Honey-conomics

What’s the big deal with raw honey anyway? Is it really that different from store bought honey, other than the seemingly exorbitant price? Wouldn’t less processing make it cheaper? We get a lot of questions about the honey that we use and if it actually makes our mead taste different. In our last blog post, we discussed some of the unique aspects of our raw honey and how varietal or regional honeys influence mead. Suffice to say, we think raw honey makes for really good mead.

But if this type of honey is so great, why don’t more meadmakers use it? It comes down to supply and demand in our consumer-driven markets, something that we hope to improve through a little bit of education and a whole lot of really delicious mead. Meadiocrity isn’t just a business to us -- we hope it’s the start of a fundamental change in the honey industry. No small dreams here!

But before we can get there, we must take a quick detour back to beekeeping. If you remember back in our beekeeping practices blog post, beekeepers actually don’t make the majority of their money from selling honey, which may come as a surprise. The real money comes from bringing bees en masse to groves or orchards of specialty crops (like almonds in California’s Central Valley) that rely on bees for pollination.

In many cases, these farms are thousands of acres in size and grow only a single crop. This monocrop style of production needs honeybees because native bees and other pollinators don’t usually live in these environments. Did you know that honeybees aren’t even native to the United States?

Almonds are a specialty crop of California that are solely dependent on pollination by honeybees.

Almonds are a specialty crop of California that are solely dependent on pollination by honeybees.

Some beekeepers will move their bees multiple times throughout the year and across the country from crop to crop, pollinating monocropped fields. Other beekeepers get the bulk of their income for the entire year from only a single pollination service! For the rest of the year, beekeepers keep their hives near other nectar sources to help them survive and grow until the next round of paid pollination.

In such a business model, beekeepers often end up with a glut of honey as a side effect of pollination. One option would be to jar it and sell it at farmer’s markets, but a beekeeper with even a modest number of hives can end up with thousands of pounds of honey. So, many beekeepers instead set up contracts with large-scale honey aggregators. Selling honey in this way is beneficial for beekeepers because they can get cash at once and don’t need to sell the honey piecemeal. The downside is that aggregators usually purchase the honey at rock bottom rates, which perpetuates the beekeepers’ reliance on paid pollination, rather than honey sales, as their source of income.

We American consumers also help to drive this honey production process, as we’ve become accustomed to flawlessly clear, liquid honey that tastes the same no matter where we get it. Raw honey does not meet these expectations, so honey aggregators typically pasteurize and filter it, as well as blending honey from numerous sources to reach certain standards of flavor, color, and sugar content. Hence, the majority of honey on the market is not raw, but processed and blended. Combine that with the fact that Americans are consuming more honey than ever, and, as in Economics 101, supply and demand determine the price.

This is the perfectly clear, uncrystallized, golden honey we’ve come to expect from the grocery store, produced by bulk aggregators.

This is the perfectly clear, uncrystallized, golden honey we’ve come to expect from the grocery store, produced by bulk aggregators.

For meadmakers, the cost of honey is a substantial problem. Honey is the most expensive fermentable sugar by comparison to grapes and grain, so mead inherently has a disadvantage in the marketplace. Just for reference, the average cost for the raw grape juice to make one bottle of chardonnay was about $1.10 according to the 2015 Crush Report. The same honey cost for a comparable bottle of mead would start at about $1.70 per bottle for inexpensive bulk honey and could easily push over $3 for more exquisite honey. That’s just raw material cost. And even a small-scale meadery goes through thousands of pounds of honey every year, so finding a reliable source is very difficult. Working with bulk honey distributors has been the only viable option for many meaderies.

As we looked at the mead marketplace while getting Meadiocrity started, we knew that working with an aggregator was an option. However, the mead industry has an exciting opportunity to actively shift how the market for honey looks. Instead of honey being an afterthought, honey could become a priority for beekeepers -- if there is enough demand from meaderies and the price per pound made it worth their while.

Meaderies have the chance to buy honey in bulk directly from local beekeepers to obtain higher quality honey while providing more incentive for beekeepers to prioritize honey-making activities for their bees.

Meaderies have the chance to buy honey in bulk directly from local beekeepers to obtain higher quality honey while providing more incentive for beekeepers to prioritize honey-making activities for their bees.

We decided to start taking action by getting directly into the middle of the supply chain. We began to build our own estate hive collection and we formed partnerships with local beekeepers to directly buy their raw, unfiltered honey in bulk at a rate higher than they normally would make selling to a distributor. We get exquisite honey and the beekeepers get a better quality of life. Win-win.

We hope Meadiocrity can be a model for other starting meaderies and demonstrate that working with distributors isn’t the only viable option. As this type of model expands with the growing mead industry, we hope the side effect will be beekeepers producing high quality honey that they can sell directly to local meaderies. Better for the bees, beekeepers, environment, economy, and meaderies -- and ultimately higher quality mead for you!