Honey in the United States
Global demand for honey constantly exceeds supply, and this dilemma has only been exacerbated in recent years. The international honey market has gone into crisis mode as severe droughts persist and the bee populations continue to dwindle. As honey becomes harder and harder to find, the prices have been pushed up, reaching a record high in recent years.
The U.S. imports most of its honey from Argentina and Brazil. Productivity in both Argentina and Brazil has decreased due to climate change, currency fluctuation, and instability. U.S. domestic production has also suffered due to harsh weather conditions as California, the major source of domestic honey, faced its driest year in 2013. Vietnamese and Indian honey have increased in popularity due to their uncommonly low prices, despite their poorer quality. This leaves Chilean honey in a unique position to take over the rapidly expanding demand for higher quality (and higher priced) honey.
Honey can be split up into two separate and distinct types: table honey for consumption and bulk honey used in the manufacturing of other foods. Both are essential components of the U.S. market. Traditionally, 60-80% of U.S. domestic honey has gone toward the food manufacturing sector, while imported honey is used mainly for table consumption. The demand for bulk honey is more related to the demand for processed foods, and is less flexible in terms of price and honey type because consumers do not have a say in which kind of honey is getting added to their cereals and foodstuffs. Conversely, the demand for table honey fluctuates greatly and has been increasingly steadily over recent years.
Increasing U.S. demand for honey, particularly organic table honey, can be largely attributed to increasing trends in healthy eating and the importance of buying organic products. Taste and price consistently rank as the top two factors that impact consumer choice, but “healthfulness” has almost entirely closed the gap with price. According to a study conducted by the National Honey Board, there was an increase from 16 percent of consumers in 2012 to 31 percent by 2014 who cite that honey is an important product due to its health benefits. They also concluded that by 2013 70 percent of honey consumers reported that high-quality and purity are the most important factors they consider when purchasing honey. As consumers become more health-conscious, they support and increase industry demand.
Another important consideration in the demand equation is that consumers care about their honey’s country of origin, which they see as contributing to its purity. With the backlash against Chinese, Thai, and other Asian honey products in the last few years, the U.S. market has all but converted to Latin American honey suppliers. Consumers like to see their honeys labeled as being from Argentina and Brazil, but as those become more difficult and more expensive to purchase, Chile is becoming a perfect contender. The U.S. market will be more open to trade agreements with Chile due to the relative stability of Chilean currency over that of their traditional partners. Currently, only a fraction of U.S. honey imports come from Chile- about 40 metric tons in 2014- and this number can be considerably increased.
The Washington, D.C. metro area is the perfect market for foreign honey. To begin with, table honey consumption responds to income growth and relative price changes. As per capita income increases, so does the consumption of high-quality table honey. This makes the Washington D.C. area even more ideally suited for marketing because it has such a high income per capita – almost double the average U.S. income per capita. Additionally, health consciousness is of particular concern to D.C. consumers. The area is home to a staggering number of health conscious millennials who can afford to keep up with a trendy and healthy lifestyle that prioritized organic honey as an all-natural sweetener and dietary staple.
As a demand for high-quality table honey continues to increase, but foreign exporters continue to fall short due to the external factors affecting the honey production industry, the U.S. will be searching for alternative sources. Chilean honey can take advantage of the positive connotation and take over the gap in the market left by the declining production in Brazil and Argentina. These factors, along with an inherent increase in consumer demand for health conscious products like quality table honey, highlight an important opportunity in the current U.S. market.