Marketing Strategy Analysis: Capilano Honey Limited

Only available on StudyMode
  • Download(s) : 137
  • Published : April 24, 2008
Open Document
Text Preview

The sweet and savory spreads market in the last decade has undergone phenomenal changes due to varying economic, environmental and social conditions. Honey in particular, has been one spread that has gone through both prosperous and rough patches. Honey manufacturers and packers have used technological innovation to create a new market niche while strengthening their traditional markets with solid marketing schemes and planning. This report is going to be focusing on the honey market and exporting/importing of honey. The various marketing opportunities associated be examined and an appropriate assessment will be given on the future of honey markets and whether any of the options analyzed have any viability. Capilano Honey Limited is used as the focal point for examining, analyzing and discussing the honey market in Australia and internationally. Why Capilano Ltd.? Capilano is one of Australia’s oldest and most well-renowned companies whose singular focus is on honey and all products related to honey. It is a popular and dominant brand in the domestic market and with successful expansion to foreign markets is now considered one of the top global honey brands in the world. Add to that that they are the fourth largest honey processors and packers in the world. Capilano honey is sold both in consumer and business markets making it a perfect candidate through which to examine and analyze the honey market domestically and internationally.

The Domestic Consumer Market:
The consumer market is where goods are bought by purchasers and household members for consumption and not for making a profit. The consumer market is primarily a B2C market (Pride. Et al, pg: 209-10). Capilano honey is sold for consumption through retail outlets and supermarkets although a good deal of Capilano honey is also sold in bulk to other businesses (which is known as a Business-to-Business market). Capilano competes mainly with Beechworth, Leabrooks and Westcobee in the domestic consumer market for honey. These four companies are the primary packers and marketers of honey. There are also a large number of small honey producers that sell directly to consumers along with the generic cheaper brands sold by Australian supermarket giants Coles and Woolworths.

The chart below shows the market share for each company in the year 2004:
As we can see Capilano had a huge share of the market for marketers and packers in 2004. This share of the market (for Capilano) increased to 53% in 2007. Capilano also owned 70% of all honey sales during that period through their various branded products and also through the supply of honey to generic labels. Capilanos primary distribution channel for branded products is through Coles and Woolworths (Review of Operations 2006, pg: 10-14)

The value of honey on the domestic market is determined by activity in the spreads market. The market for spreads in Australia increased from 2001-2006, growing at an average annual rate of 2.7%. The total value of the spreads market has been growing for the past decade. Between 1994 and 2000 there was a steady increase in the amount (A$) being spent on spreads as shown in figure 1 on the next page. As we can see, since 2000 the market has been relatively volatile, shifting between $310 - $330. In 2007 the market for spreads increased to $437 million. The leading company in the market in 2006 was Kraft Foods, Inc. The second-largest was Ferrero with Capilano in third place (

Although the total value of spreads has been increasing the past few years, the total consumption has not seen a great growth (only about 3% between 1994 and 2004). The increase in consumption of chocolate/nuts, peanut butter & vegemite was offset by the decline in consumption of honey and jam (Figure 2). (Submission on…Australian bee Industry, pg: 67-75)

Figure 1:

Figure 2:

Although there was a decline in the consumption of honey (particularly between 2003 &...
tracking img