WEBVTT - Inflation Creates Thorny Issue for Valentine's Day 0:00:00.080 --> 0:00:03.320 You're listening to Bloomberg Business Week with Carol Messer and 0:00:03.400 --> 0:00:07.280 Tim Stenavic on Bloomberg Radio. As you know, Mike, you 0:00:07.280 --> 0:00:12.800 know Valentine's Days next week. Bet you're right now. Well, 0:00:12.840 --> 0:00:14.680 that day, along with Mother's Day, are two of the 0:00:14.680 --> 0:00:16.840 biggest for the flower industry, which is why we wanted 0:00:16.880 --> 0:00:19.680 to check in once again with Christina stanbl founder and 0:00:19.760 --> 0:00:22.640 CEO farm Girl Flowers. She joins us in our Bloomberg 0:00:22.640 --> 0:00:25.239 Interactive Broker studio based on the West Coast, but here 0:00:25.280 --> 0:00:27.480 in New York. So great to have you here. How 0:00:27.520 --> 0:00:29.800 are you. I'm good. Thanks for having me back. It's 0:00:29.840 --> 0:00:32.240 it's great to be in person this time. It's so great. 0:00:32.400 --> 0:00:35.320 I mean, we've talked to you like throughout the pandemic. Um, 0:00:35.360 --> 0:00:37.280 how does the world feel. Does it feel like we 0:00:37.320 --> 0:00:40.680 are over the pandemic? Compass your world sort of? I 0:00:40.680 --> 0:00:43.040 mean I feel that there's residual effects that are still like, 0:00:43.360 --> 0:00:46.120 you know, impacting supply chain and transportation and things like that. 0:00:46.159 --> 0:00:48.920 But really I think we're holding onto, you know, getting 0:00:48.960 --> 0:00:51.279 as much money as you possibly can in those areas, 0:00:51.360 --> 0:00:53.639 and you know, costs, you know, costners have not come 0:00:53.680 --> 0:00:56.080 down yet. Um, so I think that will normally next 0:00:56.080 --> 0:00:58.120 twelve months come down at all a little bit, but 0:00:58.200 --> 0:01:00.200 definitely not where we were hoping to see the um. 0:01:00.200 --> 0:01:01.880 So I think that this this next year is going 0:01:01.920 --> 0:01:05.080 to be really transformative that way and kind of normalize 0:01:05.080 --> 0:01:08.440 a little bit more sun. Like J Powell, that's what's maybe. Yeah, 0:01:08.520 --> 0:01:15.920 well he was saying, maybe it's wishful things, you know, Christine, 0:01:15.920 --> 0:01:19.120 It's funny. I'm here. I'm a father, husband, father of 0:01:19.200 --> 0:01:21.920 three girls, so I've got certain occasions where I buy 0:01:21.920 --> 0:01:24.920 flowers right once when I get in trouble. Obviously you 0:01:24.959 --> 0:01:31.280 know which. So we we're reading those cards. The other 0:01:31.600 --> 0:01:34.280 is Valentine's Day and the other was you know those 0:01:34.360 --> 0:01:37.200 daddy daughter dances that all got canceled during the pandemic. 0:01:37.240 --> 0:01:41.200 So I missed your visitor in the pandemic days. How 0:01:41.240 --> 0:01:43.280 bad was it? Did you lose a lot of suppliers? 0:01:43.319 --> 0:01:45.840 I mean, I feel like the flower industry especially must 0:01:45.840 --> 0:01:50.080 have been really hard hit. Yeah it was. We actually benefited, though, 0:01:50.080 --> 0:01:51.680 I have to say, and I felt a little smarmy 0:01:51.720 --> 0:01:54.200 even saying that early on. I mean the gifting segment 0:01:54.240 --> 0:01:56.720 in general, and we were definitely in that that space 0:01:57.080 --> 0:01:59.880 really benefit from the pandemic. Because everybody were sending gifts 0:01:59.880 --> 0:02:03.160 and that have been in