A Beekeeper's Diary

Okay.  Okay.

In response to overwhelming demand, I'll take a minute and explain what  I figured would solve everyone's problems, and suggested to Don Cozine.  I figured that this approach could double the Co-ops' volume, increase returns, and make everyone happy.

As I mentioned previously, my suggestion was rejected without no further comment except, "That would be good for the producers, but not good for us" from the previous BeeMaid CEO, Don Cozine.  (I can't find the emails right now -- it'd take me longer than to write this -- or I'd quote them).

Up to that point, I had great hopes for Don, but, after reading that response, I could see that Don had gone over to 'the dark side' of our Co-op culture.  He was unable to resist the pressure and I could see that the Co-ops would increasingly struggle in current and future markets.   I realized that the Co-ops could even very possibly go down, and go down hard, one of these days, taking all of their members assets, including savings, with them.  

I began also to see, in light of other revelations, that the Co-ops are dominated by people who live in the past, and don't begin to perceive the immanent risks (or opportunities) that have come in the past decade, under globalization and international trade.  Our Co-op has obviously been dwindling away over recent years, but it is now becoming clear that it may well not survive the first decade of this new millennium.  Globalization has outclassed the management and the outdated policies that run the Co-op.  The Co-ops, and especially BeeMaid, are still running under an old paradigm.  They operate on rhetoric and punitive policies, rather than on an open, enlightened approach and rewards.  It seems that they are planning for the past, not the future.

I suggested that the Co-ops need to consider the following:

• Some beekeepers need to know what they will get for their honey, particularly if they are just starting out, have short crops, or are retiring and cannot take a chance on missing a good market.
• There are many honey markets that beekeepers can sell into, and BeeMaid is well positioned to deal with them.
• BeeMaid needs to know what it pays for honey in order to be able to price properly and also to compete fairly and not destroy the market for other competitors who support the price of honey by buying from Canadian beekeepers.
• AHPC has a HACCP approved warehouse, a good lab and staff.
• The Co-ops should be running BeeMaid, and not the other way around.  After all, the members are the owners.
• Running a honey packing plant is only one way of marketing honey, and one that is increasingly vulnerable in today's' global market.
• There are numerous ways of adding value to an agricultural product.  None of them require ownership of a plant.
• Owning and managing plants to pack honey are a distraction from other modes of marketing and are expensive in other ways, especially when these functions can be contracted.
• In recent years BeeMaid has become a liability, rather than an asset -- BeeMaid  is destroying value (selling honey below its market value on average) rather than adding value -- and that very organization which is a liability, is in charge of running the Co-ops!  Think about this.  It is central to the problem.  Again, packers dominating producers!

(I've run out of time -- had a visitor that took up a couple of hours -- so I'll cut to the chase and leave a lot out.  Consider it a test of your creativity and business acumen, folks).

Therefore it seems to me that AHPC and the Manitoba Co-ops should

• Get a Mission statement.  Should include: work with producers and industry, high quality product, orderly market and firm prices, superior return.  Dunno, I'm out of time.  How about you write it and send me a copy?
• Take control of BeeMaid and bring it to heel. Currently, the tail (BeeMaid) is wagging the dogs (the Co-ops)
• Shift BeeMaid away from being primarily a packer and remake it into a real marketing organization, or start a parallel, and competing marketing arm.
• Make BeeMaid's packing operation budget for, bid for, and pay for honey like any other packer.
• Expect BeeMaid to return a profit above what it pays (more later) and make BeeMaid management pay a direct function of BeeMaid's performance.

Here are some more clues:

• Take in as much honey as producers will offer.  (More on pricing later...)
• Eliminate the BeeMaid drums and get a supply of uniform, high quality, lightweight expendable export drums.  The current drum system wastes time, distracts from other, profitable activities, and limits options for members and for the Co-ops themselves.
• Classify operators according to premises and COFFS type procedures followed.
• Grade, test, sort and inventory the product on arrival or by samples submitted.
• Offer inspection and extension services to producers to help them improve product.
• Offer bulk honey at auction and/or using a sales force using all possible channels, and dealing with all possible customers, including competitors.  Hire some current competitors or their staff -- ones who have proven capable, if possible.
• Charge producers the cost of tests and certification, plus monthly storage costs.  Some honey could be stored on producer premises but be sampled and tested by Co-op staff.
• Handle billing, shipping, manage risk, insurance, and receivables centrally.
• Sell on basis of the test results, producer ratings, plus colour, flavour, etc.  Earn a reputation for fairness and impartiality and the benchmark for Canadian quality.

