Beekeeping Business
Business Plans Handbook. Ed. Lynn M. Pearce. Vol. 16. Detroit, MI: Gale, 2010. p15-19.
Copyright: COPYRIGHT 2010 Gale, Cengage Learning
Full Text: 
Page 15

Beekeeping Business

B. Strand's Bees

102 Georgetown Road
Montgomery Corners, Illinois 61022

Paul Greenland

B. Strand's Bees raises bees for the production of products such as honey and beeswax, and for crop pollination services.

EXECUTIVE SUMMARY

Business Overview

Owned by Bill Strand, B. Strand's Bees raises bees for the production of products such as honey and beeswax, and for crop pollination services. Our business relies on the performance of 500 honey bee colonies. Of these, some remain at our location in Montgomery Corners, Illinois, while other are relocated at different times throughout the season, depending on the needs of the orchards and farms to which we provide pollination services.

Savvy product marketing is critical for successful beekeepers. Over the years, the B. Strand's brand name has become well known in our region thanks to an identity and related product packaging designs developed by a local advertising agency. We market the majority of our products to well-heeled tourists who visit the neighboring town of Brendenwood, Illinois, where Bill Strand's wife operates a separate but affiliated gift shop operation called The Busy Bee.

B. Strand's is a relatively small operation. Our competitors include other beekeepers in northwestern Illinois who sell their products at farmers markets, organic food stores, and other locations, and rent their hives/provide pollination services to area orchards and farms.

MARKET ANALYSIS

Our operation is located in the town of Montgomery Corners, Illinois, in Davis County. We are only a short distance away from the historic town of Brendenwood, a popular tourist destination marked by nineteenth century architecture, unique shops, restaurants, B&Bs, wineries, and more.

The majority of the honey and beeswax that we produce is sold through a gift shop in Brendenwood named The Busy Bee, which sells candles, beeswax, honey, and bee-themed merchandise. Owned and operated by Bill Strand's wife, Leah Strand, this separate but affiliated retail business Page 16  |  Top of Article provides us with a unique channel to sell our offerings to tourists, many of whom have large disposable incomes.

Our competitors include other beekeepers in northwestern Illinois. Leading the competition is Webster's Bee Farm, a large commercial operation with 2,500 colonies. Super Bees (1,500 colonies) and Henry's Honey Haven (1,250 colonies) are two other sizable operations in our area. While most of our competitors market their offerings on a regional or national basis, we mainly focus on supplying our affiliated retail operation with branded products, and serving a few local orchards and farms.

INDUSTRY ANALYSIS

According to Midwestern State University's College of Agriculture, the United States is home to roughly 150,000 beekeepers. Collectively, they own about 3 million colonies of honey bees. Large commercial beekeeping operations maintain as many as 2,000 colonies.

The beekeeping industry provided limited employment opportunities during the mid-2000s. However, at that time a significant number of commercial beekeepers were nearing retirement, providing opportunities for new individuals to "learn the ropes" and take over their operations.

Many beekeepers belong to beekeeping clubs at the county level, or belong to one of three regional societies. These include the Heartland Apicultural Society, the Western Apicultural Society, and the Eastern Apicultural Society. At the national level, beekeepers may belong to either The American Honey Producers' Association or the American Beekeeping Federation.

MANAGEMENT

B. Strand's is headed by owner Bill Strand. Bill Strand acquired the operation in 2002 from his father-in-law, Stephen Goers, who established the business in 1984 under the name Bee Line Bees. Goers has since retired, but lends occasional assistance and expertise as needed. Strand's wife, Leah, who operates an affiliated gift shop in a neighboring town, also lends occasional assistance but is not an employee. Bill Strand is a member of both the American Honey Producers' Association and the American Beekeeping Federation.

PRODUCTS & SERVICES

Our operation produces approximately 30,000 pounds of extracted honey each year. The majority of this is packaged and sold as traditional liquid honey under our brand name. In addition to liquid honey, we also sell:

  • Comb honey, which remains in the edible honeycomb.
  • Whipped or creamed honey, which can be spread like butter.
  • Chuck honey, which is liquid honey with pieces of honeycomb remaining in the jar.
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We also sell beeswax to several area businesses that use it to produce candles, soaps, and other items.

Finally, we rent our bees out to a number of area farms and orchards throughout the spring and summer months.

OPERATIONS

B. Strand's Bees is located in a rural area, in close proximity to a number of orchards and farms to which we rent colonies for the purposes of pollination services. Our business is located on a plot of land that includes three outbuildings.

The success of B. Strand's Bees literally rests upon the wings of our bees. Specifically, we rely upon about 500 colonies of Italian honey bees. In addition to an excellent reputation for honey production, this type of bee resists disease more effectively than German bees and is less defensive, making it the bee stock of choice in the United States.

Our honey bees reside in beehives known as supers, or wooden boxes that contain a series of frames. Each colony consists of an egg-producing queen bee, hundreds of drones, and as many as 50,000 worker bees. On average, we are able to harvest about 75 to 80 pounds of honey from each colony per year.