person, but that flowers, Yeah, 0:02:03.680 --> 0:02:06.520 thank you. But what that did was it created you know, 0:02:06.640 --> 0:02:09.040 we all had to build infrastructures that we couldn't support 0:02:09.120 --> 0:02:11.760 later on. So you know, we you know, turned off 0:02:11.800 --> 0:02:13.600 marketing and you know, for ten and a half months, 0:02:13.639 --> 0:02:16.080 we just turned it off and we still did a growth, 0:02:16.360 --> 0:02:18.600 you know, and and then one came and I always said, 0:02:18.800 --> 0:02:23.040 oh no, when vaccines become readily available, I don't know 0:02:23.120 --> 0:02:24.680 what's going to happen. I know something big is going 0:02:24.720 --> 0:02:26.080 to happen, but I don't know how big it's going 0:02:26.120 --> 0:02:28.520 to be. And we just built this infrastructure, you know, 0:02:28.639 --> 0:02:30.520 that we couldn't support any longer. And so then we 0:02:30.560 --> 0:02:32.360 had to rethink everything and be like, oh, you know, 0:02:32.760 --> 0:02:34.880 now we have to right size the business, which is 0:02:34.919 --> 0:02:36.800 like the dreaded word right And so then we had 0:02:36.840 --> 0:02:39.720 to do that. And then you know, last year everybody thought, Okay, 0:02:39.760 --> 0:02:43.280 it's over, and it's like I can't wait till it's 0:02:43.320 --> 0:02:45.840 finally going to be over. Nope, not over, huh nope. 0:02:45.880 --> 0:02:48.359 So then you know, we have like transportation costs that 0:02:48.400 --> 0:02:50.320 are like you know, all the ancillary fees on top 0:02:50.320 --> 0:02:52.079 of ancillary fees on top of anceller fees, and we 0:02:52.120 --> 0:02:53.920 have like containers that can't get there, and you know, 0:02:53.960 --> 0:02:56.239 flowers they can't get there on time, and flowers and 0:02:56.400 --> 0:02:58.000 number one thing you have to get them there quickly, 0:02:58.240 --> 0:02:59.640 and so not be able to get them there quickly. 0:02:59.680 --> 0:03:01.840 You know, we had one month where like over half 0:03:01.840 --> 0:03:03.680 of our orders weren't delivered on time and it resulted 0:03:03.680 --> 0:03:06.160 in like five and a half million dollars of losses. 0:03:06.200 --> 0:03:08.320 And I mean things like that was just constant. And 0:03:08.360 --> 0:03:09.760 so this year we're like, you know, now we're in 0:03:09.800 --> 0:03:11.520 a down economy and I'm like, oh my gosh, this 0:03:11.520 --> 0:03:14.360 this ever going to really end. I don't know how 0:03:14.400 --> 0:03:16.960 it feel to own a business that's great. Everybody should 0:03:17.000 --> 0:03:19.239 do it well, I'll say, as when you're a husband 0:03:19.240 --> 0:03:22.640 in trouble, those delays are no good. You need it 0:03:22.680 --> 0:03:26.080 like you need it like yesterday for that because did 0:03:26.040 --> 0:03:28.120 you go back to some of the inflationary pressures. Because 0:03:28.160 --> 0:03:31.560 this is something we talked with um, a person in 0:03:31.600 --> 0:03:34.320 the trucking industry. We're trying to really get a good feel. 0:03:34.840 --> 0:03:37.119 We've talked with chefs and while things have come down, 0:03:37.120 --> 0:03:39.560 they do talk a lot about labor costs still are 0:03:39.600 --> 0:03:42.360 pretty high. Um, you said they've come down a little bit, 0:03:42.440 --> 0:03:46.040 but it's still your supply chain. It's still kind of expensive. Yeah. 0:03:46.080 --> 0:03:47.960 I mean, we're