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As you're aware if you've read the pre-seen, Mavis Venderby's revenue is almost exclusively dependent on the manufacture and sale of beehives, to both commercial and hobby beekeepers. But to a large extent the beehive market is dependent on the market for beehive products—most importantly, honey! And so to understand the demand for beehives, we should first take a look at the honey market. If the prospects of the honey market look grim or negative, then of course the demand for beehives is likely to be effected.
In an April 2016 article, published in the American Bee Journal, President of the Committee for the Promotion of Honey and Health Ron Phipps reports that “prices in the American and international honey markets have been collapsing, to the distress of beekeepers and honest honey exporters, importers and packers throughout America and other countries. During the past 12-14 months honey prices for many important and traditional origins have eroded by 40%-50% of their previous levels”. According to Phipps, a number of factors are affecting this decline.
For example, China has increasingly been mass-producing honey and potentially in a dishonest way. According to Phipps' analysis, Chinese producers have been “adulterating” their honey with resin and other techniques (Phipp notes heavy interference from the Chinese government). In effect, they have been “diluting” their honey with sweeteners and other components. Though honey exports have increased globally by 61% since 2007, the number of beehives has been relatively flat in the same period—growing by only 8%. Also, productivity per hive has actually been decreasing. Again, more or less steady beehive numbers with lower productivity would lead one to expect if anything a decrease in honey exports. This anomaly supports the honey adulteration and tampering theory...
Customers and Demographics
Demographically, Tucland is a highly unusual, even unrealistic, market. Tucland has a population of 20 million, around the size of an average European country (a little larger than the Netherlands at approximately 15 million). We see from the pre-seen that 1% of the Tucland population are hobby beekeepers. If we look at comparable population sizes in the real world, this is a huge proportion of the population! There are no comparable proportions in the real world. We are therefore dealing with a highly contrived, artificial domestic marketplace for this industry.
To get a sense of just how large a percentage this is, compare the United States, with a population of around 318 million. According to one source, the United States has somewhere between 115,000 and 125,000 beekeepers in total. That's ALL beekeepers, hobbyists and commercial included. The vast majority are hobbyists according to the survey data. So we may assume that around 100,000 are hobbyists. What percentage of the population is that? It's .0003% of the population! So you can see just how exceptional Tucland is by comparison with a whopping 1% of the population being hobby beekeepers! Add to that the number of commercial beekeepers (with honey farms up 200% from 5 years ago, according to the pre-seen!), and we're looking at an almost implausible proportion of the population employed in the beekeeping industry! The conditions for beekeeping here must be near ideal, and incomparable with other countries. This might explain Tucland's honey market's apparent immunity to outside pressures, as indicated in the article on page 23 of the pre-seen. Imports of honey have dropped significantly in 5 years by 20%. The quality of Tucland honey must be pretty high!....
... A final point on the customers for beehives. Many sources note that hobby beekeepers are a very passionate and dedicated bunch, with very strong beliefs about best practices and methods, and a very protective attitude towards their bee colonies. As Jill Reed writes for BeeThinking.com, “That in and of itself is good, as more discussion perpetuates more dialogue and new opportunities for consideration. It is bad in as much as beekeepers can become pompous, judgmental, and condemning to ways that differ from their own, or so mired in what they believe to be right, that they take exception even when another beekeeper is trying to be helpful. Nowhere is this more apparent than for new beekeepers”. What this means is that it can be very intimidating for potential new customers, and so there is always going to be a place for friendly guidance and advice. Mavis Venderby appears to have a very strong tradition of offering personal advice and tips to its customers, and with a growing proportion of hobby beekeeper customers, it will be important to sustain this service. However, Jill Reed also notes that “Some books have come to market in recent years about natural, backyard, and hobby beekeeping, but they are few and far between and many simply refresh the old information which was originally geared to and for large-scale commercial beekeepers”. ...
Competition and Companies
In this section we're going to take a look at some of the major movers in the industry. When it comes to international presences, major beehive manufacturers are few and far between. The majority are relatively small-scale, often producing beehives for local and regional markets, and generally the limit of the market for beehive manufacturers is national. This is perhaps due to the logistical difficulties involved in shipping large structures that contain delicate components. However, one of the most reputable companies out there from an international point of view, and one from which Mavis Venderby could perhaps learn a lot, is EH Thorne (Beehive) Ltd. We will consider some of the possible roots of the success of this larger company, as some of Thorne's strategies are scaleable to Mavis Venderby's case and may inform the decision-making of their management going forward.
Thorne was founded over a century ago, and is based in Lincolnshire, England. It is interesting to note first of all some of the parallels between Thorne and Mavis Venderby. Thorne's main manufacturing site is at the 31 acre Rand premises, where there is also an on-site 5,000 sq foot store. Thorne takes pride in the fact that an increasing number of their store staff are themselves experienced beekeepers. As we saw in the pre-seen, Mavis Venderby also has an on-site store adjoining the main manufacturing facility, and takes pride in the fact that a large number of their staff are keen hobby beeekeepers themselves. Again, this seems an industry must, especially for those companies catering to hobby beekeepers. ...
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