Hives must be inspected on a regular basis to monitor production and detect potential problems. A number of pests pose potential threats to our business, including tracheal mites, varroa mites, wax moths, and small hive beetles. In addition, we must monitor hives for diseases such as European foulbrood and American foulbrood.

Although some may assume that beekeeping is a seasonal endeavor, we operate our business year-round. In the spring we focus on caring for old hives and establishing new ones. For hives with low food supplies, we provide them with a syrup consisting of sugar and water until they are able to begin producing honey. At this time we also acquire new bees from dealers and move them near sources of nectar, such as clover fields and orchards.

Honey is first harvested late in the spring or during the early summer months, at which time a mild, light-colored crop is produced. A second harvest follows in the fall, producing a darker, more flavorful honey. During the fall we prepare our hives for the winter months, at which time we perform maintenance on our equipment, analyze records, and engage in planning for the following season.

We utilize a wide range of equipment to carry out our operations. In addition to protective clothing, special tools, supers, and frames, we also rely upon a forklift, as well as a large truck used for making deliveries.

One important aspect of our operation is honey packaging, which is performed in a dedicated outbuilding. In addition to placing honey into jars, we also place our branded label onto containers. Labels include information such as the grade and weight of the honey, along with our contact information.

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FINANCIAL ANALYSIS

Budget
Receipts
 
Honey
Pollination fees
      Spring hives
      Summer hives
Wax
 
      Total receipts
 
Variable costs
 
Bees (replacement bees)
Queens (replacement)
Insurance
Chemical for fume boards
Jars
Labels
Marketing
Parasite and disease control
Registration fees
Sugar
Vehicle costs/maintenance
 
      Total variable costs
 
Fixed costs
 
Equipment
      Brood boxes and frames
      Extracting equipment
      Feeders
      Fume boards
      Hive tools/smokers
      Honey supers/frames
      Protective clothing
      Queen excluders
      Top, bottoms, and inner covers
Facility Upkeep
 
      Total fixed costs
 
      Total costs
 
Returns
 
Returns over variable costs
Net returns
                      
 
$60,000
 
$12,500
$15,000
$     500
 
$88,000
 
 
 
$  4,500
$  1,200
$     500
$     825
$  9,500
$  2,000
$  1,000
$  8,520
$     100
$  1,250
$  5,750
 
$35,145
 
 
 
$  9,500
 
 
 
 
 
 
 
 
 
$  6,500
 
$16,000
 
$51,145
 
 
 
$52,855
$36,855

LEGAL

Per the Illinois Bees and Apiaries Act, our business is required to register our bee colonies with the Illinois Department of Agriculture, which provides free inspections in order to identify pests, diseases, and to recommend treatments. This service is provided as part of the Illinois Bees and Apiaries Program.

In addition to adhering to state regulations, we also have secured liability insurance from an agency recommended by the American Beekeeping Federation. Such coverage is necessary in the event of a lawsuit related to the consumption of our honey products, or in the event that a visitor to our facility has a negative reaction to a bee sting.

MARKETING & SALES

Over the years, the B. Strand's brand name has become well known in our region thanks to an identity and related product packaging designs developed by a local advertising agency many years ago.

Page 19  |  Top of Article

Because the majority of our honey production is earmarked for resale through The Busy Bee, our affiliated retail operation in Brendenwood, Illinois, B. Strand's Bees does not engage in direct-to-consumer marketing. Beyond The Busy Bee, we have established relationships with several grocery stores and farmers markets in neighboring towns that carry our honey products.

On a similar note, little marketing is needed for our pollination services. Because the wild honey bee population has been severely impacted by pests and diseases, there is ample demand for our domestic honey bees. As an established operation, we have relationships in place with several area orchards and farms that rely upon our colonies for the pollination of pumpkins, apples, melons, blueberries, and cucumbers. Our marketing consists mainly of relationship building activities. Throughout the season, we pay occasional visits to the orchardists and farmers with whom we normally work in order to stay visible. On occasion, we bring complimentary honey products to them for their enjoyment, and take them out for lunch.

SWOT ANALYSIS

  • Strengths: We are an established operation with a unique retail outlet through which we sell the majority of our honey and beeswax.
  • Weaknesses: We are a relatively small beekeeping business, limiting our ability to provide pollination services to larger orchards and farms.
  • Opportunities: Because pests and disease have virtually eliminated wild honey bees in our area, there is ample demand for pollination services provided by our domestic honey bees.
  • Threats: Pests and disease are potential threats to our operation.
Source Citation   (MLA 8th Edition) 
"Beekeeping Business." Business Plans Handbook, edited by Lynn M. Pearce, vol. 16, Gale, 2010, pp. 15-19. Gale Virtual Reference Library, http%3A%2F%2Flink.galegroup.com%2Fapps%2Fdoc%2FCX1359200010%2FGVRL%3Fu%3Dcarnegielib%26sid%3DGVRL%26xid%3D8b1f22b5. Accessed 16 July 2019.

Gale Document Number: GALE|CX1359200010

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