Michael: So, what would you tell an importer or someone who’s thinking about supplying Wal-Mart? Is there any advice on how to work with them, what they can expect, and what you can expect as a supplier to them?

Edgar: I can summarize it in two words – underpromise, overachieve.

Music

Hi, this is Michael with Michael Senoff’s HardtoFindSeminars.com. I have a very special interview for you, if you’re interested in learning how to get your product into Wal-Mart and other mass merchandise retailers here in the US. Do you want to get your product in Wal-Mart or any of America’s top retail chains? What better way to learn than to listen to the advice from someone who has done it before? This is a very special interview with the CEO of one of the nation’s largest and most prestigious flower importers and distributors. His name is Edgar. He has been dubbed the Latin King of Flowers. Although he seems a bit embarrassed by his nickname, the success story that he tells will prove that it’s quite justified and well earned. This interview is packed with great information on topics such as import/export, innovations to the flower industry, business strategies, and how to be successful at operating a business dealing with perishable products – and also how to deal with Wal-Mart and much more. It’s an enjoyable interview that I encourage you to take the time to listen to. Not only will you learn a great deal about getting your product into Wal-Mart and working with Wal-Mart, but you’ll hear the story of how a young man from a third world country came to America with hard work and ingenuity, turned his passion for flowers into a multi-million dollar business. Get ready, let’s go!

Michael: How did you get started in this? Where you entrepreneurial when you were younger, and where are you from?

Edgar: I was born in Bogota, Columbia, and at the age of 15 ˝, I came to America as an exchange student and landed in California in a little town called Thousand Oaks.

Michael: How old are you now?

Edgar: I’m 44. Basically, I finished my high school.

Michael: Did you come over just yourself or your family?

Edgar: Myself.

Michael: That must have been pretty scary.

Edgar: Very scary, but a lot of fun, too.

Michael: Did you know anyone?

Edgar: No, I did not know anyone, and I came to an American home with great people. I spend with them one year in which I was able to learn English and got my high school degree.

Michael: Why did you want to leave Columbia? Why not just stay there?

Edgar: Because I was looking for an opportunity, and I wanted to live in the United States.

Michael: Did you have that dream that everyone has?

Edgar: I had the dream since I was probably twelve years old.

Michael: Where did that start? Do you remember?

Edgar: Watching TV.

Michael: Watching TV?

Edgar: Yes.

Michael: What were you thinking, that America is the greatest place to live?

Edgar: The greatest place to live. It’s a place with opportunity, and I didn’t want to live in a country where opportunities are limited to your last name.

Michael: Did you know at that age there wasn’t much opportunity?

Edgar: Yes.

Michael: How did you know that?

Edgar: My father explained it to me, indented in my head that the opportunities were in America.

Michael: What did your father do?

Edgar: My father actually was well off in Columbia. He used to be importer of steel, and had distribution for the construction companies and bigger stores.

Michael: Was he importing into Columbia?

Edgar: Into Columbia.

Michael: Was his dad in the business, your grandfather?

Edgar: Yes.

Michael: So, you have a lineage of importing and exporting expertise.

Edgar: Kind of yes, I grew up and listened to my father dealing with other countries and dealing with government agencies and importing.

Michael: Did he teach you a lot in the younger years?

Edgar: Well, not that he teaches me a lot, but he exposed me to a lot of different things. I used to go and work at the factory on vacations. If we weren’t going to go anywhere, we would be working. It was an interesting upbringing, and my father has a very strong work ethic. So, at a very early stage in my life to be able to see that.

Michael: You didn’t grow up poor in Columbia. You were well-off in Columbia.

Edgar: Yes, we weren’t multi-millionaires, but my father was very well off.

Michael: That’s good because it’s definitely common that if you have very wealthy parents, many times the kids don’t end up with that drive and ambition.

Edgar: But, he never paid me anything that I didn’t earn.

Michael: He taught you that if you want something you work for it.

Edgar: Oh, yes, I had to work it. The little something that he gave me, I had to clean the cars. There was something that I had to do for whatever I wanted. There was nothing for free.

Michael: You went through high school, and then did you mention that you did go to college?

Edgar: Yes, basically I finished my high school years. I went back to Columbia for six months just to spend some time over there to settle in with my things, and had already been accepted her to FIU in Miami for six months. My school started here, so I came to Miami and I started my college here. I graduated four years later.

Michael: Were you majoring in business?

Edgar: Yes, International Business.

Michael: So, you knew that’s what you wanted to do.

Edgar: Yes, in management.

Michael: Did you have any idea at that time it was going to be importing flowers?

Edgar: Well, I was going to school. That’s where the whole thing started basically when I was a junior in college, I started selling flowers. My father had a friend who had a farm in Columbia, and he started to export a little bit of roses to the United States. Then, I would receive those flowers and try to sell them to flower shops in very small amounts, a couple of boxes here and there, and I had a van.

I would knock on flower shops, and sells bunches or by box loads.

Michael: Do you remember your first shipment?

Edgar: Yes.

Michael: How many did you ship over your first shipment?

Edgar: Oh, about ten boxes.

Michael: So, that wasn’t on a container.

Edgar: No, it was by plane, in a passenger plane. I picked it up. I took it home, put it in the air conditioning.

Michael: How many flowers in a box?

Edgar: About 300 roses.

Michael: So, you had about 3,000 roses. How long did it take to get them from Columbia to the US?

Edgar: There was nine cargo flights, and passenger flights. The passenger flights would come about once a day, and then you pick them up four or five hours after the plane lands. They went through inspections and customs. You can pick them up. You pay for the freight, and then you can pick them up.

That’s how the whole thing started. Then in 1985, I hired my first employee which was a sales manager for a company that I basically looked up to, the company at the time was one of the pioneers, one of the largest companies.

Michael: Of what?

Edgar: Of flowers.

Michael: So, you hired him away.

Edgar: I hired him away from that company to basically to learn the wholesale side of the business.

Michael: How much business were you doing at that time?

Edgar: Not even $100,000 a year.

Michael: Were you still a one-man or two-man operation?