Pricing: 

• Some producers want to get the average market return.
• Others want to be able to sell to the highest bidder.
• Many want to use a mixture of the two methods.

This is why the current Co-op system fails again and again.  The current system does not meet the needs of all producers all the time, and also does not suit the needs of the packing organisation.  The current system has everyone pulling in opposite directions.  What is needed is a system that allows everyone the freedom to pursue their needs and makes the Co-ops the best vehicle to achieve those ends.

Therefore, give the people what they want:

• an option to either take an average price, or
• the option to place their honey on bids or
• any combination of the two.

Here's how I envision it:

• A beekeeper takes delivery of new or like-new lightweight drums of a standard colour and weight, and pays for them, or charges them.  He/she then owns them.
• The Co-op would administer a COFFS or COFFS-like program to ensure premium price and quality from members.
• After filling, the beekeeper (who is registered with the Co-op under some arrangement) can deliver wherever he/she wishes, or depending on contracts, incentives, etc. decided to ship or list the specific product with the Co-ops.
• The beekeeper declares amount, weights, quality, etc. on a manifest and commits to sell under contract, specifying either average price, or specifying certain amounts or lots are available at specific prices and for specific times.
• The Co-op organizes and publishes the result (or not), then matches with buyers if any, until the amount available at that time is all committed.  Sellers and buyers are matched by price and quality.
• Quality is inspected and certified by the Co-op.  Deliveries, shipping, billing, finance, etc. are all handled by the Co-op, thus protecting individuals.
• BeeMaid continues to pack and sell, as always, but purchases by the same bid system according to the immediate needs and prospective market.  BeeMaid profit or loss or is determined by the operating statements, as in any business.  Profits are returned to be shared among members on a poundage basis, just as the bee supply profits currently are.
• The Co-op handles Advance Payments for Crops, as always.
• Beekeepers can take their honey out of the Co-op at any time and sell it direct, but would be billed the service charge for the testing, certification, etc., and by assuming liability for the advance.

Why this will work:

• Beekeepers have the advantage of marketing under the name and financial clout of a large organisation and a respected name, with many price and timing options, from taking a pool price to selling at market price.
• Buyers are assured of quality and fair dealing and backup in case of problems, and a one-stop reliable source of supply.  (Amount of that supply will be dependant on offering price).
• BeeMaid (the packing arm) will know its cost of goods and compete fairly in the market.  Probably the cost would be lower than the current estimates.
• Beekeepers will be able to set their own price, and take a chance on not selling if they set it too high.  They could also offer some "at the market", and take whatever is offered, or choose to have the Co-op pool it and take the average of a pool price.  (Note that many --even most -- beekeepers are happy to take a chance and offer their honey at lower prices than the Co-ops ultimately earn, but complain nonetheless.  This would fix that problem).

Anyhow, that is my contribution.

If this system had been in place last year -- as I suggested when I saw the situation shaping up -- one man and a phone would never have been able to beat the Co-ops at what should be their game.  As I see it, under this system, once the details are worked out, virtually all the honey in western Canada would voluntarily move under the auspices of the co-ops, due to the advantages offered, and the producers, buyers, BeeMaid -- and its competitors -- would all be happy.

---

It is time for the Co-ops to take charge and re-invent themselves, before they fade into oblivion, destroying more and more of the members' money and wasting opportunity in the process.

Allen's
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From: glen ackroyd 
To: doug mcrory etc. 

Please redistribute, since CHC has been notified that CFIA have not received a single example of mislabelled Honey product.

