Finding markets
Honey is a highly versatile product and markets for honey exist at every level ranging from local to export, from specialist to general. Finding an appropriate market first requires an understanding of different market opportunities and then deliberate steps may be taken to meet the needs of that particular market. Identifying the appropriate market is important. For example a beekeeper who harvests 10kgs of honey annually should not try to access distant urban or international markets. Compared to the possible income earned, the costs would be too high.
Local markets
Honey not used at home, or shared with family, can be sold informally in local markets or at the roadside. When sold in small quantities - for example by the spoonful - poor rural people can afford to buy it and this is important for customers with little money. Local markets may also be served by small shops or market stalls. A very successful local marketing method that helps to scale up honey sales is to pack honey into plastic sachets of about 25-50gms to be sold by local stallholders. Selling in small quantities can achieve high profit margins, for example, if one kilo of honey is sold little by little the total income earned from the whole kilo can be very high. However, whilst the profit margin may be high the total income earned will be low unless a beekeeper has many kilos to sell this way. Selling in local markets often secures a quick cash sale plus these markets are always there, and easy to access. However, sales may be slow and a beekeeper who has a large volume may take many months to sell everything.
The demands of the local market in terms of packaging and presentation are not difficult. Customers do not demand rigorous quality standards. This means that local containers or used water and Coke bottles can be used. Weights and quality do not need to be measured as prices are directly negotiated between buyer and seller. However, the small size of local markets means they can quickly become saturated. Furthermore, the small size of the market means that earnings from honey sales remain small because generating significant income depends on producing honey on a large scale. Local markets rarely offer many opportunities for market growth. At this point the beekeeper has to consider how the scale of honey sales can be increased.
Distant markets
A beekeeper who wishes to earn more by harvesting greater volumes of honey needs to think about accessing high volume markets elsewhere - in towns and cities. Transport immediately becomes an issue.
One way to approach this is to sell honey to traders or middlemen who are always travelling and have access to markets outside the local area. Middlemen who buy honey from many different beekeepers, will consolidate adequate volume to make the business worthwhile for them.
An alternative to selling to traders is to work collectively with other beekeepers. Small producers can join together to form associations or trading groups and together achieve the economy of scale which enables them to access distant markets. They may do this by selling in bulk to a honey packer who packs and labels honey for retail sale or they may develop their own processing and packing business. Any processing and packing business should be located reasonably near a town for practical purposes. Very rural producers would be advised to sell their produce in bulk. They must, however, work hard to gain the skill and capacity to develop a fair trading relationship with their buyers.
A significant end market for honey is supermarkets and large independent shops. These retail outlets require a product packed into bottles and in many countries there are food standard regulations which cover the processing and labelling of such products.
Specialist opportunities
There are a range of specialist opportunities available to sellers. For example consider outlets such as airports, tourist lodges, hotels, hospitals and pharmaceutical companies. These outlets may be small, but high value. To succeed considerable thought and planning is required and it is important to gain knowledge of the consumer. Thinking about what the customer wants and why they may buy your product forms the basis of a marketing plan. It is thinking carefully about the consumer that changes the business process from 'selling' to 'marketing'.
Export opportunities
Selling your product outside of your own country means you have access to very many more and new customers, but it also means you are now competing with the whole world! It is important to consider what makes your product stand out above all the others - what is your unique selling point? A potential exporter needs to stop and think about why a person should buy their product instead of another one. It may be, for instance, that it comes from a very natural, uncontaminated environment, or be from trees that produce the most delicious honey, or the sale could have helped to benefit people in poor, war-torn or remote communities.
The organic and Fair Trade honey markets are important niche markets that offer a price premium over the normal world price. They both tap into unique selling points from the developing world; unpolluted environments, especially forests and mountains where honey is produced far from chemical contamination, and the wish of people in developed countries to help people in developing countries to make a better living. It should be noted though, that there are significant costs attached to gaining certification for these schemes and the selling price may not be high enough to cover these additional costs. To sell honey into the world market requires many hundreds of tonnes of honey to be produced for it to be profitable. Successful entry into a specialist niche scheme could reduce this to about 18 tonnes (or a single shipping container load). Export sales are normally transacted in bulk 300 kg containers of a specific type and lined with an inert coating (beeswax will be acceptable for some buyers). It is essential to have terms agreed with a supportive honey importer before embarking on this sales path.
Europe, USA, Japan and other rich countries have very strict quality regulations. Meeting the necessary standards is expensive because of complicated paperwork and bureaucracy - this applies even if your honey is top quality.
Value addition
Adding value to a product helps to increase its profitability or increases the diversity of items for sale. See the section on adding value for more information.
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- Author Bees for Development
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- Published Date October 2016
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