The business model of a beekeeping company is pretty straight forward: Keep the bees healthy and strong, move them to good crops, harvest and sell the honey. In some countries, like in the US, pollination plays a big part as well with farmers paying beekeepers a lot of money to move the bees to their crops so the trees get pollinated. There are other things you can do such as harvesting pollen and bees wax or breed and sell queens and hives to other beekeepers. However, 90% of the income of a German beekeeping operation comes from selling honey. For us, its almost 100% of our income – with the small exception of earning licensing fees of a machine for honey extracting my father invented, more on that later.

So when it comes to growing our income, there are basically three levers:

1. Increase the strength of each hive. Stronger hives bring more honey. Stronger usually means more bees in the hive. It’s not uncommon to have hives during the season that bring 3x the amount of honey in compared to other hives. The continous quest is always: How can we make all hives as strong as the outliers? This factors in breeding, location, varroa treatment and many other factors. This is the constant work and foundation upon which everything else is build.
2. Increase the number of hives. More hives bring more honey. The math is simple in theory: if you have 100 hives bringing in 50kg each, thats 5.000kg. If you have 1.000 hives bringing in 50kg each, thats 50.000kg. However, this math rarely works out. More hives can mean less honey per hive because you don’t have enough employees to look after more hives or you don’t have enough good yards or you can’t move the hives fast enough between crops because you don’t have enough trucks. So more bees means more honey but also more problems. You need to take care of those problems so that the honey harvest per hive is not dropping. Because if you have 100 hives bringing in 50kg each, you get the same amount of honey as 200 hives bringing in 25kg each – but you have almost double the costs to take care of 200 hives compared to 100. This lever is to be used cautiously and more often then not there are step changes involved: for example buying a bigger truck can enable more hives because you can move them faster or, even more important, finding that one new great employee that enables you to manage 500 more hives each season.
3. Increase the money you get for your honey. Also simple math: imagine getting 10€ per kg of honey compared to 5€. Double the income for the same amount of work. The price per kg of honey is dependent on many factors as well. Some you can control like the distribution channel and some you can’t like the market prices. We’re selling most of our honey in our own brand through grocery stores like Rewe, Edeka or Aldi. That involves a lot of work to bottle the honey and ship it compared to just selling the barrels to resellers but it enables us earn more money per kg. However, I think, the best price per kg can be earned by selling the honey directly to the consumer. If we sell the honey to a grocery store, we might get 4,5€ per 500g glas. The grocery store then sells it between 7€ and 10€ depending on their strategy. If we sell the honey directly to consumer, we can charge north of 8€ per 500g glas. In theory. Of course you have additional cost for running an online shop, shipping costs, marketing costs etc. It’s also harder to sell 50.000kg of honey direct to consumers than it is to sell 500kg because you need lots and lots of customers.

I think for us to grow while having healthy financial economics, we need to work on all three levers. Increasing the strength and number of hives has been ongoing. For now, the focus lies more on increasing the strength and I will write more about that as well.

Whats new is that we (re)start our online shop to sell the honey directly to consumers. I did that before as a side projects a few years ago but stopped because I didn’t have the time for it. Now, I thinks its a great step towards building stronger economics. It will need lots of work and take time to contribute significantly to our income but I have faith that it’s the right move. Feel free to check it out at www.geiger-honig.de.