Tom Sanford
Extension Apiculturist
University of Florida
The combination of both organizations's efforts, along with those of Dr. Marla Spivak, Extension Entomologist at the University of Minnesota, made the seminar successful in many ways. Not only were some of the most knowledgable persons in the honey producing and packing industry on hand, but also those who see the sweet's future in the larger context of U.S. and foreign food markets. In a futher show of coopertion the Minnesota Honey Producers presented an award to Mr. Steve Klein for his long service as a member of the National Honey Board.
New rules and new relationships are affecting business in many ways, according to Mr. Barlow. The basic systems responsible for where we are today are broken. We are in process of discovering others that can be better applied in the current environment. The discovery phase is different as well, Mr. Barlow said, because 90 percent of new information must come from outside the industry, not from within as has traditionally been the case. This is problematic, he concluded, many will fail to recognize this essential fact.
Basic changes will not be seen by many until after they occur which will be too late, Mr. Barlow said. This is the result of what he called "paradigms." These mental mindsets or ways thinking are helpful in helping to analyze the world. They can lead, however, to paralysis and seeing only what one wants to see. This results in what Mr. Barlow calls a "terminal disease of certainty."
In order to evolve, therefore, the old paradigms must be replaced with new ones. This happens through a "futuring process," Mr. Barlow said. It consists of scanning and anticipating trends and insights and from these developing new relationships and processes. There are two parts to this, the conceptual (discovery) and operational (visionary). Cooncentrating on the former will be extremely important, according to Mr. Barlow. As a consequence, the successful business person can expect to spend 20 percent of future in retraining and reinventing new job skills.
Paradigms, products, processes, almost any phenomena one can think of, have life cycles Mr. Barlow said. In the beginning, there is a foundation and vision; this leads to a maturity followed by inevitable changes requiring readjustments. There is great flexibility during initial stages, but this later becomes rigid (institutionalized) which often leads to decline and an eventual crisis. A decision must then be made to retool. If not done, however, or accomplished too late, this leads to minimal survival or extinction.
In the futuring process, therefore, Mr. Barlow said, decisions must be made about the old paradigm before it is too late. Ansering the questions what can one keep, modify, let go or create is key. The time line of this process is now about five to seven years, and probably will get shorter as the pace of change increases. Strategic imperatives of the futuring process, Mr. Barlow said are to establish a future view, review products and services offered within this context, develop a vision or mission, update the organizational structure and upgrade professional literacy. The latter is most important as more and more time will be spent in training and educating both management and employees.
The leadership challenges of the future, according to Mr. Barlow are posed by the following:
1. The global village: By the year 2,000, the world's population will increase from five to more than six billion people. Ninety-two percent of this will occur in developing nations. The U.S. will be a microcosm, as the dominant ethnic group will be hispanic. The implications of this, Mr. Barlow said, are to look to developing countries and learn Spanish.
2. Information and service economy: In the year 2000, ninety-five percent of all jobs will be in information and service industries. Typical manufacturing and producing (agriculture) employment will be greatly affected by automation. Pricing will be low; the only way to increase this will be by adding value. Mr. Barlow's implications: become familiar with computers and information processing; continually search for ways to add value to products and services.
3. Technological advances: By the year 2000, expert systems will be universally used in agriculture, manufacturing, automotive diagnostics, healthcare, insurance, law enforcement and education. Results of this will be far reaching, according to Mr. Barlow.
4. Population Diversity: "There's a socioquake' coming," Mr. Barlow quoted the futurist Faith Popcorn. A sweep of micro markets will supplant megamarkets. Seniors, women, lessskilled immigrants and others will have great mobility and less commitment. The hard-working majority Wasp will become a minority! Only by anticipating this quake will one not be left behind, concluded Mr. Barlow.
5. Organizational dynamics will change: The home may again become the center of entertainment and socialization. This change predicted by another futurist, John Nesbitt, will open up many new activities for those "burrowing" in their homes, according to Mr. Barlow. Implications are guided by emphasis on tailoring to the customer's needs.
6. Strategic thinking and planning: According to the book, The Virtual Corporation, businesses will become networks of independent companies, suppliers, customers, even rivals, linked by information technologies. A major paradigm shift will be sharing skills, costs, even market access, according to Mr. Barlow. More radical, there is expected to be no central office and/or organizational chart, and no heirarchy or vertical integration. The goal will be to get there first no matter the cost. This will require building different relationships. The synergy of these efforts will produce the needed outcomes.
Success in the 21st century, Mr. Barlow concluded will be through global and planetary connectedness, obsession with customer satisfaction, enhanced people and technology, alternative organizational frameworks, "real time" responsiveness and concentrating on the process of "becoming instead of being." The keys to leadership will be: farsightedness, mastery of change, organizational design, anticipatory learning, initiative, mastery of interdependence and high integrity standards.