Edgar: A one-man show.

Michael: Were you bringing all your flowers in by plane at that time?

Edgar: Yes, by plane, but I was getting maybe one shipment a week just to give myself time to go and sell that shipment, and after that shipment was sold, then I would get another shipment. I had a handful of customers. There were flowers shops that would buy a couple of bunches. The biggest ones bought one box.

Michael: How competitive were you pricewise at the time?

Edgar: Basically, I had very little knowledge of pricing. So, I would rely on the customers to basically give me guidance on the price.

My goal, at the beginning, was to understand the business more than making money. It was to understand how the business flows, and I was completely wrong in how I approached it initially because I was trying to sell to the florists. There’s no volume in selling to florists, and very limited to the city market.

Quickly, I realized by listening and seeing what all the companies were bringing in large volumes, I would ask, “How does that work?” to the truck drivers of the other companies. They would explain to me they bring big lots, and they’ll put them in trucking companies, and they go to wholesalers in different cities of the countries. That’s when I realized I was going about the business wrong.

Michael: So, that’s when you switched gears.

Edgar: I switched gears. I hired this gentleman, and we started to become a real company. So, we actually incorporated in 1985.

Michael: When did you hire him?

Edgar: I think I hired him in August, 1984.

Michael: This guy had been in the wholesale flower business for years.

Edgar: For years, the gentleman at the time had been 52 years old.

Michael: So, this guy knew exactly what to do.

Edgar: Exactly. So, he became my mentor of the business.

Michael: Did he work with you daily?

Edgar: He would sell the flowers. I would pick them up at the airport. At the time, we rented a little place and we put a little cooler. We had one truck, and we would pick up the flowers at the airport, bring them to our location, and then ship them to – at the time – the only trucking company that was moving flowers out of Miami was Armelini. We would take them to the Armelini terminal with a label to ensure the customers that we had made the sale.

We would sell in the morning. We would ship in the afternoon. Late afternoon, they arrived from South America, and then the next morning we start selling. We started bringing product everyday little by little.

The second year when we established the company late in ’84, in 1985, we sold $600,000.

Michael: At retail, let’s say a dozen roses sells for $10 on the street. What are the margins for a retailer?

Edgar: Normally, the margins of a retailer, for instance, like Wal-Mart, these large retailers, take anywhere from 40-60% depending on how much they want to promote. If they want to be aggressive, they can go down to 40%. When they’re not looking for volume, but they’re looking for niches, they go to 60%. It depends. Every company has different margins.

Michael: How about related to your cost? How much margins could you make?

Edgar: It’s based on quality and space and innovation. We take a price point, and we basically study what the consumer thinks. An educated consumer, what they perceive as far as volume from a bunch of flowers, depending on the mixture of flowers, depending on what you’re offering, the grade, you achieve a price point.

Once you achieve a price point, then you go back what the retailer takes, what the grower needs. Then, we find ourselves a margin in between.

Michael: Does it all depend on the type of flower?

Edgar: It all depends on the type of flower and the retail point you want to hit.

Michael: How long did it take for your company to be profitable or start making money?

You’re listening to an exclusive interview found on Michael Senoff’s HardToFindSeminars.com.

Edgar: I would say the second year, 1986, we started turning profits.

Michael: Who was your very first big buyer or client?

Edgar: It was a wholesaler in the Midwest called Hill’s Floral. They had 16 wholesale houses. That was my first customer back in 1985.

Michael: At that time, how many different types of flowers were you bringing in?

Edgar: Our main flower was carnations, and then roses is second. I think we brought a variety of chrysanthemums, some tropicals. We had a good variety of product.

Michael: In Columbia, the farming of flowers, could you farm just about any type of flower there, or were there special flowers that really farmed well?

Edgar: We’re lucky in Columbia because we have different types of climate, different types of altitudes. So, basically, for carnations, roses and more traditional crops out of South America, they bring them from Savata or Bogata which is where we mentioned to you the carnations and the roses.

Michael: What were some of the challenges with a perishable item like that, and how did you overcome some of those from either spoiling in the shipment process? What did you have to do to keep those flowers fresh and perky?

Edgar: Some of the challenges at the beginning was the reliability of the airlines, the inspections because at the time the inspections were very archaic to say the least. They would poke with knives inside the boxes looking for drugs.

There was a lot of damage of the products in the inspections. The agriculture inspector teams, where the amounts were very small, the percentage that they would inspect was greater than it is today. So, when they inspected, basically, there’s a lot of bruising those flowers that were unusable.

As the volume grows, and the inspectors become more experts, and in Columbia, with increasing the effectiveness in fumigating and not having pests, by the time they got here, the inspections started becoming more systematic and more organized.

Nowadays, they have x-ray machines. The technology basically changed, and helped us tremendously.

Michael: How about as far as keeping the flowers fresh before they get to the wholesaler and the retailer?

Edgar: We will have temperature controlled coolers and facilities that did not have the technology of today, but there were some challenges in keeping the humidity levels that were needed and being constant on the temperatures, but all that has evolved.

Michael: Did you ever lose a huge load of flowers just destroyed by pests or temperature?

Edgar: Several times.

Michael: And, how can someone learn from that?

Edgar: Well, the plane got delayed or customs stopped the plane here in Miami, and the flowers cooked inside the plane. By the time we got them, it was 90 degrees.

Michael: You just had to throw them out.

Edgar: Yes, exactly, and cost us business.

Michael: How long could customs hold up the shipment?

Edgar: Well, customs at the beginning, since there was a lot of drugs being exported from Columbia, customs at the time, had intensive inspections, and the intensive inspections would take a lot of time inside the plane. Definitely you would lose your shipment.

Michael: Are all your shipments now coming by plane still?

Edgar: Everything by plane.

Michael: Everything because it would take too long to go by boat.

Edgar: Exactly, and it’s not as efficient too expedite and to clear your product as the airports are.

Michael: So, this is a different ballgame than importing by ship.

Edgar: Completely, this is very fast.

Michael: If you compared shipping freight and plane freight, how much more is plan freight?