CFIA need our feedback and example of misrepresented or mislabelled honey or honey products. Please search out your local grocery stores or any place honey is distributed and gather samples and forward them to the CFIA at the address specified below ASAP.

Glen Ackroyd 
Ontario Representative to the Canadian Honey Council

Thank you in advance, Glen Ackroyd
Canadian Honey Council representative from Ontario
Virginia Steckle Business Administrator Bayfield, ON N0M 1G0 519-565-2622 Fax: 519-565-5452
Email:
http://www.ontariobee.com

Hi Allen

I’m very surprised to read on your diary the letter coming from a guy in Manitoba.

I’m also a Co-op member in Manitoba and I also feel very angry with BeeMaid and our honey price payment drop.  It would be good to let this gentleman know that he’s not alone. I’m very happy to see that there is at least one person who came to the same conclusion that I did.

It is now apparent that I also wrote the same type of letter last week to the Manitoba Coop President (Phil Veldhuis) hoping to get a justification for the big difference between the previewed price and the final price (this difference being a great disadvantage to the producers) .  I’m still waiting for the answer.  I’m really disappointed by Bee-Maid attitude.

I’m one of the twenty-four members who produce over 100,000 pounds of honey and I would like to see others writing a letter to the Co-op, asking for explanations.

I’m a beekeeper and a business man, I’m not a non-profit-organisation.  I have to take economic decisions if I want to keep my business running.   The Bee-Maid board have to understand that we need to make a budget every year to plan our business activities, and the deadline for this is December 31st.  By moving down the honey price 13% in such a manner, they have jeopardized my future in the honey business.

In August 2002 (when all honey was already barrelled !!), when the price was going crazy, I was most surprised to receive a letter from Bee-Maid announcing an incredible price of a minimum of 2 dollars per pound.  The price was going crazy and the beekeepers too because at this time they were being solicited by open market buyers.

This was very attractive.  It is my opinion that the Co-op. produced the 2 dollars price to stop a haemorrhage of members.  It was an emergency.   The only way to keep members was to commit on a price and that’s exactly what they did.  They promised 2 dollars and we got 2.07 dollars a pound, and I’m very grateful to them.  Bee-Maid behaved exactly the way we needed.

The above mentioned pricing policy is not a stable long term strategy.  The Co-op. needs to be more attractive to its members.

The way they did, last month with our price break-down is not a good manner in which to keep members.  There is a great possibility that I will ship in the open market, next year 

I understand the sense of isolation of the other Co-op member who communicated with you.  I feel exactly the same way.  We live very far from each other, resulting in a lack of communication between individual members.   Manitoba Co-op. is a “very heavy machine” and with only two meetings a year, there is no way in such a limited time to get the real point of view of the members.

In my opinion for the Co-op, to bring back its lost members, it needs as a minimum to put in place a fixed honey price policy.

Name withheld by request

The thought struck me from last fall when I told you of all the  BEE MAID HONEY that was sitting in the corner of the warehouse at Sioux Honey.

Ever wonder what that was all about? 

Yup. Sure have,  No answers, though.  I have some Canadian friends in  Sioux and they always have gotten more than those of us in the Canadian Co-ops.  Sioux threw out everyone on staff a few years back and started over.  IMO. that is the only way to change a bad corporate culture.  

Unfortunately, here in Canada, the bad culture starts with the membership.  The major criterion for being elected to the AHPC board is to be able to claim to always ship 100% to the Co-op.  IMO, that one criterion is negatively correlated to business management and marketing knowledge, the qualities required in a board.  The very people who are rejected by that criterion are those who have real world experience in honey markets.

Allen's
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Medhat called to say I was missed at the meeting.  He says they are planning to run a limited test this year on the patties, using package bees.  That makes sense to me, since it is already too late for many wintered hives, since a lot of the potential study the participants are out putting on patties right now.  There is lots of time to do some summer tests and also some fall applications.  Next year, the group will have a better idea how to take a look at spring feeding.

He also says that the money -- over $200,000 over three years, if I understood correctly -- came through for oxalic and formic work, so he will be pretty busy.  He will also be getting an assistant since the Alberta government has set aside some budget for the position. 

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