The University of Georgia
Center for Agribusiness and Economic Development
College of Agricultural and Environmental Sciences
Blueberry Value-Added Market Analysis
Kent Wolfe, Christopher Ferland, and John McKissick
FR-02-10
September 2002
Purpose
Blueberry producers in Brantley county and the surrounding areas have been delivering
harvested berries to Alma. This ride is expensive and an inefficient use of time. The producers
wish to investigate the cost of constructing and operating their own blueberry packing shed in the
area. In addition, they want to investigate the potential market for value added blueberries
products. Value added products will allow the producers to utilize lower quality berries and
increase the returns per acre.
Introduction
Consumers are becoming more adventuresome and trying flavorful, fresh, ethnic, and
regional foods. In addition, consumer’s consumption of gourmet foods is increasing, providing
an ideal situation for the introduction of a unique specialty food product. The increase in
gourmet/specialty food consumption is reflected in sales which have increased from $15.3 billion
in 1995 to $20 billion in 2002. Sales of gourmet/specialty foods are expected to grow at an
annual rate of 6.7%, reaching $27.6 billion in 2005.
Table 1. U.S. Gourmet/Specialty Food Retail Sales (millions of dollars)
Sales
Market
1996
Sales
2000
CAGR
1996-2000
2005
CAGR
2000-2005
CAGR
1996-2005
Coffee/tea
$2,750
$4,250
11.5%
$6,708
9.6%
10.4%
Confectionary Deserts
$3,141
$4,000
6.2%
$5,365
6.0%
6.1%
Condim ents 1
$1,949
$2,554
7.0%
$3,582
7.0%
7.0%
Cheese
$2,000
$2,350
4.1%
$2,860
4.0%
4.0%
Pasta/grains
$676
$810
4.6%
$1,032
5.0%
4.8%
Other Foods
$4,742
$6,036
6.5%
$8,076
6.0%
6.1%
$15,258
$20,000
7.0%
$27,623
6.7%
6.8%
Total
1
Includes jams, jellies, and similar products
CAGR = compound annual growth rate
Source: National Association for the Specialty Food Trade
The Specialty Food Buyer Profile
Before investigating the specialty food buyer, it is important to understand what
constitutes a “specialty food” product. There is no clear definition for specialty foods. For
example, a product that is considered a specialty food in the early 1990's may not be a specialty
food in 1999. As the popularity of the specialty food product increases, competing
manufacturers start producing and mass-marketing similar products. As a result, the once
2
specialty food, over time, has been transformed from a specialty food to a mainstream grocery
item. However, specialty foods can be loosely defined as value added, premium priced food
products that provide an added appeal for one or more of the following reasons:
•
•
•
•
•
Quality of ingredients, manufacturing process and/or finished product
Sensory appeal, flavor, consistency, texture, aroma, and appearance
Presentation (branding or packaging)
Origin (where the product was manufactured)
Distribution channel (specialty food retail outlets or sections within supermarkets/grocery
stores)
The National Association for the Specialty Food Trade (NASFT) recently conducted
extensive demographic research to create a profile of the specialty food consumer. This
information is very useful to any business that sells to specialty food consumers. According to
the NASFT’s 1998 “Today’s Specialty Food Consumer” research, the specialty food consumer
can be generally described as:
•
•
•
•
•
•
Residing in a two person household
Affluent ($100,000 + household income)
Older consumers (45 years of age or older)
College graduate
Resides in large metropolitan areas
Resides in New England, Mountain or Pacific regions of the United States
Table 2 present a summary of the NASFT study. The Speciality Buyers Index is the ratio
of percent of buyers to the percentage of population in a specific
.
