Commitment to Supply
Establishing the willingness of beekeepers to commit a regular supply of honey for bulk export to an offshore joint venture partner is the crucial first step in any honey collective, John Hartnell believes.
The long-time honey exporter and managing director of Hartnell & Associates floated the concept of a collective supply arrangement between New Zealand producers and an offshore packer in the August issue of Apiarist’s Advocate. In the September issue, industry stakeholders weighed in on the concept.
Hartnell has considered the feedback and had further discussions on the idea with potential suppliers, but says he is hesitant to initiate discussions with the second half of any arrangement: the offshore packer and distributor.
“I nearly had the conversation with one of the key offshore buyers the other day, but then I held back because I thought, no its too soon. I will just disappoint and frustrate them if I can’t put in place a reliable supply network,” Hartnell says.
Some in the honey industry have warned of the risk and difficulty associated with getting a joint venture honey cooperative off the ground, but Hartnell says the model he is proposing would be light on capital outlay, other than the honey itself, and rather take advantage of existing distribution and marketing channels.
“These people are the same people I have been trading with for over 35 years. I already know them. They are performers. They pay on time and never miss a beat. So, I have complete confidence in their ability to deliver a viable solution should this pathway be seriously considered.
“My concern is in gaining confidence that suppliers won’t just dive off for another dollar somewhere else. They have to be prepared to make an investment. That investment would not be in money so much as it would be in moving their honey stock, so that we could get things off the ground.
“We have to be able to go to the international packer and say, ‘we have 30 producers who are prepared to commit 50% of their crop to this particular marketing approach for the next five years’. I don’t see beekeepers rushing up to do that though. It is not about raising money, it is about getting commitment, understanding the challenges, being patient and letting the end product do the talking.
“If there is support for this concept and the commitment that this would require from the industry, then discussions can be taken to the next level, if not it will simply remain another option on the table for future consideration.”
The most scope to generate supply is in lower grades of manuka honey, likely monofloral, and in the range MG100+ to MG300+, Hartnell believes.
There is trepidation from some honey sellers about what impact a large supply arrangement of honey could have for the manuka honey industry. However, Hartnell says it would simply be entering an existing market and be neither solving nor worsening any current brand confusion among customers.
While he understands that honey suppliers are going to want a price estimation before they commit to any arrangement, Hartnell says at this stage that is impossible, it is early days and unrealistic at this point.
“We understand the bulk market price for Manuka, and this will be the starting benchmark return for the beekeeper collective. We will need to have many discussions with an offshore partner to set guidelines covering marketing, packaging, distribution and Brand New Zealand. We also will need to understand that the joint venture packer on the other side of the arrangement is going to want a margin, just like the beekeepers are going to want one.
“So, if beekeepers have interest in the concept, then they should talk with their fellow honey producers to determine the collective interest and potentially reach out to me. I am certainly interested in hearing beekeeper’s response,” Hartnell says.
“Ultimately, any progress is totally reliant on beekeeper commitment, it is a serious option but only if the industry wants to progress such an arrangement. The idea sits on the table."
Hartnell and Associates contact details can be found via www.hartnellnz.com