Edgar: Probably at least five times. We have done some tests in ships coming out of Costa Rica with chrysanthemums. This worked out, but our business today is very fast, and our business today requires a lot of information and UPCs and all kinds of things because we send ready product to display.

If you bring it by ship, basically, you’re replenishing orders. It doesn’t give you the time to bring it by boat.

Michael: I understand. Tell me how did your account with Wal-Mart start? Can you talk about that?

Edgar: Wal-Mart has been a driving force in our business.

Michael: Since the last 12 years.

Edgar: Yes.

Michael: Before Wal-Mart came along, give me a picture of what the business was like.

Edgar: Basically, while we were selling to wholesalers, the business was very traditional. We would grow the flowers in South America. We imported the flowers to Miami. It was the port of entry of choice. Then, we would truck into the different wholesalers, mostly east of the Rockies that was our market because California would take care of the west.

It was traditional that the wholesalers would sell to the retail florist. That was the channel. Importers, in Miami, will sell to wholesalers around the United States, and the wholesalers would give it to the local retail stores.

Michael: When you imported them to the wholesalers, were you importing in bulk?

Edgar: Very good question.

Michael: Do the wholesalers package or do the retailers do all that?

Edgar: The retailers would put it all together. Remember how we used to get a dozen roses from a retailer?

Michael: Sure.

Edgar: The supermarket basically is ready to go. The retailer will have the bulk in a little cooler, and when you get an order, they will put it together.

Michael: That’s right, just like any flower stand on the street. They do it all. You’re importing just bulk flowers.

Edgar: Yes, and I would say in 1992, a couple of companies started going with supermarkets. It all started by selling the inferior quality flowers will go to the supermarkets. The position of the business was not in the supermarkets. It was in the wholesalers and the retail florist.

The supermarkets took this business to a new level by creating what we call today best outlet to move flowers, which is convenience. Before it was occasion driven, the only way you buy flower is if you had an anniversary, a birthday, Valentine’s Day or Mother’s Day. It was driven by occasion.

Nowadays, it’s an impulse purchase.

Michael: You walk into the supermarket. They all have flower stands. It’s the first thing you walk in front of. You think of your wife or girlfriend.

Edgar: Basically, the supermarkets changed the business.

Michael: How much growth to the industry did the supermarkets bring?

Edgar: Oh, tremendous growth. When the supermarkets come in and the mass marketers come in, it drives the prices down, but the business starts growing so we look at the business from a different dimension now. We’re looking at the business like a logistics business.

Michael: So, who were the big players in the supermarket business?

Edgar: By far, Wal-Mart, and the largest is Costco, Kroger, Albertson’s – all the large chains.

Michael: Even before you go in, right?

Edgar: Before I got into it, basically it was selected a handful of supermarkets. I will say Kroger was one of the pioneers, Albertson’s and Publix.

Michael: Were they importing or buying from the US?

Edgar: Buying from the US. It’s very difficult for a supermarket to import directly, and they need a lot of service. They need finished product. You have to have dedicated facilities. It’s a little more complicated than it sounds. Yeah, they rely on good importers that had adequate facilities in the beginning with not much, but a lot of labor intensive processes.

Now, it’s more automated. There are machines that come from Holland. There’s a lot new automatics installed in the plants nowadays. So, the business has got sophisticated some how.

Michael: You saw this trend in selling flowers to the supermarkets, and you weren’t in Wal-Mart. So, how did that come about?

Edgar: Our first supermarket account was Winn-Dixie, and we started selling rose bouquets, carnation bouquets, and a couple of mixed bouquets. Once you start developing an account, you go off to the next one, and we found ourselves working with Wal-Mart.

Michael: Were you assembling and creating bouquets at that time?

Edgar: Yes.

Michael: So, you had now a facility to do all that.

Edgar: Yeah, at the time we had a small facility, and basically supplied a handful of supermarkets.

Michael: Was it a handful or how many Winn-Dixies were you able to get into?

Edgar: Oh, no, Winn-Dixie I had probably one division that I was supplying, and each division was probably anywhere from 200-300 stores.

Michael: Were you doing delivery direct to the stores?

Edgar: No, direct to the distribution centers at the time.

Michael: Of Winn-Dixie.

Edgar: Yes.

Michael: With the bouquets and the different arrangements, whatever they ordered, and then they distributed them.

Edgar: Exactly. The business is started by manufacturing here in the United States. You bring the bulk flowers, and then you put combinations together here and then you deliver it to distribution centers.

As the business evolved and the volumes increased, we started manufacturing at farm level.

Michael: What does that mean?

Edgar: We would put combinations of flowers together at the farm.

Michael: In Columbia?

Edgar: In Columbia, and then bring it right back into America, and then convert that into a pack, process and put them in water. Get them ready for display.

Michael: That saved you money, labor, and all you had to worry about basically was distribution.

Edgar: Exactly, and that’s basically how we drive the business today and the volume business. There’s certain amounts of product, certain lines that manufacture here purposely because they have suppliers from around the world. Every country, every origin, for example, Columbia’s very good at roses, chrysanthemums and certain lines. Holland is traditionally very good at bulb plants like tulips and lilies.

Sometimes, you have to bring products from different parts. Equator is very good at roses. You bring certain things from different countries. You assemble here. That happened then. It happens today, if you want to achieve a certain look.

I would say the majority of products are assembled at farm level, but around 20-25% is assembled in the United States, still. There’s a big movement today which is the volumes are great now, large volumes, so we are trying to establish distribution centers closest to the customer.

Let’s say Chicago, we say from Chicago we can send Wisconsin, Iowa, Illinois, Indiana, Ohio. We put a distribution center in Chicago, which is a good entry port for flowers from Africa, flowers from Europe. We can bring them to Miami in truck efficiently to Chicago, put that into distribution centers there to service all that area in the Midwest.

Michael: Did you do that?

Edgar: Yes, sir.

Michael: How many distribution centers do you have?

Edgar: I have one in New York, actually in New Jersey, one in Chicago, one in Atlanta.