3
Table 2. Specialty Food Consumer Demographics
National
Percentage
Specialty
Buyers Percentage
Specialty Buyers
Index
Number of persons
1
24.6%
17.2%
70
2
31.7%
37.2%
117
3
17.5%
18.8%
108
4
15.0%
15.6%
104
5+
11.1%
11.3%
102
Household Income
<$10,000
11.3%
6.5%
57
$10,000-$19,999
14.7%
9.8%
67
$20,000-$29,999
14.1%
11.3%
80
$30,000-$39,999
12.9%
11.6%
89
$40,000-$49,999
11.1%
11.3%
102
$50,000-$74,999
18.8%
22.7%
121
$75,000-$99,999
8.6%
12.4%
144
$100,000+
7.9%
14.7%
185
Household Age
18-24
5.2%
3.7%
72
25-34
19.2%
16.2%
85
35-44
23.1%
22.4%
97
45-54
18.2%
19.9%
109
55-64
12.4%
14.1%
114
65 +
22.0%
23.9%
109
Race
White
78.6%
79.3%
101
Black
10.8%
8.6%
80
Hispanic
7.5%
8.2%
109
Other
3.2%
3.5%
109
Age and Presence of Children
Children < 6 yrs. old
9.5%
10.0%
105
Children 6 - 17 yrs. old
18.5%
17.5%
95
Children < 6 and 6 - 17 yrs. old
7.5%
7.3%
97
No Children
64.1%
65.4%
102
Housing Tenure
Own Housing
64.8%
72.5%
112
Rent Housing
35.3%
27.4%
78
Householder Education
Grade School
10.8%
8.2%
76
Some High School
14.4%
10.5%
73
High school graduate
28.2%
23.5%
83
Some college
25.8%
26.6%
103
College graduate
20.9%
31.7%
151
Nielsen County Size
21 largest metropolitan areas
39.6%
46.2%
117
Metro areas with more than 85,000 households
30.4%
29.5%
97
Counties with 20,000 to 50,000 households
15.4%
12.4%
79
All other counties
14.4%
11.8%
82
Census Division
New England
5.2%
7.1%
137
Middle Atlantic
14.4%
16.8%
115
South Atlantic
18.5%
17.5%
95
East South Central
6.3%
2.0%
47
West South Central
10.8%
9.5%
89
East North Central
16.5%
11.1%
67
West North Central
7.1%
4.6%
66
Mountain
6.1%
7.5%
123
Pacific
15.3%
23.1%
151
1
The index shows the likelihood of each demographic segment to purchase specialty foods with 100 being average.
4
Target Market Summary
Income appears to be the driving factor in specialty food purchases as indicated by the
fact that households earning more than $100,000 are significantly more likely (85%) to purchase
specialty foods than less affluent households. Specialty food shoppers are more educated than
the general population with 32% having a college degree. This is significant in that college
educated consumers are 51% more likely to purchase specialty foods than non-college educated
consumers. Consumers’ geographic location significantly impacts consumers’ likelihood of
purchasing gourmet/specialty foods. Gourmet/specialty food consumers are more likely to reside
in New England or the Pacific regions. Household size also influences specialty food purchases.
Two-person households are more likely to purchase than people who live alone or in larger
households. However, household size, age, and even the presence of children are not as
significant characteristics of specialty food shopper as are income, education, and region of
residence (The National Association for the Specialty Foods Trade, 1999).
Profile:
•
•
•
•
•
•
Households earning more than $100,000
College education
Two people households
Children under 6 years of age and those households with no children
People between 55 and 64 years of age
Residents in New England and the Pacific
For instance, specialty food shoppers are 33% more likely to watch the Food Channel on
cable TV and 19% more likely to read the Sunday paper than the nation as a whole. Specialty
food shoppers enjoy traveling which may explain their desire for gourmet and specialty foods.
Consumption Trends
The traditional gourmet market is re-emerging as mainstream food retailers have flooded
the market with imitation “gourmet” products. However, there appears to be a backlash as the
quality and price of these mass-produced gourmet products have diminished. Gourmet products
are expected to return to their roots: unique, upscale, and expensive. The food industry
anticipated that gourmet products will re-acquire the price and quality levels they once held. In
addition, specialty food stores will actively promote the exclusiveness of their products, and
consumers will treat themselves with these small indulgences.
Specialty Food
Strengths: Existing specialty/gourmet producers have established market outlets and typically,
a diverse product mix (various preserve flavors, hot sauces, or other specialty food items). The
diverse product mix allows them access to a greater pool of potential consumers and market
5
outlets. A review of the specialty food vendors revealed that the vast majority of the businesses
offer a variety of products.
Weaknesses: Specialty/gourmet producers face a major obstacle in marketing their product.
