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“It wasn’t what we wanted, but its what we expected”

Kai Ryssdal and Maria Hollenhorst Feb 22, 2023
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Christina Stembel, CEO of Farmgirl Flower, an online flower delivery company. Photo by Anna-Alexia Basille

“It wasn’t what we wanted, but its what we expected”

Kai Ryssdal and Maria Hollenhorst Feb 22, 2023
Heard on:
Christina Stembel, CEO of Farmgirl Flower, an online flower delivery company. Photo by Anna-Alexia Basille
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The National Retail Federation predicted that Valentine’s Day spending would increase this year to nearly $26 billion, up from $24 billion in 2022. The top three gifts — in order — were candy, greeting cards and flowers. But down in the weeds of the flower-delivery business, things don’t look so rosy. 

“Marketplace” host Kai Ryssdal spoke with Christina Stembel, the CEO and founder of Farmgirl Flowers, about how high energy costs, remote work trends and other ongoing challenges impacted her company this year. The following is an edited transcript of their conversation. 

Kai Ryssdal: It’s post-Valentine’s Day, we gave you a little time to count things up, and I guess the first question has to be: How was Valentine’s Day for you?

Christina Stembel: It was as expected. 

Ryssdal: So that sounded very bland, if I may just say. 

Stembel: Yeah, I mean, it wasn’t what we wanted it to be, but it’s what we expected it to be. So I still take that as a win. I feel like I’m always here telling you the challenges, so I like to have at least some positives to sandwich it.

Ryssdal: That’s fair. But look, one of the reasons I like talking to you so much is because you, generally speaking, give it to me unvarnished and that’s always refreshing. Let me ask you about challenges, since last we spoke — which I guess was probably around last Valentine’s Day.

Stembel: Yes, it was. I think it was. We still have some of the same challenges. Everybody’s talking about inflation, and we’re definitely not immune to that either. And you know, greenhouse-grown flowers — it costs a lot of energy.

Ryssdal: Oh to heat the greenhouses. 

Stembel: Yeah. So a lot of them actually turned them off in December, because it couldn’t afford to heat them, which caused a lot of the Valentine’s Day flowers not to be ready on time. So the limited supply drove the prices back up.

Ryssdal: We’ve talked a couple of times, I think, about distribution and how you manage that. Are you changing how you’re doing things?

Stembel: Always. Every time I talk to you. (Laughter)

Ryssdal: It does seem that way.

Stembel: Yeah, yeah. We’re either setting up distribution centers or tearing them down. This year is a building year for that — we need to get closer to the end consumer. And we’ve known that for years. But we’ve tried it several ways that haven’t worked. And so you know, that’s the joys of being a bootstrap founder: You just keep trying things until something works. We’re looking at a new model, maybe some micro-distribution centers that we own, and then some that are through partnerships and things like that. 

Ryssdal: I should know this, but I don’t. How long have you been in business?

Stembel: Twelve and a half years. The first two were from my dining room table, but they still count.

Ryssdal: So look, do you still think you’re a startup at 12 and a half years in with millions of dollars of sales? 

Stembel: Yeah, I mean, tens of millions [in sales] now, which is great. But kin of our mantra this year is “return to startup.” You know, we know how to spend less than we make, and a lot of companies don’t know how to do that. That comes from being a scrappy startup.

Ryssdal: Alright, a couple of questions about the business environment right now. No. 1: working from home. Has that changed your dynamic at all? Because it’s not like people are sending flowers to somebody at their office, right?

Stembel: Yes, it has. There are not a lot of studies that show this, but my gut — and after 12 and a half years, it’s pretty good — it definitely has, especially around Valentine’s Day. You know, this sounds a little bit bad to say, but part of the sparkle in the specialness of sending a bouquet to someone is, you know, other colleagues get to see it. Without that, it’s very easy to just stop at the grocery store and spend a fraction of the price. I question whether Valentine’s Day will ever come back to the way it was before until everybody’s back in the office again.

Ryssdal: OK, well, so first of all, everybody getting back in the office is not a sure thing, but if that’s the case and Valentine’s Day is some huge percentage of your annual revenue, how is that sustainable?

Stembel: Yeah, you hit the nail on the head there. It puts a lot more pressure on Mother’s Day.

Ryssdal: As if there’s not enough pressure on Mother’s Day already, let me just say it.

Stembel: Absolutely. At least 10% to 15% more of our annual revenue has to come from Mother’s Day now to make up for Valentine’s Day. 

Ryssdal: That’s a lot. How are you gonna do that?

Stembel:  You know, we’re gonna work some magic hopefully. You know, every company is making big choices right now and the choice I made last year to really focus on profit and not growth, we’re continuing. We need more to come from Mother’s Day, but it might not necessarily be as many more orders, but we’re really making sure that each order has profit.

Ryssdal: Taking back to that dining room table 12 and a half years ago, what would the “you” back then say to the “you” right now?

Stembel: Oh my gosh, you wouldn’t even recognize me. And I wouldn’t recognize her. You know, I’ve just learned so much. And I never thought that I would be here doing business the way that we do business. But I’m grateful for all the learning with it.

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