Michael: Are you importing from other countries now?

Edgar: Yes.

Michael: So, it all started from Columbia.

Edgar: Yes, and nowadays, it comes from everywhere. We bring them from Central America, Costa Rica, from Mexico, Guatemala, from Columbia, Equator. We bring from Peru. Basically, it’s a worldwide business.

Michael: What is your company status in the flower industry as far as importers?

Edgar: I would say we could be anywhere from number three to number five. , and number one would be Dole, Dole Flowers, but we’re right there.

Michael: What’s your competitive advantage? Why are you any better than number one, two, three and four? Is it just all the same and you just happen to be one of them? Do you offer a better distribution? Do you offer better service, better flowers?

Edgar: We’re the pioneers in this industry. That is I’ll say one of our biggest strengths, the distribution.

Michael: Is the guy you hired still with you?

Edgar: No, he stayed with me only five years.

Michael: Oh, he stayed with you for about five years.

Edgar: Yes, in 1990, we parted ways, but I learned this industry from you, the wholesale side of the business.

Michael: Did you bring in any more expertise?

Edgar: Oh, yeah, I pride myself in having the best team in the industry.

Michael: You did something very smart. You didn’t try and learn it on your own. You bought expertise to teach it to you.

Edgar: Always.

Michael: Is this a good philosophy that you would tell anyone?

Edgar: Yes, I would always emphasize surround yourself with the best.

Michael: You had the money and you hired the best team.

Edgar: Basically, you have to find a balance, and what you bring in are the right kind. You can bring in stars, but you don’t have the business to use the talent of a start. So, you have to combine your size business to the talent that you bring in so that you can exploit the potential.

Michael: When you bring in by ship, you bring in by container loads. How does it work by plane? What’s the measurement?

Edgar: Plane loads basically.

Michael: How many container loads would equal a plane load?

Edgar: We bring what we call a master pack – a four box equivalent. You can bring it in a 747. You can bring close to 6,000 master packs. A master pack will contain around 300 roses. It will contain about 600 carnations. It will contain 400 stems of mums. That is by type of flower. The size of a master pack will be 41 inches length by 20 inches width by about 7 inches high.

Michael: When you pay for that, what’s the payment?

Edgar: By kilogram.

Michael: By kilo, okay.

Edgar: By kilogram, let’s say the box weighs about 18 kilograms, and then you pay the multiplier for that kilogram. That varies. Today it is very expensive because of fuel.

Michael: Let’s go back to Wal-Mart. Let’s talk about how you first got your leg in the door with Wal-Mart. You were already selling to Winn-Dixie and some of the grocery store chains. At that time, did you have any distribution centers set up except the one in Miami?

Edgar: Basically, Wal-Mart started the business with dry pack flowers.

Michael: What’s a dry pack flower?

Edgar: Instead of redi-case display, it will be dry pack, and we will ship it via FedEx, and they will there. Remember, at the time, Wal-Mart had more division one stores than Super Centers.

Michael: Division one is just a basic store.

Edgar: Basic, the format that Wal-Mart started.

Michael: Can you explain what a dry pack is for anyone?

Edgar: A dry pack is flowers in a box without water.

Michael: Like a bulk box, right?

Edgar: A bulk box, but you’ve got finished products. You have bouquets already finished, what we call the dry pack box. Then the wet pack box is ready to be displayed in the buckets with water and solutions.

When Wal-Mart started the business by cutting bouquets at the stores, and put them in water. It was very difficult because, again, you create a mess at the stores. You have the associates dealing with water and dealing with issues that they’re not experts in – processing flowers.

Again, it’s not the ideal situation, but that’s how the business started.

Michael: That’s how they were doing before you came along.

Edgar: That’s how we started the business with Wal-Mart.

Michael: Before we get to that, let’s talk about how you got into Wal-Mart, that process. How did it originate? This is what the listeners definitely want to know about.

Edgar: Wal-Mart basically is a very fair company. They give opportunity to everybody.

Michael: Did you approach Wal-Mart?

Edgar: Yes, the opening of the Wal-Mart store, basically was by coincidence. There was a company in Texas that was talking about Wal-Mart. They approached several people in Miami to investigate about the flower business, how they can get into flowers.

There were some tests going through this company, a company in Texas that has some relationship with Wal-Mart. We started toying with the programs and fine-tuning what would be the best way until we found to FedEx into their store was the way.

When the business started, we had a relationship with the company that already had a relationship there, but as the business grew, we got closer to Wal-Mart, and we started developing programs that make more sense for the stores.

Michael: What was the business’s relationship with Wal-Mart before they investigated flowers? Were they in Wal-Mart already?

Edgar: Yes, they were in Wal-Mart already.

Michael: What were they selling?

Edgar: They were selling potted products, potted plants, lawn and garden.

Michael: They had a relationship and they had been selling already.

Edgar: Yes.

Michael: They were looking to expand into flowers and they were looking for a supplier.

Edgar: Yes.

Michael: So, they approached you, and you guys worked it out together.

Edgar: Exactly. Then, three or four suppliers out of Miami started doing tests with Wal-Mart, and those were one of our companies. It was very slow at the beginning because clearly you have to do a lot of tests. You have to do a lot of work with the stores to make sure that the store’s buying into the program. There was basically no support. It was a struggle in the beginning.

Michael: Can you describe how slow it is? Before we get to that, just for the listeners, if they want to get their product into Wal-Mart, you didn’t have to hassle with flying over to Bentonville and interviewing. You bypassed that by using someone who already had the relationship, who already had a similar type product, and then, how did that technically work? Would they buy from you and get paid? How did you work that out?

Edgar: That was an intimidation (?) at the beginning. It stayed like that for two or three years.

Michael: Did that work well?

Edgar: Well, it worked well yes for the most part because the volumes were moderate, and we were both learning. They had more understanding of what Wal-Mart requirements were, and we were just a flower company learning the business.

As the business started growing, there were mostly promotions being done. Instead of everyday business, we took advantage of Valentine’s and Mother’s Day because that was one time that people pay attention to flowers.

