2014 NAMA Student Marketing Competition

Executive Summary Presented by The University of Florida NAMA Student Chapter

Austin Blais-Bishop

Oran Lott Bullock

Thomas Cawiezell

Caroline Dailey

Frank Peter Dola V

Andy Escobar

Michael McQueen

Edwin Lawson Mozley III

David Myers

Andrea Paniagua

Monica Petrella

Nathaniel Tyner

Austin Blais-Bishop

Oran Lott Bullock

Thomas Cawiezell

Caroline Dailey

Frank Peter Dola V

Andy Escobar

Michael McQueen

Edwin Lawson Mozley III

Editorial Advisors:

Dustin Bass

Jennifer L. Clark

According to Honey Bee Research and Extension Laboratory at the University of Florida, varroa mites are

considered to be are considered to be a primary contributor to the recent decline in honey bee health and

increased colony losses worldwide. By feeding on their hemolymph, this mite directly damages bees and vectors

numerous honey bee viruses. The USDA reports that 10 million bee hives at an approximate value of $200 each

have been lost since 2006. The Public Broadcasting Service (PBS) has stated that since 1986 varroa mites have

created an economic impact of more than $12 billion for the agricultural industry. The loss of colonies for honey

producers, as well as more traditional agricultural producers who depend on bees for pollination of their crops, is

a critical issue facing the bee industry today. The current situation consisting of declining bee colonies, as well as

an increase in the value of many agricultural crops, has led to a burgeoning market for beekeepers’ pollination

services. These services facilitate $19 billion worth of crops annually according to U.S. Fish & Wildlife Service. In

California alone, the almond industry demands 1.6 of the 2.62 million bee colonies in the U.S. annually to support

pollination of almond groves.

SecureAg, based in Atlanta, Georgia, has been producing chemical-

based solutions to meet agricultural industry needs since 1984. We are

excited to introduce a integrated solution to the commercial

beekeeping industry designed to combat the negative effects associated with varroa mite infestations.

CheckPoint® is a miticide delivery system aimed at eradicating the varroa mite infestations plaguing commercial

beekeepers. CheckPoint® incorporates a permanent housing mechanism designed to easily mount onto the

entrance of each beehive. Replaceable panels permit

bees to enter and exit the hive through premade holes

delivering a safe dosage of miticide to each individual

bee, eliminating over-application and toxicity problems.

Three separate chemicals rotated annually and infused

into the panels will prevent resistance issues. CheckPoint®

will decrease labor costs, require no hive modifications

and provide beekeepers with an opportunity to solve

their varroa mite problems. Beekeepers in the U.S. will be

buzzing about the simple, efficient, and reliable

CheckPoint® varroa mite control system.

Randy Oliver, creator of Scientificbeekeeping.com and owner of owner of a 500 colony migratory operation in

California, states that 300,000 beekeepers manage 2.6 million colonies of bees within the U.S. Beekeepers can be

categorized into three primary groups: commercial beekeepers, sideliners, and hobbyists. Commercial

beekeepers are a concentrated group making up less than one percent of the total number of beekeepers in the

U.S. They are responsible for managing more than 60 percent of active hives in the U.S. Commercial beekeepers

depend on bees and bee-related products as their primary source of income. The sideliner group in the

beekeeping industry typically manages less than 500 hives per beekeeper. This group does not exclusively rely on

bee products and services as their primary source of income, instead they are diversified into alternative income-

producing activities. The hobbyist group typically manages between one to ten hives each and does not

depend on beekeeping as a source of income. However, in sheer numbers, the

hobbyist category, according to Buzzing Across America, comprises 95 percent of the

beekeeper population in the U.S.

“Beekeepers who currently are replacing up to a third of their hives annually desperately need

an effective solution to the varroa mite epidemic.” - Joseph Roberts, CEO, SecureAg

Target Market

Our primary target market consists of large-scale

commercial beekeeping operations within a

regionalized market segmentation, concentrating

primarily on states with the largest commercial

beehive populations that share similar climate-

dependent honey flow seasons.

Market Situation

Commercial beekeepers dominate the market value ($) and market share (number of hives) demanding bee-

related products and services. This group represents the early adopters and primary influencers of new products

and technologies promoted in this industry. Commercial beekeeping can be defined as a niche market that

creates the need for companies to heavily invest in brand value and product loyalties. Because commercial

beekeepers represent such a substantial influence in the adoption and use of new products they are considered

to be our primary target market. Sideliners and hobbyists in this industry tend to follow the lead

of commercial producers and represent a secondary market for new products and

technology.

