Peek No: 25  
Jan 07, 2004 

Hello,

Celebrate the New Year with a sweet biz... Dip into Honey, the nectar of the Gods, one of the oldest foods known and loved by man. Today, production of honey is besieged by several problems like:

Falling margins
Rising costs
Shrinking colonies

In addition to these woes, the per capita consumption of honey is also fast declining.

Indeed, bitter trends in store for sweet Honey!

This week, our peek is aimed at resurrecting the appeal of honey.

But, first lets take a peek at our economy.

Factory orders

In November, orders to factories in the U.S declined by 1.4% to reach $336.9 billion. Durable goods orders also dropped by 2.5%. Orders excluding transportation were down by 1.5% and those excluding defense were down by 1.3%. Inventories dropped by - 0.2%, while shipments stood still.

Motor vehicle sales

Sales of light domestic vehicles in December witnessed a 14.9 million unit selling rate. This fares ahead of the 13.5 million unit selling rate seen in November. The incentives offered on purchases played crucial roles in the December sales spurt. The three big timers – Ford, GM and Chrysler – closed the year with a sales drop of 3.9%, 2.1% and 3.5% respectively.

Construction Spending

Construction spending increased by 1.2% to $934.5 billion in November. Public construction overtook private construction, posting an increase of 1.2% when compared with October. Residential ,Highway and Street construction formed the bulk of construction activities. These activities made an annual gain of more than 11.5% in November 2003. On the whole, the construction sector grew 7.4% in November 2003 as against prior year.

Happy Peeking!

Editor
Marketspeek
Executive Editor - Dr. Sharon Livingston
Editor - Vijay

 Week's Peek


Bees’ Biz

  • Honey can be presented in different grades:

    • Liquid
    • Crystallized / Granulated
    • Partially Crystallized
  • The different forms of honey are:

    • Blended honey
    • Crystallized honey
    • Whipped honey
    • Filtered honey
    • Organic honey
    • Raw honey
    • Strained honey
  • The different honey products are:

    • Deionized honey (removed ions)
    • Deproteinized honey (removed proteins)
    • Dried honey (dehydrated)
    • Honey extract (post-removal of selected components)
    • Honey spread (blended with ingredients)
    • Natural honey flavor (contains flavor constituents)
    • Ultra-filtered sweetener derived from honey (removal of most proteins, enzymes and polypeptides)
  • Honey contains several compounds that function as antioxidants, which play a large role in the prevention of cancer and heart disease. It also promotes tissue regrowth and reduces scarring.
  • In 2000 the rankings of key importers of honey in the U.S were in the following pattern:

    1. Argentina
    2. China
    3. Canada
    4. Mexico

     However, by 2003, the share of honey imports from these countries dropped. The reason for the shuffle in ranking is the lawsuits filed by American Honey Producers Association. These suits prevent China and Argentina from dumping contaminated honey in the U.S.

  • Imports – A sweet tale turning sour:
    Country
    % of Import 2000
    % of Import 2003
    Argentina
    51%
    8%
    China
    28%
    19%
    Canada
    15%
    14%
    Mexico
    2%
    9%
    Others
    4%
    50%


Vital Statistics

  • Over 300 types of honey are produced in the U.S. Honey finds its usage in beverages to contribute color, aroma and flavor.

  • Honey production in the U.S is on a decline for the last three years. The reason is the prevalence of severe drought conditions, leading to limited food supply for the bees.



  • California, Florida, North Dakota and South Dakota are the top honey producing states in the U.S. North Dakota is the largest honey producer in the U.S with 24 million pounds.

  • There are approximately 2.5 million colonies producing honey in the U.S. Yield per bee-colony averages 67.8 lbs. The yield is also seen to decline over the recent years.
  • Honey prices in the country increased to a record high in 2002, to 128.6 cents per pound, up 83% from 70.4 cents in prior year.

  • The U.S. is one of the largest markets in the world for industrial honey. The primary users of industrial honey are bakeries, health food, and cereal manufacturers. This sector accounts for approximately 45% of total domestic consumption.

  • The per capita consumption of honey in the U.S hovers around 1.30 lbs. The last few years have seen turbulent per capita consumption. The cyclical ups and downs indicate the lack of a consistent demand in the market.

  • The number of colonies in the U.S is decreasing due to:

    • Rising production costs
    • Prohibitive costs to maintain
    pest-free colonies

Analysis

Hunting for Honey pots

  • As the existing avenues of usage of honey have been exploited, apiarists can focus on the healing properties of honey. These properties can be used to promote consumption of honey even among non-users.
  • Honey has somehow not made it to list of the staple foods consumed by households. The honey colonists can work with food producers to popularize honey-based dishes. The rich content of vitamins and enzymes in honey – which are key to a healthy life, can be the underlying theme for promotion.
  • Marketers can take advantage of the bactericidal properties of honey to promote increased consumption, especially among children and the elderly.
  • Food manufacturers can substitute honey for sucrose in food products while targeting customers ailing from diabetes.
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   Wish I Were

Rewards for Retirees

Jeremy Lundberg and Joel De Grands were co-workers at a health care support company. Caught in the daily maelstrom of activities frustrated both. They had concerns about the seeming lack of interest of their employer in improving the quality of educational and training software. They felt that there was a better way to apply the e-learning technologies to serve the medical, biotech and pharmaceutical sectors. Not stopping with thoughts, they decided to do something with the idea.

They started their business with focus on positioning. The positioning paved way for chalking apt sales plans and in coming up with innovative marketing pitches. Instead of trying to seek outside funding, the twosome focused on their core business - named DLC Solutions.

It was a sluggish time of the economy and many software start-ups were closing down. But DLC Solutions enjoyed a remarkable first year, generating $1.3 million in sales.

The success of the business enabled Joel and Jeremy to hire their first full-time employee and they moved into a new office complex. Since then there was no looking back. DLC grew at an astonishing rate. Now the company offers seven products and two services. The array includes presentation web casting, online testing, CD-ROM development, virtual patient case studies and document management.

DLC’s clientele has expanded to Fortune 100 pharmaceutical and biotech companies, major medical associations and leading patient advocacy organizations. The company also secured contracts to provide online health training for a major pharmaceutical oncology franchise. DLC is also the first to develop a professionally moderated online chat support groups with The Wellness Community-National.

No wonder Jeremy feels ecstatic about going to work and every time he gets to hear his alarm bell ring, he rises, charged up, for some sound planning and actions.

For further reading:

http://www.score.org

http://www.dlc-solutions.com

http://washingtondc.craigslist.org/eng/20704739.html
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   BrandFact

The brothers Robert, James and Edward founded Johnson & Johnson in 1885 for the manufacture of surgical tapes.
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  This Week that Age

6th January 1914 - Stock brokerage firm of Merrill Lynch founded.
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  Insight

Blessed is he who has found his work; let him ask no other blessedness.
-- Thomas Carlyle
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