Michael: How did you take advantage of that? Who did the promotions, the Wal-Marts?

Edgar: Wal-Mart, exactly.

Michael: They would pay for the promotions?

Edgar: Yes, but promotions mean focusing on words that demand. If you take a Valentine’s Day, there’s always demand involved there for products. Mother’s Day is the same thing. It’s not difficult to sell the product those two times.

If you drive business through those areas, you start getting the approval of the associates and the people start becoming believes in the business. It really sells. Then, you get stores who want to continue with the program so you will support those stores, word of mouth around the stores, and the Wal-Mart buyer in the category.

Michael: Wal-Mart was developing an expert in the category since it was an all new category.

Edgar: Exactly, like everything, you go present the program. They test it. They see how it works. They see the pros, the cons, and they start working towards making it a category that’s going to stay.

Michael: You were charting new territory with the flower business in Wal-Mart.

Edgar: Absolutely. We went into the supermarket at the beginning, it was uncharted territory. For the supermarket and for us, with that relationship.

Michael: So, the challenges with shipping and the dry and the wet packs and Wal-Mart assembling, that became a problem. How did you overcome that challenge and make it more streamline for Wal-Mart?

Edgar: Clearly when the business started taking shape, we made the decision that we had to go to wet pack, had the product in water and to leave it in water so the associates didn’t have to process the product. That’s really when the business changed, but it changed for the whole industry because they don’t have the manpower at store level to deal with processing product.

The businesses started getting serious. They gave us square foot. The supermarkets starting buying refrigerator display units, so that’s when the businesses really started getting serious. The supply started to go up. The division in the supermarkets were going to play a big role in the industry. So, quickly, by 1995, the flower business was full-blown with the supermarkets.

Then in 1997, there was a consolidation in the industry.

Michael: What happened?

Edgar: Bowl Fresh came into the business, three large companies and another group from Washington, DC came into the group and bought like 34 companies and consolidated into one name called USA Floral Products.

Michael: How did that affect you?

Edgar: I sold my company to USA Floral Products. That happened in late 1997. We basically became part of a large conglomerate that basically was about a billion dollars in sales of flowers. Wal-Mart being a very important customer of that, and basically the company had an international position in Europe called Floral Max. It has a wholesale division that had about 25-27 wholesalers around the nation, and about 12 or 15 importers in Miami.

That company basically stayed active for about three years, and in 2001, the company couldn’t continue.

Michael: Is this USA Floral or the international division?

Edgar: USA Floral basically was sold back to a majority of the owners.

Michael: What happened? Were they losing money?

Edgar: Losing money by bundles.

Michael: Do you know why?

Edgar: There were a lot of efforts in trying to change the industry too quick, too fast, and they left a lot of things half done, and those things came back to really destroy the company.

Michael: So, what happened with you? They bought you out, and then what did they do once the company was losing money?

Edgar: We were part of the USA Floral products. We were lucky enough to have the opportunity to put all the bouquet companies together. There were five companies in the group. One of the companies, the other ones were sold.

Then, in that consolidation emerged at the time what was called the USA Floral Bouquet division that deals strictly with the supermarkets.

Michael: So, that is your forte, mainly the supermarkets.

Edgar: It became my forte.

Michael: And, bouquet is a simply they bouquet is already done.

Edgar: Yes, in March 2001, USA Floral Products, the company went into Chapter 11 with hopes to sell different divisions – the wholesale division, the international division, and the import division – to the same people who were interested in buying the company because they were going to be dissolved.

Michael: And, you bought it.

Edgar: We bought.

Michael: Did you get a good deal?

Edgar: We got a good deal.

Michael: Let me ask you this. When they offered to buy, was it just too good to pass up, or did you have some concerns that they might put you out of business?

Edgar: We worked so hard for so many years, and you don’t want to give that up. There was an opportunity to buy a lot more than we sold. As a businessman, you just seek out opportunities and you go after them. Of course, there was some risk involved. We were able to put together one of the better teams because we got the best of the five companies that were basically leaders in the bouquet business.

Michael: What’s it like working with Wal-Mart? Are they easy to deal with?

Edgar: Extremely organized.

Michael: Who do you deal with on a daily or weekly or monthly basis at Wal-Mart?

Edgar: We have in our company the account manager, and that account manager has a team. Basically, the team is formed by category advisors, by analysts, retailing specialists, and by operations people.

Michael: Is this it’s own category, flowers?

Edgar: Yes, it’s part of produce in Wal-Mart, but it’s produce and floral. We sell under produce because of the perishable side of the business, but there’s a little slash and puts floral because we’re very different than produce. You can not eat the flowers. You’re not suppose to. You can eat them, but you’re not suppose to.

We formed on the produce, but we are in a category within the company.

Michael: So, this is Wal-Mart’s team.

Edgar: No, this is my team.

Michael: You have your own team just for Wal-Mart. Go over the team.

Edgar: The team is composed of an account manager, then basically a retail link specialist, analyst, category advisors, sales support team and operations manager.

Michael: You brought in all this expertise.

Edgar: We built that expertise.

Michael: You built this from the ground up.

Edgar: Yes. We have an excellent team dealing with Wal-Mart. We brought ourselves to understand what Wal-Mart needs and to cater to those.

Michael: What would you tell an importer or someone who’s thinking about supplying Wal-Mart? Is there any advice on how to work with them, what they can expect, and what you can expect as a supplier to them?

Edgar: I can summarize it in two words – underpromise and overachieve.

Michael: They like that?

Edgar: It’s their motto.

Michael: That’s their motto?

Edgar: It’s their motto. It’s what they expect. Don’t promise what you can’t deliver.

Michael: You better be able to do what you say, or you’re out of there.

Edgar: You’re out of there. You really have to deliver results.

Michael: Who dictates the terms? Do you dictate the terms, or do they dictate the terms?

Edgar: They dictate the terms.

Michael: Would you say that’s probably across the board for anyone that wants to sell to Wal-Mart?