Primary Influences

Commercial beekeepers use several reliable sources of information when researching new

products and husbandry practices. Trade shows and educational conferences allow input

suppliers and servicers the ability to reach customers face-to-face and disseminate

educational product materials. These trade show and conferences are typically hosted by

beekeeping and honey production associations such as the American Bee Federation (ABF),

the American Honey Producers Association (AHPA), and the American Beekeeping Federation. These

associations work nationally on behalf of the beekeeping industry on issues affecting the national interest and

economic growth within the many sectors of the bee industry.

In addition to national beekeeping organizations, there are three regional-level apiculture societies: the Eastern

Apicultural Society (EAS), the Western Apicultural Society (WAS), and the Heartland Apicultural Society (HAS).

Locally, each state has their own beekeeping federations, as well as several local and regional-state associations.

An example of such is the Florida State Beekeepers Association (FSBA), which has nearly 700 members in over 28

counties in Florida. Like many other state associations, the FSBA publishes a quarterly newsletter, The Florida

Beekeeper. This publication includes current local news and advertisements, representing an important

educational resource that is a popular way for beekeepers to obtain relevant market information. Other popular

national-level magazines include the American Bee Journal and Bee Culture Magazine.

Commercial beekeepers depend on established relationships with independent beekeeper supply distributors to

receive information about the newest products on the market. This interpersonal dynamic permits independent

distributors and commercial beekeepers to build and maintain strong relationships based on reliable word-of-

mouth production experiences and experimental field trial results. Smaller beekeepers, such as hobbyists and

sideliners, also receive new product information through word-of-mouth, but tend to follow commercial

operat ions’ methods and adopted

management strategies.

Market Size

The top five commercial beehive populations

are located in: North Dakota, South Dakota,

Florida, California, and Minnesota. States in

close proximity to these substantial commercial

beehive populations form SecureAg’s regional

distribution areas. Commercial beekeepers in

these regions currently receive products from

established independent suppliers who have

shipping, stocking, and wholesaling logistics

already in place.

Goals

Attain 75% brand recognition by year 3

Achieve $5 million in sales by year 3

Achieve 35% profit margin by year 3

Achieve 93% customer satisfaction

*Restricted usage in CA, NY, FL, MS, WA, TX; prohibited in NM **Annual Cost/Hive is 3 year depreciated housing plus panels

CheckPoint® is a revolutionary

miticide delivery system consisting

of a housing component and

in se r t ab le po lymer pane l s

designed to provide a more

effective and less toxic varroa mite

treatment.

Industry standards dictate that

chemically-formulated trays, strips,

or panels be sold in packages of

ten units. Non-synthetic miticide

treatments within the beekeeping

industry, typically used by hobbyists

due to labor intensity, include

formic acid and sugar-cinnamon

combinations.

SWOT Analysis

Strategy Statement

SecureAg will provide a simple, efficient, and reliable varroa mite control method by launching Checkpoint®, a

complete miticide delivery system. We will meet existing demand by using our established position as an

agricultural chemical supplier capitalizing on existing relationships within the commercial beekeeping industry.

Key Planning Assumptions

All commercial beekeepers in the U.S. use hives with standard

entrance dimensions.

Industry standards exist for treatment of pests and diseases fol-

lowing published best management practices.

CheckPoint housing has a useful life of 3+ years.

Product

For commercial beekeepers across the U.S., Checkpoint® will be positioned as the

simple, efficient, and reliable solution for the treatment and prevention of varroa mite

infestations. CheckPoint® is the only system for varroa mite control that effectively

addresses the resistance problems plaguing the industry today. Checkpoint® consists

of a bolt-on housing unit installed on the front of each hive and designed to easily

receive the replaceable polymer panels infused with miticide. Both housing and panels will be sold in packages

of 10 units. Checkpoint® will be produced and packaged by Atlanta Plastic Injection Molding at a cost of $0.91

per panel and $1.38 per housing. Each polymer panel is manufactured with pathways designed to coat each

bee with miticide as they enter or exit the hive. The panel’s polymer matrix is infused with an annual rotating

formulation of miticide negating resistance issues. Treatment is renewed after each bee passes through the

opening. Due to the self-contained, polymer panel matrix design, use of Checkpoint® is less noxious to bees that

may already be in a weakened state and does not require chemical or pesticide licensing prior to sale or use by

beekeepers. Each polymer panel is used for 42 days, twice a year, effectively eliminating mite infestations.

Price

CheckPoint® will be provided wholesale to distributors in packages of 10 at a competitive price of $50 for housing

and $31.50 for replaceable panels. Using our value-based pricing strategy, we determined CheckPoint® will retail

at $65 for housing and $45 for replaceable panels.

