Honey is a sugary and viscous syrup produced by honey bees. For the past several years, honey has always been regarded as a substance comprising of several health benefits. It has been vastly used for medical as well as nutritional purposes.
However, there has always been a controversial debate surrounding honey regarding the category of honey in use. Basically, there are two major categories of honey: Organic Honey and Commercially produced honey.
What is Organic Honey?
Organic honey can be defined as “honey present in the same state as it is existent in the bee hive”
A wide majority of people bear the opinion that organic honey is superior for optimal health. This type of honey is made by pouring honey extracted from honeycombs over a nylon cloth in order to filter impurities such as dead bees or bees wax. Organic honey preserves the majority of the nutrients and healthy properties in their natural form.
Difference between Organic and Commercial Honey
Organic honey is only strained before its bottled, which leads to the preservance of the majority of the beneficial nutrients and antioxidants that are present in the natural form.
In contrast, commercially produced honey undergoes various steps before it is finally bottled. Two important steps include pasteurization and filtration.
Pasteurization involves applying high temperature to the honey in order to eliminate the yeast present in it. This assists in extending the shelf life and makes it much more smoother as well. The latter one, as the name suggests, involves filtering out more impurities like air bubbles or extra debris. This makes sure that the honey preserves its clear liquid form for a longer period of time.
The filtration part can be extended and additional stages may be carried out for refining the honey and increasing the smoothness and transparency of the product. However, this variety of processing also eliminates the beneficial nutrients present such as enzymes and pollen. In some cases, the manufacturers also add bi-products in the form of sweeteners and sugar in order to reduce honey costs and increase quantity..
Mostly commercially produced honey lacks any pollen which is, undoubtedly, the main constituent of honey. Honey bees collect nectar and pollen from flower to flower and eventually take them back to their bee hives. This bee pollen contains around 250 nutritious substances including antioxidants, amino acids and vitamins.
Recent studies suggest that bee pollen encompasses a list of health benefits. It improves liver functioning and also assists in fighting inflammation and heart disease. Regrettably, commercially produced honey lacks all these properties since the pollen is already eliminated via heat treatment and filtration processes involved.
How big is the market size for organic honey?
A recent research report based on the research conducted by Fact.MR predicts that the global honey market is expected to witness an immense growth during the upcoming span of four to five years. The report also holds that organic honey sales from the US to other countries are expected to generate over $160 Million revenue for the country.
The overall demand for organic honey has observed a tremendous upsurge in different industries including cosmetic and pharmaceutical industries. Organic honey is serving as a major ingredient in numerous medical products on account of its versatility and healthy benefits. At present, organic honey is being used in a wide range of food products as a probiotic, antioxidant and clarifying agent.
According to a research conducted by the WHO, over 1 billion people across the globe were subjects of obesity in the year 2016. Various organizations have begun focusing on increasing awareness and consciousness among the society regarding the necessity of maintaining a healthy diet. Since honey has proved to be a healthy substitute to sugar in numerous food products, it is very conceivable to witness an upsurge in its demand.
What is a typical profit margin?
The honey market is such a versatile market that marketing organizations solely maintain their own rates and prices and sell/distribute different quantities and categories of honey. The prices are set based on factors including marketing and purchasing costs, the level of competition and most importantly profit margins.
It is observed that the raw material employed in producing organic honey has a noticeable effect on return of the net profit margins to the total cost spent by organizations. The profitability is much higher when comb honey is employed as the raw material whereas the profit margin drops in case of partially drained honey being used as the raw material. This profitability can be related to the low costs of comb honey in most locations.
Even though the cost-effectiveness of honey comb businesses diverges depending upon the raw material used and other factors, the profit margin is mostly attributed to be greater than 18%. Profitability greater than interest rate of 18% is considered an indication of economic proficiency and price efficiency.
What are the current challenges?
In spite of the enormously positive profitability obtained from organic honey sales, there are a few challenges faced by honey producing and marketing organizations that intend to reduce the profit margins. Some prominent issues include:
- An absence or lack of transportation for expanding sales.
- A deficiency of capital for paying the suppliers on delivery.
- Shortage of packaging materials.
- Slow turnover rate.
Which countries are best for starting an Organic Honey business?
Among all continents, countries belonging to Europe have proven to be the most profitable regions for organic honey businesses. The net dollar value worth for honey exports during the year 2016 was approx. $825.3 million, accounting for a huge 36.8% of the total organic honey sales. The remaining percentage ratios included 14.5% export worth from Latin America, 23.5% from Asia and 10.6% from Australia and New Zealand.
The countries that exhibit the best dollar value worth for organic honey business are as follows:
- China: US$276.6 million (12.3% of total natural honey exports)
- New Zealand: $206.7 million (9.2%)
- Argentina: $168.9 million (7.5%)
- Germany: $144.9 million (6.5%)
- Sierra Leone: $142.4 million (6.4%)
- Spain: $109 million (4.9%)
- Ukraine: $108.2 million (4.8%)
- Mexico: $93.7 million (4.2%)
- Brazil: $92 million (4.1%)
Thus, the aforementioned regions and countries are considered as the best regions for starting an organic honey business.
Significant Market Players:
As of today, some prominent players of organic honey businesses include:
- Wedderspoon Organic Holdings,
- North Dallas Honey Company L.P
- Little Bee Impex
- Barkman Honey LLC.
- Heavenly Organics
- S. Eco Bee Farms
The Bottom Line:
Considering the vast usage of organic honey in various industries, we can declare with confidence that initiating an organic honey business is one of the most profitable entrepreneurial ideas in the modern age. Moreover, revenues generated from organic honey sales in food & beverage sector are destined to be higher than the mutual revenues from those generated in cosmetic, pharmaceuticals sectors.