Edgar: They basically know their business very well. They’re a retail business, and the information that they provide is second to none. So, as we know the sales of our products within their stores, We know what’s selling. We know what’s not selling.

We have access to talk to the people in replenishment. See how the stores need to be replenished. We have a lot of information to be able to make the right decisions.

Michael: You’re hooked into a network. You know exactly entire inventories across your accounts in Wal-Mart, how much is in there. That’s all integrated online.

Edgar: Yes, through a retail link.

Michael: Let’s go back to the transition when that company with the plants, you started and you were basically selling to him and he was going into Wal-Mart. Where did that end, and how did you become the main account for Wal-Mart?

Edgar: One of the companies that we have in the group, basically was the pioneer into this. So, it’s a transition that you go back and you say, “How do I end up here?” The relationship was with that company.

When we got all together, it became our relationship, but we were supplying all the time to that company. So, we were already doing it, but we weren’t officially the vendor. Do you understand?

Michael: Yes.

Edgar: So, we didn’t feel the transition.

Michael: Can you tell me what does the company look like now? How many Wal-Marts are you in right now?

Edgar: We’re in distribution centers. It gives us about 900 stores that we service.

Michael: You’re servicing 900 stores.

Edgar: Yes 900 stores east of the Rockies. In some cases, we go to Nebraska. If we’re doing a promotion, we cross over to the west, depending on the promotions.

Michael: Who’s got the west of the Rockies?

Edgar: Competitors. It’s divided into basically four main suppliers.

Michael: Wal-Mart doesn’t want to put all their eggs in one basket.

Edgar: We wouldn’t want to do that.

Michael: With an item like this, I’m sure that you’re not waiting six months for your money like other companies with hard goods. How long do you have to wait to be paid?

Edgar: Wal-Mart pays very well.

Michael: As long as you follow directions.

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Edgar: Exactly. Some of the companies that criticize Wal-Mart does not pay the bills. It’s not Wal-Mart. It’s that sometimes companies don’t know how to bill Wal-Mart. Once you bill correctly, everything is automated. We don’t bill Wal-Mart with hard copies. We bill Wal-Mart electronically, UDI. So, it’s very good. You can’t ask for a better customer in that respect.

Michael: What happens with fluctuating prices on the international market? Is there fluctuation in cost internationally?

Edgar: You have to present to Wal-Mart a very consistent program. Those fluctuations and those things you have to keep them to yourself, work them out.

Michael: They’re not interested in your problems.

Edgar: They’re not interested, and you shouldn’t present your problems to Wal-Mart. You should present solutions. That’s another thing. You don’t go to Wal-Mart with your problems. You go to Wal-Mart with solutions for them.

Michael: So, your innovations with the wet packs to the grocery end of it, did your competitors do that as well?

Edgar: Oh, yes, everything in this industry, understanding that we needed to move towards more friendly packs for the stores.

Michael: What other innovations are you developing for the industry within the grocery side? Do you see any additional trends?

Edgar: E-commerce, we will supply Walmart.com. We supply a lot of the people that sell flowers in the e-commerce on the internet.

Michael: How is the e-commerce side?

Edgar: It’s good. We do quite a bit of business with them on the e-commerce side.

Michael: Do they handle the shipping? Are you going right to the distribution centers?

Edgar: We go directly to the consumer.

Michael: You’re handling all the shipments directly to the consumers.

Edgar: You go to WalMart.com, and you buy the flowers there and we ship them, and you have them at your house. We communicate with them electronically. There’s a lot of technology involved to work with Wal-Mart.

Michael: Is the only option for distribution going right to there DCs? Are there any companies supplying Wal-Mart that aren’t using their traditional distribution centers?

Edgar: Yes, we do. Every holidays and promotions we deliver directly to the stores.

Michael: You do?

Edgar: Yes, we do. For example, for Mother’s Day, we deliver practically somewhere near 25 states for the division one stores, the ones that do not have perishable distribution centers.

Michael: What kind of sales force do you have nationally on that? I guess it’s not a sales force.

Edgar: It’s logistics. Basically we created routes, and we deliver stores. We have windows to deliver 24 hours during Valentine’s and Mother’s Day. Some of the stores that are open 24 hours, we have that window. So we create routes based on the volumes at stores. We create routes during a specific attraction, or within a span of three of four days, we deliver to all the stores in the country. You’re talking about 200 trucks.

Michael: What holiday produces more sales in flowers than any other holiday?

Edgar: In the sense of revenue, dollars, Valentine’s Day – units, Mother’s Day.

Michael: Mother’s Day volume, dollars Valentine’s. Is that because of the roses?

Edgar: It’s because of the roses on Valentines, exactly.

Michael: The prices are always higher on Valentine’s Day.

Edgar: The demand s so high and we put the growers so much, that the only way we can afford to do it as an industry is the prices are higher because a lot goes into it. There’s a lot of production. You go into overtime. It costs a lot of money to really get ready for Valentines.

Michael: How do you handle the supply end of it? What challenges do you face on making sure that you have supply coming?

Edgar: The growers are pretty good, pretty serious, and we’ve been working with for years 15-18 years, a guy from my family in the business. They’re suppliers.

Michael: Your family back in Columbia?

Edgar: Yes, my sister, my brother-in-law.

Michael: You’ve got family involved in the whole thing.

Edgar: Yes, the only one who is not involved is my father and my mother.

Michael: Tell me a little bit more about your native country of Columbia – opportunities, risks, especially why they call Columbia the capital of flowers.

Edgar: Columbia has come a long way. We’ve had some share of troubles. The influence of the drug trades is not only a bad reputation, but a lot of internal problems, but I think Columbia with a new president, and we have come a long way. The community is much better. The guerillas have lost a lot of ground to the new government. It’s a more secure place. It’s a much better place to live in nowadays.

Michael: What kind of trade agreements does Columbia have with the United States? Is it free trade with Columbia?

Edgar: We’re working on the free trade agreement. It’s been approved, but it has not been signed. We hope that it will be signed by the end of the year.

Michael: What kind of tariffs are there bringing products into Columbia?