at the size of a company that 0:03:48.000 --> 0:03:49.640 we don't have the buying power that a lot of 0:03:49.680 --> 0:03:51.760 large companies have, and so I'm sure that they're they're 0:03:51.760 --> 0:03:54.120 seeing it come down much quicker than companies, you know, 0:03:54.240 --> 0:03:57.600 the medium size small medium companies are just really you know, 0:03:57.680 --> 0:03:59.640 the last ones to see those savings because we can't 0:03:59.640 --> 0:04:02.000 go and say we have you know, two hundred million 0:04:02.000 --> 0:04:04.840 dollars of buying power, you know, and go to the 0:04:04.880 --> 0:04:07.760 transmiracition companies that way. But so it's coming, but then 0:04:07.800 --> 0:04:10.520 it's also being offset by higher labor costs and things 0:04:10.560 --> 0:04:12.440 like that. So it's just, you know, we want to 0:04:12.480 --> 0:04:14.440 be able to to show our customers and have our 0:04:14.440 --> 0:04:16.600 customers realize these savings. And every time we think we're 0:04:16.640 --> 0:04:19.240 going to be able to lower our prices again, it's not. 0:04:19.360 --> 0:04:21.800 Then it's just you know, we're dipping into our margins again. 0:04:21.880 --> 0:04:24.640 Can you find all the workers you need and want? No? 0:04:24.839 --> 0:04:28.000 Absolutely not. So. Um, you know, we've been very creative 0:04:28.000 --> 0:04:30.720 about how we do that, you know, with partnerships, with farms, 0:04:31.240 --> 0:04:33.800 um that are drop shipping for us and things like that. Um, 0:04:33.839 --> 0:04:37.080 it's just, you know, it's really hard. Wage level employee, 0:04:37.080 --> 0:04:39.039 you know, labor is really hard in the United States 0:04:39.160 --> 0:04:41.679 right now. Does it feel like we're at the beginning 0:04:41.720 --> 0:04:43.600 of a down economy and you mentioned, you know, you're 0:04:43.760 --> 0:04:45.719 prepping for down economy? Is it's starting to feel like 0:04:45.720 --> 0:04:47.520 that for you for it's felt that way for a 0:04:47.520 --> 0:04:49.880 while now. I think we've you know, I definitely think 0:04:49.880 --> 0:04:51.760 that we've been there for a while and nobody wants 0:04:51.760 --> 0:04:55.000 to actually call us spade a spade because demand is less. Yeah, 0:04:55.040 --> 0:04:57.760 demand is far less. Demand is far less. I mean, 0:04:57.839 --> 0:05:00.000 you know, we're discretionary. I mean, like it, flowers our 0:05:00.040 --> 0:05:02.800 not a necessity. Um, even you know, food seems even 0:05:02.920 --> 0:05:05.400 food in the gifting space, chocolate stuff like that feel 0:05:05.440 --> 0:05:08.200 like more of a necessity even than flowers. Um. I 0:05:08.520 --> 0:05:10.200 kind of agree with that, you know, on the sweets 0:05:10.200 --> 0:05:13.000 and things. But um, you know, we're just you know, 0:05:13.680 --> 0:05:16.480 we benefited at times where you know where it was 0:05:16.640 --> 0:05:18.600 you know, gifts were sent a lot, and then when 0:05:18.680 --> 0:05:20.400 you know, the economy goes down, people kind of tighten 0:05:20.480 --> 0:05:22.840 their belts a bit, and things like flowers don't seem 0:05:22.880 --> 0:05:25.040 as much of a necessity. And the great thing is 0:05:25.080 --> 0:05:30.040 where bootstrapped company and we spend lists all alone. Yes, absolutely, 0:05:30.400 --> 0:05:32.200 and so you know we'll get through it. I'm a 0:05:32.520 --> 0:05:34.440 d percent sure we'll get