 10- to 22-inch sizes that South American growers don't concentrate on. It's a more affordable niche that has helped the 52-year-old company weather the storm.
"Our flowers are moderately-priced for every day use," Watanabe said. "The kind you put on your kitchen table or on your desk at work."
Both Kawamata and Watanabe built their businesses as wholesalers, supplying retail flower shops with their roses. But South American exporters, working through a massive distribution system in Miami, began bypassing them by sending small shipments directly to retailers.
Watanabe responded by turning half his Kalihi wholesale warehouse into a retail outlet where roses are sold "by the bunch" for $5 to $8.
"We had to make a very pragmatic decision," said Watanabe. "We saw that by staying strictly in the wholesale business we'd end up pulling plants like the Kawamatas."
Hawaii growers are not alone in their struggle.
Combining trade advantages with a flashier product, South American exporters last year controlled 70 percent of the U.S. rose market.
Tended on huge farms by workers earning less than $10 a day, South American roses are grown at considerably less cost than in some parts of the United States.
"We live in a society with a lot of regulations and controls," said Watanabe. "You walk into a lot of their operations and you see jury-rigged electrical systems. But we have to meet electrical codes. And they can use pesticides that are banned here."
But most painful for American growers has been the Andean Trade Protection Act, which went into effect in 1992. Meant to discourage drug production, the measure lifts import tariffs of 3 percent to 7 percent on cut flowers, textiles and other goods from Bolivia, Colombia, Ecuador, Peru and Venezuela.
James Krone, executive director of Roses Inc., a national trade association based in Michigan, said the trade policy has done more to snuff out U.S. rose farmers than Colombian drug lords.
"It seems we have just as many drug problems in the U.S. as we've ever had," said Krone. "Meanwhile, we've taken a lot of familyowned businesses and dumped them in the river."
He notes the number of rose farms in the United States has dropped from 225 to 159 since the policy went into effect.
Other flower farmers also are suffering. According to the U.S. Department of Agriculture, South American growers held 92 percent of carnation sales and 81 percent of chrysanthemum sales in the United States last year.
South American roses have long been seen in mainland flower shops, growing from a scant 1 percent of the national market in the early 1970s to 50 percent in 1992. That's when the not-so-sweet competition arrived in Hawaii, finding a lucrative market despite high transportation costs and loss of freshness.
Local growers note it can take five days to fly a rose from South America to Hawaii while local growers can have their flowers to market in a matter of hours.
"Our biggest advantage is freshness," said Watanabe. "It gives the local wholesaler a little more room to operate in if you have the right niche.
Rick Perez, marketing manager at Spring Floral Distributors on Kalakaua Avenue, began shipping roses to Hawaii from Miami in 1992 and was among the first to set up shop in Honolulu in 1995. He's now among seven Honolulu wholesalers dealing in imported roses.
It's a good market, Perez said, because Hawaii has one of the highest per capita flower consumption rates in the country.
"This state is known for having weddings," Perez said. "People fly in from all over the world just to get married in Hawaii. So there's a huge demand for roses."
Meanwhile, Kawamata recently began uprooting 15,000 of his 85,000 rose plants to expand the one-acre tomato farm he began about a year ago. It's been a painful task.
"The hardest part is seeing all those rose plants that you know would bring joy," said Kawamata. "It's very hard to destroy a plant such as a rose."