Edgar: Flowers right now, they are under the treaty agreement which there’s no duties.

Michael: What’s that agreement called?

Edgar: The Indian treaty. The end, like the mountains. It’s in effect, and there’s no duties here. It used to be about 7.5 to 8 percent duties. So, through that treaty we have no duties basically.

Michael: How do you like the title the Latin King of Flowers?

Edgar: I don’t like it. The intentions are good, but I was pretty embarrassed by the title.

Michael: That’s funny. Can you talk about flowers for hours or days, or is flowers just a vehicle to your passion which is business?

Edgar: I love the business. I love the industry. I love the product. I love what it means. I love what it does for people. I’m very happy and very lucky to be in this industry. I consider it a very good industry of good people. So, I consider that it has a lot of potential for growth.

Michael: What other buyers and clients do you have besides Wal-Mart?

Edgar: We have a lot of clients. We deal with most of the supermarkets around the country. We deal with Safeway. We deal with Publix. We deal with Andersons. We deal with Eckerds, 7/11. We put flowers everywhere.

Michael: Is dealing with individual companies – is it always a different experience?

Edgar: It is different. We have a philosophy in the company. We visit our customer with a clean sheet of paper, and we start from zero. We have no preconceptions towards our customers.

Michael: Do you have category managers for different companies? Everyone’s an expert in different things.

Edgar: Everyone is an expert. Every customer has his – we don’t deal with small customers. All of our customers are very large .The potential is huge. So, what we do is we dedicate key – we built a little team around the customer without spending resources when the business is not there, but we initially set up somebody accountable for the customer needs. We want to make sure that every client feels that he’s the most important client.

Michael: How many employees do you have?

Edgar: Right now in the slow season, we have 600 or so, and in the high pick seasons we get up to 1,200 or 1,300 here in the stats, not counting what we have in South America.

Michael: What’s your typical day like?

Edgar: A typical day is we start early in the morning, see my daily reports. We have a couple of indicators that we manage daily. Then, by eleven o’clock in the morning, we start our meetings. We have several meetings in the day, the morning we use it for internal business, and the afternoon is dedicated to all the things – future things.

My goal is basically to open channels for the company to look ahead. I’m not in touch too much with the day to day anymore.

Michael: Are you focusing on any innovative marketing techniques to move more flowers within the retail establishments?

Edgar: Yes, basically packaging is a big passion that I have. Innovating the packaging and basically logistics – the process, the internal process and the external logistics of the company, I am very much involved.

Michael: Have you seen packaging increase sales?

Edgar: Oh, yes, definitely. We focus on quality. The quality of our products has to be the best out there.

Michael: When you walked in, I mean even from my experience, if I’m going to buy a bouquet of flowers for my wife, you’re looking through those bouquets for the most beautiful one.

Edgar: Absolutely, and we have to give you options. Everytime a bucket goes, you have to have the right assortment. You have to have the right quality, the right seasonal colors. We pride ourselves that we have very market agreement.

Michael: This market research is documented what sells best, right?

Edgar: Of course. We have a lot of research, and we do focus groups to understand what the consumer wants. We do studies, demographics.

Michael: What happens when there’s product that just doesn’t sell and it perishes? Do you have to eat it, take it back?

Edgar: We’ll take it back.

Michael: Is that the terms with most of these mass merchandisers, if you’re shipping stuff that doesn’t sell? What’s the agreement on that?

Edgar: Well, it depends because basically we’re not going to ship anything that is put together. We make sure that everything is inspected properly, but we have different agreements with different customers.

Michael: How about with Wal-Mart? What’s the agreement with them?

Edgar: We sell them product, but we’re responsible for certain indicators like margins, and we’re responsible for giving them a profit. We want to make sure that Wal-Mart is profitable in the category. We want them to be insistent in the category. We don’t want them to be disappointed with the category.

Michael: Is it a profitable category for them?

Edgar: Yes.

Michael: Very profitable.

Edgar: I don’t know how it compares to other categories, but I think they’re happy with it.

Michael: How about compared to the plants and stuff?

Edgar: I would say flowers is a better business.

Michael: Flowers is better business. So, will Wal-Mart ship product back to you that doesn’t move?

Edgar: No, basically they dispose of it and mark it down as disposed. That is pre-planned. It’s in the model, we just monitor that it doesn’t go over what we already pre-planned for.

Michael: So, marking it down, is it an effective way to liquidate it and get rid of it?

Edgar: Yes, they sit them on a display. They need to make the cases attractive. So, you’re always going to have some. I believe if you don’t throw away some, you’re missing sales. It’s part of the business to throw away some. It’s a perishable item.

Michael: Are they open to ideas for better marketing?

Edgar: Absolutely.

Michael: Who do you present ideas to?

Edgar: To the buyers. They’re the group of people that we work very closely with.

Michael: Will they try stuff out?

Edgar: Oh, yeah, absolutely. They love to try stuff out. The off season, that company will just deal with Wal-Mart on a day to day basis.

Michael: You have an office in Bentonville.

Edgar: Absolutely.

Michael: What are they dealing with daily with them?

Edgar: With replenishment, restocking the stores. We deal in the programs. We deal with analysis that we have to do for them, and we have a category advisor that works with them on the planning on future promotions and future holidays.

Michael: Did you ever met Sam Walton?

Edgar: No, unfortunately, no, I didn’t, but I did meet the wife, and I’ve seen some of the sons in Bentonville. It’s an incredible company.

Michael: What do you think sets Wal-Mart apart from all the other mass retailers you’re dealing with?

Edgar: Their associates.

Michael: Their people.

Edgar: Yes, they’re incredible, and the dedication is incredible – how they handle themselves. It’s from the top management. They’re very humble people. The CEO of Wal-Mart is almost like a regular guy being one of the most important executives in the country. He probably is the most important. It is the largest company in the world.

Michael: What would you say to people out there who want to get involved in international trading business from scratch and to be successful like what you’ve achieved so far? What kind of advice would you give these people out there?

