APIS Volume 6, Number 7, July 1988

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APIS

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In this issue

• Emphasis on Marketing: Historical Information, please help update!

FOCUS ON MARKETING HONEY

[Editor's note: This is historical information and old; however, some remains good; any additions or corrections to this information are invited by the author.]

Several items have caught my attention in the last few months. They suggest it's time to focus on marketing as a vital part of making a beekeeping enterprise more profitable.

An editorial in the latest issue of Bee World, published by the International Bee Research Association, 18 North Road, Cardiff CF1 3DY, United Kingdom (England) is worth quoting extensively:

"World honey production is about one million tonnes and increasing. There is a vast potential for beekeeping development in the tropics and subtropics. Chinese officials have recently estimated that in China the number of colonies can be increased from the present 6.7 million producing 155,000 tonnes yearly to 20 million colonies, to increase annual production to 400,000 tonnes.
In most beekeeping countries honey production is still below its potential. As world beekeeping expands and honey production increases, there is a concomitant opportunity for significantly increasing production of royal jelly, propolis, pollen and beeswax.

Beekeeping does not stand apart from other branches of agriculture, and its products do not have guaranteed market outlets at high prices. Practical beekeepers, research scientists and extension workers continue to concentrate their collective effort mainly on increased productivity with little regard to marketing. In agriculture, generally, the same objectives have been pursued blindly and the consequent 'harvest' of over-production in developed countries is now being reaped. In barely four decades food shortages have been replaced with large surpluses. The problems caused by this situation cannot be solved by the normal market forces of supply and demand. If all available food were placed on the market, prices would plunge well below costs of production and many producers would quickly be put out of business. The short term approach to the problem is for governments to subsidize prices and to encourage reduced productivity.

It would seem most timely, therefore, when there are indications of world honey surpluses, to consider seriously the marketing of honeybee products as a vital part of beekeeping development. Complacency in the honey market can be seen in poor packaging, inadequate advertizing, unimaginative promotion and insufficient knowledge of domestic and international market situations.

In contrast to the honey market, the markets for royal jelly, pollen, propolis and beeswax (often products incorporating honey) sold variously as food, cosmetics and for pharmaceutical purposes, appear much more dynamic. Beeswax continues to find favour in high quality furniture polish and novelty candles.

The markets for selling bee products other than honey are already established and expanding. This is largely because these products are often most attractively packaged and very well advertized to compete with similar non-honeybee products sold through the health food trade and other outlets. These products are also widely diversified in food supplements, cosmetics and medicaments. The result is that such products are finding increased demand at a time when the 'pots of honey' market is in danger of stagnating. It would therefore appear that the time has come for the honey market to be updated through product diversification, improved presentation, advertizing and co-operative marketing on a global scale."

Marketing Proceedings Published by IFAS:

The Institute of Food and Agricultural Sciences (IFAS) at the University of Florida also recognizes marketing's role in the agricultural sector. A major state wide conference: Marketing Florida Food and Agricultural Products, was held at the University last year. The proceedings have just been published. A paper by L.C. Polopolus, Professor of Food and Resource Economics gets to the core of the issue:

"While marketing has always been an important component of the food and agricultural system, farmers and farm organizations seem to 'discover' the significance of marketing when there is economic distress at the farm gate... marketing services create approximately nine times more value added than the value added from farming.

This is an astonishing revelation of how rapidly the United States has been transformed from an agrarian society to a highly urbanized and affluent society. American consumers spent $343.6 billion for food during 1985. Almost 90 percent of the total, or $306.5 billion, went for value added in production, marketing and distribution services of nonfarm origin. The trend is consistently toward a larger and larger share of the consumer's food dollar going for services and activities of nonfarm origin. In other words, the farmer's real share of the consumer dollar has dropped from about 18 percent in 1973 to 11 percent in 1985.

Agricultural producers (and here I add parenthetically, beekeepers) commonly agree that the 'marketing problem' is low prices for their output. And while producers usually agree that a better way of marketing their products exists, the often fail to consider alternative marketing strategies or incorporate marketing as a part of their farm planning process."

National Honey Board Targets Foodservice Industry:The beekeeping industry has risen to the marketing challenge by passing the Honey Research, Promotion and Consumer Information Act. This legislation and created the National Honey Board which continues to promote honey vigorously. Most recently, the Board is targeting the foodservice industry with the slogan, "Just add Honey, Make More Money." Ads will appear in the June- December issues of Restaurants and Institutions and Bakery Production and Marketing.

National Honey Board's Second Annual Sales Seminar:

The National Honey Board has also announced its second annual sales seminar to be held August 31, 1988 in Denver, Colorado. All reports from those attending the first seminar in Houston, Texas were uniformly positive. This would be an excellent way for the individual producer to begin to focus more on marketing within his/her operation. For details, contact the National Honey Board, 9595 Nelson Rd., Box C, Longmont, CO 80501, ph 303/776-2337.