Many in the audience, this reporter included, were literally exhausted from the pace and implications of Mr. Barlow's presentation. In retrospect, however, it greatly reflected much of what subsequent speakers had to say.
Less cooking from scratch, more children cooking, and increasing use of the microwave to heat already-prepared foods will be the norm. Easy-to-prepare chicken recipes are becoming important, according to Ms. Humann. No longer do home economics classes teach food preparation. Many consumers don't even know the definitions of classic cooking terms like "sautee" and "fold." The number of recipes in use is falling to a few tried and true. The cooking that goes on is on weekends to prepare meals for the rest of the week. The microwave oven is moving to stackable units and soon will be featured in automobiles. The dominant food providing technique will not be preparation, but heating.
Fifty percent of the honey market is now taken up by bulk or industrial users, Ms. Humann said. Foodservice accounts for 15 percent and the other 35 percent is in retail. Largest honey markets are western (Salt Lake City, Seattle, Denver) the preferred size is 12 ounces. Thirty percent of consumers purchased honey 2.9 times per year, and 70 percent have it on their shelves, but have not used it. Ninety-one percent use it as a topping, 75 percent as an ingredient and 57 percent in beverages (tea). It is becoming more used in coffee at specialty shops.
Most honey consumers are 35 years or older, have higher incomes and are better educated. Usually, there are children in the house, according to Ms. Humann. Most users are caucasian. Fewer traditional households, an aging population and an expanding ethnic population will reflect changes in honey consumption. The wellness revolution also will impact the honey market.
Non-traditional uses of honey are on the rise, Ms. Humann said, including interest in "organic" products. Those consumers will seek out organic honey and are willing to pay for it. Honey is perceived as healthier, part of a new food paradigm: There will be more interest in what one eats rather than what one doesn't eat. About 94 percent of consumers see honey as good for you, Ms. Humann said, a reputation many other products would love to have.
The history of speciality foods is that of adding value, Mr. Payne said. The general progression of things throughout history has been gathering, cultivating, preserving, trading, selecting and now, creating. The current market in these foods, according to Mr. Payne, is $20 to $35 billion. One and half billion dollars is the gourmet market, urban oriented, non-price sensitive (price doesn't matter much) and have loyal customers. Health foods, including organics is about a $4.79 billion market. This is youth oriented, has a 14 percent growth rate and includes the newest category, neutraceuticals. These are a different kind of food, a mixture of more traditional categories. Some 22,000 new products are launched each year with regional, exotic, even shock, value. Most importantly, however, according to Mr. Payne is that honey fits somewhere in almost all these categories.
The kinds of products honey is imost mportant in, Mr. Payne said, are in the following specific areas:
a. Honey in sauces, salsas,
condiments and mustards.
b. Honey in jams/jellies/preserves.
c. Honey in breads/crackers/cookies.
d. Honey in bakery mixes.
e. Honey in chocolate/ice cream/dessert
toppings.
While used in some specialty foods, honey is underutilized as an ingredient in most products in this category, Mr. Payne concluded. The sweet, therefore, should be positioned as a multi functional ingredient in products, not merely a sugar replacement, taking advantage of its flavor, low pH (stable nature), viscosity (adapted to processing), humectant (conserving moisture) properties and upscale image. Fortunately, that is just what the National Honey Board is doing in its research program.
Several factors should be taken into consideration when measuring promotional benefits, according to Mr Yocom.
1. Get the facts. Ask whether the promotion generated extra volume, where money was wasted and how to strengthen the promotional effort.
2. Design promotions with a competitive advantage. This is not easy; only a hanful of firms really do this effectively.
3. Do a promotion effectiveness study using experts or hire it done through consultants. Only then will one be able to objectively measure the results of any advertising campaign.
The keys to designing a good campaign, Mr. Yocom said, can be associated with the famous equation E=MC2. Effectiveness is equal to motivation multiplied times concept and communication. This means, Mr. Yocom concluded, searching for powerful ideas, creating hard-to- imitate concepts and using substance, awareness and emotional appeal to get your ideas across.
Ms. Lye used a number of questions as the basis for her presentation. These included who should products be promoted to, what aspects of the product are most important, where is the best location to promote and in what season and how one can measure effectiveness. In her particular case, Ms. Lye said, that these strategies resulted in about $575,000 in promotional activities from a beginning budget of $155,000. Unfortunately, this has not been perceived as enough and the program is being shut down, Ms, Lye said, a tragic waste of investment.
Mr. Molstad said that the Chinese and Mexican situation indicated a weakening in output from those exporting nations. Some of that, he suggested, might be made up by more exporting activity from the U.S. He concluded that the FAS and other governmental agencies can help fledgling exporters. In addition, the FAS also runs programs available through the National Honey Board.