through it. Unlike some companies 0:05:34.480 --> 0:05:36.840 that you know, I'm really feeling for that are reliant 0:05:36.839 --> 0:05:39.440 on raising capital right now and money is really expensive 0:05:39.480 --> 0:05:42.039 and things like that. You know, we've always done this, 0:05:42.240 --> 0:05:43.800 done it this way, and so we'll get through it. 0:05:43.800 --> 0:05:45.640 It's but it's gonna be tough. It's gonna be another 0:05:45.640 --> 0:05:49.039 tough year. Well, in terms of the growth plans, what 0:05:49.080 --> 0:05:51.320 do you do? Do you put things on hold? Um? 0:05:51.320 --> 0:05:54.239 We really change our focus. So and I started this early, 0:05:54.279 --> 0:05:56.440 and I'm really glad that I did. UM and it 0:05:56.480 --> 0:05:58.839 panned out when it was it doesn't UM, but you know, 0:05:58.920 --> 0:06:01.960 we really I switched our focus from growth to profitability 0:06:02.040 --> 0:06:04.160 and so and I did that seeing what was coming 0:06:04.240 --> 0:06:06.800 ahead of us. Are you not profitable? Before? We always 0:06:06.839 --> 0:06:09.280 had to be profitable to a point that the thing 0:06:09.279 --> 0:06:10.720 that I said is the only way that we're like 0:06:10.839 --> 0:06:14.320 Amazon is that we ran as close to zero as 0:06:14.360 --> 0:06:16.679 possible and then reinvest the profits back into the company. 0:06:16.680 --> 0:06:19.560 So there were many times were like one percent profit 0:06:19.600 --> 0:06:21.640 and things like that. Um, there's a lot of sleepless 0:06:21.720 --> 0:06:24.600 nights before payroll for me in the last twelve years. UM, 0:06:24.640 --> 0:06:27.080 So we really focused on having more of a cushion 0:06:27.440 --> 0:06:29.359 and I'm glad we did that. And so we really 0:06:29.400 --> 0:06:31.800 we we did things that actually cut our revenue and 0:06:31.800 --> 0:06:33.480 we knew would cut our revenue, but it made us 0:06:33.560 --> 0:06:36.280 financially just healthier as a company. And so that's we're 0:06:36.320 --> 0:06:38.599 you know, going through this with that mentality of we're 0:06:38.600 --> 0:06:43.000 not growth at all costs. We are really maintaining a healthy, um, 0:06:43.040 --> 0:06:44.920 you know, a healthy stance and where we want to be. Well, 0:06:44.960 --> 0:06:46.320 I have to say what I love about you. And 0:06:46.360 --> 0:06:49.160 we have some flowers and I think our producer Aerilhead 0:06:49.160 --> 0:06:51.000 took a picture for those who are watching on YouTube 0:06:51.000 --> 0:06:54.240 and on our streaming service. Um, it's just organic and 0:06:54.279 --> 0:06:57.760 it's just beautiful. Uh, twenty seconds left Valentine's Day. We 0:06:57.800 --> 0:07:02.960 can still order, yes, absolutely might get your order. Yes, yes, 0:07:03.320 --> 0:07:05.440 get your orders. Are still we're still taking orders right now, 0:07:05.480 --> 0:07:07.680 so go to farm real Flowers dot com to placers now. 0:07:07.760 --> 0:07:10.440 We love flowers. Um, Christina, thank you so much, good luck, 0:07:10.520 --> 0:07:12.440 look forward to catching up with you. In the future. 0:07:12.520 --> 0:07:15.640 Christina Stumble, founder and CEO of farm Girl Flowers. You 0:07:15.720 --> 0:07:18.720 can find them on Twitter at farm girl Flowers. And 0:07:18.800 --> 0:07:21.800 you are listening to Bloomberg Business Week Karl Masser along 0:07:21.840 --> 0:07:28.760 with Mike Reagan, and this is Bloomberg Radio.