Exporting Possibilities:

A weakened dollar has led to better opportunities in the export market. Some large-scale honey packers are reporting brisk sales to markets never before open to them. These include places like Taiwan and Hong Kong. Activities promoting exports are occurring at both the federal and state level. L.V. Mayer discussed the role of the U.S. government's Foreign Agricultural Service (FAS) during the IFAS Marketing Conference in his paper entitled, "Marketing Food and Agricultural Commodities Abroad."

FAS' role is to help exporters stay abreast of the constantly changing trade scene. It gathers marketing intelligence from a network of agricultural couselors and attaches stationed in over 100 countries. FAS Trade offices are located in 14 different marketing areas around the world.

AIMS, Agricultural Information and Marketing Services, is also maintained by FAS. This is a trade referral service through which buyers' product requests are forwarded to FAS and made available to AIMS subscribers. There is also a buyer alert service which uses high speed telecommunications to forward sales announcements to interested buyers overseas. Mr. Mayer suggested these areas of emphasis to those interested in marketing their products overseas:

1. Actively seek out new overseas customers. Study market trends and trade leads.
2. Determine product tastes and preferences. Market surveys, trade missions, and tours.
3. Act to remove or reduce import barriers. Education, consultations and negotiations.
4. Introduce product offerings to potential customers. Trade shows, in-store displays and advertising.
5. Offer quality lines consistent with customers' needs. Grades and standards and proper packaging.
6. Price products competitively to meet competition. Flexible pricing and terms of sale.
7. Offer credit terms as necessary to assist sales. Competitive interest rates and loan terms.
8. Follow up sales to ensure satisfaction of buyer. Resolve sales disputes.
9. Demonstrate commitment to export market sales. Be a consistent, reliable supplier.
10. Express appreciation for export business. Extend local holiday greetings.

Exporting Florida Honey:

As I reported in the November, 1987 issue of this newsletter, a major campaign by the Division of Marketing, Florida Department of Agriculture and Consumer Services is under way. It includes the following priorities:

1. Gather more information on the European honey market.
2. Ask for feedback from honey industry people in Europe and elsewhere.
3. Disseminate exporting information.
4. Investigate the relationship of Florida honey marketing and the Buy-Back program.
5. Promote attendance by honey marketers at the International Bakery and Confectionary Trade Show, Milan, Italy, 1988.

Four Florida honey producers raised $3600 to help display honey at the Milan show last May. A positive reaction by potential customers at the show was reported and a list of prospective customers was sent to those who helped finance the venture. As a footnote, the state of Florida spent more on the show than it collected from the Florida beekeeping industry.

According to those attending, most European buyers believed the price of Florida honey was much higher than it really was. Orange blossom was selling at U.S. $1.25 per kilogram (2.2 pounds). A cost breakdown included U.S. $.98 per kilogram for the honey plus U.S. $.16 per kilogram freight one way in 40,000 lb lots (18,182 kilograms). European buyers also preferred the quality of Florida honey; they complained that other honey (e.g. from Yugoslavia) was often contaminated with bee parts.

The Florida effort is being directed by Mr. Michael Whitehead, Division of Marketing, Florida Department of Agriculture and Consumer Services, 414 Mayo Bldg., Tallahassee, FL 32399-0800. He is currently preparing an updated report on Florida honey exporting. He will also make another proposal to Florida beekeepers to secure assistance in attending the ANUGA Trade Fair (largest food show in the world) in Cologne, West Germany, October, 1989.

The Florida Division of Economic Development also has a free computerized trade-leads program. It is designed to locate foreign buyers for products and services in Florida. Any marketer/producer in the State can sign up for the program by requesting a Trade Lead Registration Form from Florida Dept. of Commerce, Bureau of International Trade and Development, 401 Collins Bldg., 107 W. Gaines St., Tallahassee, FL 32399-2000, ph 800/342-0771.

Marketing Information:

An effective marketing program is based on timely information. This was emphasized in the IFAS Marketing Conference by J.J. VanSickle and T.J. Stevens in, "The Role of Information in Agricultural Marketing." According to the authors, marketing information is important because there is so much uncertainty about the state of the world. Marketing commodities is a dynamic process in constant change. Four factors affect the value of information in the decision-making process: (1) timeliness, (2) processing ability, (3) application and (4) cost. The authors believe most of agriculture under- utilizes information.

Sincerely,

Malcolm T. Sanford
Bldg 970, Box 110620
University of Florida
Gainesville, FL 32611-0620
Phone (352) 392-1801, Ext. 143 FAX: (352)-392-0190
http://www.ifas.ufl.edu/~mts/apishtm/apis.htm
INTERNET Address: MTS@GNV.IFAS.UFL.EDU
©1988 M.T. Sanford "All Rights Reserved