The last part of the conference was an interesting departure from previous days' topics. It featured several beekeepers who provided an in- depth analysis of both their costs and management techniques.
Mr. Brent Woodworth provided some insights into his North Dakota outfit, using 2,000 colonies for both honey production and pollination. Most important was the practice of "hefting" each colony for appropriate weight as they went into winter. Vegetable oil and powdered sugar TM 25 extender patties are religously used. Nylon straps have been found to be the best moving aid.
Five to 700 nucs are made up each spring in Texas where Mr. Woodworth's father raises queens, estimated to cost $3.00 each. 46 pounds of corn syrup are fed each colony over the average year. Major costs in Mr Woodworth's outfit in descending order are: hired labor, custom trucking, feed, utilities, supplies and insurance. His per colony cost is $72.00 per colony for honey production and $32.00 for colonies in almond pollination.
In a variation on Mr. Woodworth's theme, Dick Ruby discussed in depth only one part of his operation, making 5500 nucs in Texas each year. Parent colonies run for pollination in California by a cooperator and wintered there are transported to Texas, broken down into three nuclei, and requeened with cells. Mr. Ruby's major cost in making the nucs is hired labor, three times as much per colony as the next greatest cost, syrup for feed. These are followed by Apistan ® strips, freight and pollen substitute. Major costs for parent colonies are the 1900 mile freight charge to get 920 singles into Texas to make nucs and replacing half his queens ($5.50 each). He estimtates his cost per finished nucleus at $25.00.
The key to Mr. Ruby's operation is his relationship with cooperators in California. He is also aggressively eliminating non productive locations in Texas. New kinds of problems continue to crop up. These include more chalkbrood and excessive dwindling in Texas, as well as queen failures and disappointing results in equalizing colonies. He emphasizes use of pollen supplement, using both patties and open feeding dry soybean flour, and deployment of antibiotic extender grease patties
In a major departure from the first two speakers, Alan King described his outfit in southeastern North Dakota. He emphasized his philosophy which includes running no more than 2,000 colonies, all of them for honey production. He spares no labor inputs and uses single story colonies exclusively. In addition, he moves colonies a lot, searches diligently for good locations (for both wintering and honey producing) and renovates combs religously (replacing with plastic foundation). He selects his own stock, feeds dry pollen supplement in open containers, winters only colonies weighing 85 pounds and pulls honey early and often.
Mr. King has used a custom extracting facility, but is putting in his own honey house, which will mean less flexibility, although perhaps a greater saving on those specific costs. He also recommends an insurance checkup and use of good quality barrels.
Major costs in Mr. King's operation are bee purchase, feed, extracting labor and supplies in that order. Other labor, utilities, fuels and repairs. A relatively major item is interest expense, a cost that returns little in increased production. His cost per colony is about $62.00.
The final speaker of the session was Mr. Tim Wendell, the only Canadian beekeeper on the program. Mr. Wendell only produces honey. He runs 40 two-story colonies in 50 locations, hives are grouped four to a pallat. He emphasizes carefully placing colonies to avoid drifting, the potential source of many beekeeping ills. Exclusively wintering in two-story colonies, his target weight is almost double that of Mr. King's (160 pounds), and he also pulls honey as often as possible, believing that extra comb space that is wet really stimulates the bees.
Mr. Wendell emphasized in his presentation the importance of analyzing the details of an operation.. He believes hired labor is usually cheaper than his own and says its economical to train labor even at $8/hour. His time he estimates to be worth $50/hr. Because of this philosophy, his labor costs are extremely high when compared to the other speakers. On a per colony basis they exceed by a factor of three the next largest expense, feed. His cost per colony, therefore, run just over $100.00.
A followup session to the above case studies was moderated by Dr. Spivak. Judging by the audience interest and questions generated, the presentations were well received. This reporter noted that this session did indeed represent a paradigm shift. Instead of beekeepers hoarding information, they were openly sharing it, exactly as described by Mr. Barlow in his opening presentation.
The success of this meeting will show the Board that its efforts in developing new relationships and more directly catering to its clientele, exactly what Mr. Barlow said in his opening remarks, were not in vain. And given the cutbacks in governmental assistance in all areas of agriculture, beekeepers will be increasingly reliant on their own resources to produce the vital information, (much from outside their field as predicted by Mr. Barlow), needed to prosper in the future. More seminars of this nature will not only ensure that beekeepers are up to date on emerging trends, but will also keep in place the single most important resource they can rely on for this assistance: the Honey Research, Promotion and Consumer Information Act.
© 1996, M.T. Sanford, "All Rights Reserved"