Think back to the last time you plunked down some money to purchase a bunch of posies. Maybe you went the traditional route and telephoned a florist to get an arrangement for Mother’s Day (which essentially correlates to Christmas in the floral industry). Or perhaps you made a hasty grab for a parcel of unnaturally bright blooms at the grocery store checkout to serve as a hostess gift. Either way, John Tabis, founder and CEO of The Bouqs, wants to offer you a better choice.
That’s because back in 2012, Tabis, whose bona fides include stints at Disney, Bain & Companyand Universal, was once like you. While attempting to order some flowers for his mother, Tabis quickly became frustrated by florists’ attempts at upselling plastic butterflies and teddy bears, and fed up with them asking, flatly, “How much do you want to spend?” for generic arrangements that didn’t speak to him. So he set out to build a brand with a story that could resonate, featuring more unique offerings that were responsibly sourced but still affordable.
It was a tall order considering he’d only managed to scrape together $13,000 from friends and family. But Tabis and longtime friend Juan Pablo Montúfar—who just happened to be a biochemist working with flower farms in Ecuador— pooled their expertise to create an e-commerce company that would serve both the growers and the customers by cutting out the middleman.
Eight years on, The Bouqs has delivered more than 62 million stems (including over 22 million roses) sourced from 140 farms. And Tabis’ vision to change the paradigm of how people spend some $26 billion on flowers in the U.S. continues to blossom.
The Bouqs just landed an additional $30 million in funding that puts the company’s total funding windfall at $74 million— well ahead of competitors such as Bloom On and Urban Stems.
With this latest infusion of capital led by Japanese enterprise investor Yamasa, The Bouqs is poised to take its uniquely sourced blossoms international, penetrate the lucrative business of weddings and take a preliminary dip into brick-and-mortar retail.
As it plots growth, what won’t change is the value system Tabis baked into The Bouqs from the beginning, he said. Sustainable farming and shipping directly to consumers help the farmers The Bouqs partners with increase their profit margins which are traditionally razor-thin if they have to purchase expensive fertilizers and pesticides and ship through a middleman. This also ensures that the customer gets the freshest possible flowers and knows exactly where they come from.
The Bouqs’ initial shipments, Tabis told CO—, were harvested from farms at the foot of Cayambe, an active volcano in Ecuador. “Storytelling was our early growth driver,” Tabis explained, as customers were eager to receive a premium box of stems from a known point of origin, rather than some random bunch from parts unknown.
But not only that, The Bouqs’ focus on sustainability will also remain unchanged. Certifications such as the one from the Rainforest Alliance mean that The Bouqs only partners with farms that recycle water and use other sustainable growing practices. Shipping direct also mitigates a big problem with fresh flowers: waste. The number of flowers that die or get damaged during transport can be as high as 20% for wholesalers, according to the American Council for an Energy Efficient Economy.Tabis said The Bouqs waste rate is less than 1%.
Taken together, these factors can make the difference for shoppers, particularly millennial shoppers who value brands they can trust to reflect their values. “Forty percent reported that they’d pay more for a brand that reflects the image they want to convey about themselves,” according to Christine Barton of the Boston Consulting Group. Not to mention have an arrangement that’s Instagram-worthy.
Scaling growth for perishable goods
Tabis admits that it’s “virtually impossible to build a repeatable process” manually to scale a business of perishable goods shipped far distances to arrive on a particular day in perfect condition. So, The Bouqs lets technology do the heavy lifting. He points out that many of The Bouqs’ staff of close to 80 people is working on automating processes along the supply chain.
Everything is a test until it’s not. Even after you scale, business doesn’t stay static.
John Tabis, founder and CEO, The Bouqs Co.
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“We try to make every delivery perfect,” he said, but the tough reality is they don’t always succeed. He recalls one particular Valentine’s Day in 2015 where a blizzard shut down most of the southeast. “It doesn’t matter if it’s an act of God,” Tabis said, the customer only knows that they weren’t able to get their gift to a loved one for the holiday. Automation has allowed The Bouqs to be more nimble across the supply chain, so if one supplier can’t get the goods out on time, they can easily find another that can.
This, he believes, is going to give The Bouqs an advantage when trying to crack Japan’s $6 billion market. Although it helps that Yamasa as the lead investor for this funding round has connections with a wide range of businesses in that market, Tabis cited Japan’s great concentration of people as well as the fact that 90% of floral is sourced overseas from the U.S.
Brides and grooms looking for more sustainably sourced floral options will help the company tap a market in the U.S. where estimates show couples spend about 8% of their wedding budget on flowers. As for brick-and-mortar stores, Tabis simply said The Bouqs will start small, likely with just two locations that may be part of a larger retail outlet, but wasn’t able to discuss details yet.
There are other reasons for Tabis to be optimistic. Although he didn’t disclose revenue numbers, he did say The Bouqs estimates that it generated a one-day total of $6 million in sales on Feb. 13, the pre-Valentine’s Day bonanza.
This growth stands in sharp contrast to the news last year that 110-year old floral delivery juggernaut FTD filed for bankruptcy protection. Additionally, industry analysis from IBISWorld suggests that independent floral businesses across the country are withering. “Discounted prices for flowers online and in supermarkets have led consumers to purchase less flowers from industry operators,” according to its latest market research report. “The Online Flower Shops industry has continued to gain popularity due to its favorable pricing and convenience,” the report added.
“The whole thesis was to not have stores,” Tabis admitted ruefully. “That was wrong.” What is right, he added, is to keep an open mind. “Everything is a test until it’s not,” said Tabis, “Even after you scale, business doesn’t stay static. Competition changes, you as a founder change, all those things are constantly moving.”
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Published March 09, 2020