Place

CheckPoint® will be available at independent distributors located throughout our

targeted geographic regions. In our three-year distribution rollout, SecureAg will target three regions that contain

the highest populations of beehives, using JB Hunt’s ICS brokerage service to deliver our packages. CheckPoint®

will be shipped in cardboard boxes on standard 48”x40” pallets that will hold 480 packages. In year one, our

efforts will focus in the Southeast which is closest to our longstanding manufacturing and distribution facilities. Our

rollout strategy will allow CheckPoint® to enter the market and gain commercial beekeeper attention before we

target our primary, and largest, market segment in the North Central in year two. In year three of our promotional

rollout, SecureAg will expand to the west coast region including: California, Oregon, and Washington.

Promotion

Our promotional strategy is focused on ensuring product awareness for our three geographic regions by directly

targeting commercial beekeepers and independent distributors. We will accomplish this through:

Sales Force: Our sales representatives will collaborate with independent distributors and commercial producers

throughout each respective region, maintaining relationships and receiving feedback on our product.

Test Trials: CheckPoint® has completed test trials with major commercial beekeepers in each of our three regions.

These trials occurred at the largest beekeeping operations in the country located in Florida, North Dakota, and

California. Results have been published in scientific journals, industry publications, and promotional materials.

Trade Shows & Bee Health Events: SecureAg will maintain a presence at annual

beekeeping and bee health conferences. Sales representatives will

promote CheckPoint® among major producers as the simple,

efficient, and reliable solution to varroa mites.

Direct Mailings: CheckPoint® trial data effectiveness, testimonies,

competitive comparisons, and environmental impact information

will all be included in print materials that will be mailed to

commercial beekeepers.

Magazines: SecureAg will target our customers through advertisement in two nationally-based

beekeeping magazines, as well as several regionally-based publications. The Bee Culture

magazine and the American Bee Journal are nationwide monthly publications

that are read by commerical beekeepers across the U.S.

Web Advertisements: Through our efforts, we will guide consumers to the

CheckPoint® homepage designed to provide educational resources and customer

support. The website will link users to articles, press releases, promotional literature,

and videos on the installation and benefits of CheckPoint®.

Social Media: SecureAg will use social media as an additional

source of advertising to reach our tech-savvy customers.

Primary outlets will include: Facebook, Twitter, Youtube,

Instagram, and Pinterest, allowing us to share treatment calendars,

promotions, and educational videos to a wider consumer base.

Year 1 Year 2 Year 3

SALES

Housing Sold $ 135,000 $ 1,145,400 $ 1,799,100

Panels Sold $ 170,100 $ 1,613,304 $ 3,880,170

Total Sales $ 305,100 $ 2,758,704 $ 5,679,270

COGS

Housing $ 74,520 $ 632,261 $ 993,103

Panels $ 67,500 $ 640,200 $ 1,539,750

Operating Costs

Distribution/

Packaging $ 2,835 $ 28,706 $ 65,459

Monitoring/

Measuring $ 27,000 $ 57,270 $ 53,973

Test Trials $ 10,126 $ 10,126 $ 10,126

Total COGS $ 171,855 $ 1,358,437 $ 2,652,285

Gross Profit $ 133,245 $ 1,400,267 $ 3,026,985

Marketing Expenses

Website/Design $ 23,000 $ 17,000 $ 17,000

Tradeshows $ 30,000 $ 30,000 $ 30,000

Display Booth/

Materials $ 20,000 $ 10,000 $ 10,000

Magazine Ads $ 24,000 $ 24,000 $ 24,000

Print Material $ 70,000 $ 125,000 $ 150,000

Direct Mailing $ 15,000 $ 20,000 $ 25,000

Promotional Materials $ 35,000 $ 80,000 $ 95,000

Sales Force $ 120,000 $ 240,000 $ 360,000

Total Marketing

Expenses $ 337,000 $ 546,000 $ 711,000

Net Profit $ (203,755) $ 854,267 $ 2,315,985

Profit Margin -67% 31% 41%

Return on Marketing -60% 156% 326%

CheckPoint® will provide the relief beekeepers

have been demanding for a simple, efficient, and

reliable solution to the varroa mite problem. Our

product will decrease the rapid loss of bee

colonies and support continued productivity of

agricultural operations across the U.S.

With beehive populations reaching all-time lows,

CheckPoint® will offer commercial beekeepers an

effective solution to stabilize their declining bee

populations and

also generate

additional profit

lines for SecureAg.