Edgar: One of the things when you dealing so many variables and things that are out of your control, you’ve got to stay focused and have patience, and build the model that can deal with those things. Don’t build your model that any hiccup can destroy. Build safety nets around your model. That’s our philosophy. Our model has to be strong enough that can sustain all kinds of problems because when you deal with perishables, you deal with third world countries, and you deal with government agencies. That’s a recipe for disaster.

Michael: You’ve got a very complex business.

Edgar: Then, we deal with nature from the other end and the weather changes around the world. There’s a lot of variables that you have to have plan B and C because your customer always gets the delivery, 100%.

Michael: The early days when you were really getting established, what kind of hours were you putting into your work?

Edgar: Incredible hours – seven days a week sometimes. The executives of the company, we all work 18 to 20 hours a day. We make it a rule now. We sleep at least four hours.

Michael: Are you married with children?

Edgar: Yes, I have two beautiful kids.

Michael: How do you negotiate with your partner, your wife, with the long hours?

Edgar: We’re lucky enough these days to have technology, and technology makes us a lot more efficient. For example, I don’t know if you heard about the Blackberry.

Michael: Yes, they’re wonderful.

Edgar: They’re wonderful tools that keep you in touch with your work. So, while you’re vacationing, you can still be reachable and you can answer questions, and you can expedite a decision anywhere you are. So, technology is making it very easy for us to stay in touch with our business.

Michael: Do you have any other hobbies?

Edgar: Yes, I do ski a lot – water and snow, and we love boating. We live in South Florida, so that’s one thing that keeps the family together.

Michael: Very good. How about the hurricane season coming up? Is that something that concerns you?

Edgar: We always have contingency plans because our customers need to get deliveries. So, we have other plans to pick up the slack. Locally, the hurricane season is starting out in a slow period. We overcome it because we can move to our Atlanta facility to help with the distributions while we’re shut down here.

We have back-up generators here in Miami that in any event, we can still preserve the product.

Michael: What kind of future plans do you see for your self and the industry in the next five years?

Edgar: Expansion, continual expansion around the country. We’re moving west now, looking at Texas, Dallas in particular. We’re looking at Denver, Colorado, and we’re looking at California.

Michael: Expansion means more plants.

Edgar: More distribution centers.

Michael: What’s currently the volume per year?

Edgar: The volume in dollars the company moves is between $220 and $230 million. That’s the target for this year. We have four different companies that are responsibly taking care of disinfectants of the industry. We have e-commerce division. We have the mass market/supermarket division. We have the retail florists division, and we have the service division, the service importers.

We have additional capacity that we sell to third parties, people who want us to reach us so one of us is in logistics. We got pretty good at it. So, we have additional capacity that we outsource to others.

Michael: How about the e-commerce division? Do you see the numbers going up on internet sales?

Edgar: Yes, triple digits every year.

Michael: They’re increasing triple digits.

Edgar: Yes.

Michael: That’s going to be a huge business.

Edgar: It’s a difficult business with logistics. Valentine’s and Mother’s Day are huge. So, that makes it very difficult because you have to outsource a lot of infrastructure.

Michael: How about the seed business, flower seeds? Is that something you’ve ever considered?

Edgar: We haven’t got into that, but we have very good relationships with them, breeders. We have to stay in touch with the varieties that are coming in, better shelf life, what color. We’re looking for larger head size, larger bloom size. We’re looking to improve what we have coming from these. So, we work very closely with the breeders. Most of them are in Holland. So, that gives us the ability to see what’s coming and what’s not so we can advise the growers what to go into or what not to go into.

Michael: You are a minority business?

Edgar: Yes, we are certified as a minority business. We have a category called minority woman business.

Michael: Minority woman business, how did you get that category, and how did that help you get in?

Edgar: First we started because we wanted to do business with a lot of governments here. So, we got certified as a minority business by the city of Miami, and we moved into the county. From the county, we moved to the state. Then, this association basically most of the large companies around the world promote to help minority business approach this. They saw we were worth it, so we became a minority owned firm.

Michael: Did that give you an advantage of getting in?

Edgar: I don’t know, but let me tell you, it will come in handy because everybody wants to be a community partner, and working with minority business gives them basically that status that they work with minorities, communities.

Michael: Wal-Mart has programs. They want to work with minorities.

Edgar: Yes, as a matter of fact, I was issued one of their fliers where they’re coming to the partners.

Michael: What do you think their advantage to work with minority business, to look good to the community?

Edgar: To be more friendly to the community because for instance this is heavily influence Latino community Miami, and then for them to see that one of their peers is successful working with them is an advantage. You feel you belong there. That Wal-Mart supports the Latinos.

It is an advantage, but we don’t use it that way, but I think it is. That’s why we went for the certification. It puts us in front of a lot of good companies. We go to the shows, and basically every worthwhile company. We got a couple of little programs out there that we want to launch for corporate advance and stuff like that.

For example, we have a program that’s called, Sticking Roses. We can endorse anything through laser technology, anything that you want on a rose.

Michael: You’re embossing them right on the rose?

Edgar: Yes.

Michael: On the petal?

Edgar: On the petal.

Michael: You’re kidding.

Edgar: It’s beautiful. I can put a picture. For example, if it’s your wife’s birthday, I can write whatever you want on a petal of a rose and on the next rose, I can put her picture, on the next rose, I can put anything.

Michael: How fast are these machines able to do that?

Edgar: Oh, very fast.

Michael: Are you doing those in your plant?

Edgar: Yes.

Michael: Are other companies doing it too?

Edgar: No, we’re the only company. Basically we work very closely with the owner of the license.

Michael: Do you have an exclusive on it?

Edgar: Yes, we’ve had an exclusive for a while.

Michael: Have you tested them?

Edgar: Oh yeah, it’s a good program. It you go to FTD.com, they’re there.

Michael: Are you supplying FTD?

Edgar: Yes.

Michael: Wow, that’s incredible. This has been incredible. What an experience and honor to be able to interview you.

Edgar: My pleasure.

Michael: You’ve been so forthcoming, and my listeners are going to love this.

That’s the end of this interview with Edgar.

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