The specialty food segment may be characterized as unorganized. This segment has no distinct
market outlets or distribution channels by which large volumes of product may be sold
consistently, other than specialty food shows. According to articles written on specialty food
marketing and conversations with existing producers, the success of their business is based on
obtaining numerous market outlets. For example, specialty food stores, distributors, festivals,
trade shows, shop-at-home television outlets (such as QVC), and word-of-mouth are important.
This business involves meeting with individual specialty store owners/managers and selling them
on the idea of adding your product to their shelves. Another weakness of the specialty/gourmet
segment is a lack of capital to expand the business in the event an opportunity arises that would
require a consistently large supply of product.
Packaging
According to Mr. Larry Davenport, with the International Jam & Preserve Association,
product presentation is 90% of selling. A package’s presentation should be considered a
marketing tool to attract potential customers to a product before they even consider making a
purchase. Consumers have a variety of products from which to choose. A product’s name and
package are two methods of conveying its image to potential customers. Thus, it is essential that
a product’s packaging and name create an image that causes it to stand out from other products.
Mr. Davenport offers the following packaging advice, “ Have a beautiful product.” By beautiful
product, he means that the whole package, container, label, and display, must be attractive.
Market Outlet Segmentation
The specialty food market can be categorized into a number of distinct markets. The
following outlines and describes some of the potential markets for selling specialty foods.
Retail Sales: The retail sales category excludes products sold through restaurants and
institutions that alter the product in some way. It also does not include those portions of a
commodity that are used commercially as an ingredient in another product. The retail market for
specialty foods can be segmented further into two distinct markets. The first is supermarkets and
grocery stores and the second is gourmet/specialty food market. The supermarket and grocery
store category only account for supermarket and grocery store sales. The gourmet/specialty food
market consists of several smaller niche markets and includes specialty food stores (e.g., delis,
bakeries, fruit, and vegetable markets), drug stores, mass retailers and club stores.
C
Supermarket and grocery store segment - account for 86% of retail sales.
Eighty-six percent (86%) of the jam, jelly, and preserve retail sales are generated in
supermarkets and grocery stores. The jam, jelly, and preserve market is dominated by
seven companies which account for more than two-thirds (69%) of retail sales.
6
Smucker’s had the largest share of the market with 31% of the retail sales in 1993.
(Source: Find/SVP and Supermarket Business, September 1997, Volume 52/Number 9
Part one)
C
Gourmet/Specialty Food Market - This very diverse market can be viewed almost as a
default market in that it includes all of the retail markets that are excluded from the
supermarket and grocery store markets. The jams, jelly, and preserves gourmet/specialty
food market is of considerable size, as it represents 14% of total U.S. retail sales or
approximately $125 million. (Source: Find/SVP and Supermarket Business, September
1997, Volume 52/Number 9, Part one)
Gourmet/Specialty Food Market Potential: The following estimates blueberry preserve
market potential via the gourmet/specialty food market:
$125
x .61
$ 76.25
M illion dollar market - total U.S. preserves, jelly and jam including all flavors
$ 76
x .24
$ 18.24
M illion dollar U.S. preserves and jams market
(Preserve and jam market share)
M illion dollar market for U.S. preserves and jams
(Blueberry preserve and jam share of total preserve and jam market )
M illion dollar market for blueberry preserves and jams
The potential market for blueberry preserves and jams in the gourmet/speciality food market is an
estimated $18.24 million annually. This is expected to increase by approximately 2.0% annually.
$18.24
÷ 5.00
$ 3.65
M illion dollar market for blueberry preserves and jams
(estimated price
per 8-ounce specialty jar)
Estimated market potential in million 8-ounce jars of blueberry
preserves and jams
The gourmet/specialty blueberry preserve and jam market in the United States is estimated at
3.65 million 8-ounce jars annually. This can be broken down further to estimate Georgia’s share
of this market.
$ 3.65
÷ 50
73,000
M illion 8-ounce jars of blueberry preserves and jams
States in the union
8-ounce jars of blueberry preserves and jams
It is estimated that Georgia’s blueberry preserve market via gourmet speciality retail outlets is
approximately 73,000 8-ounce jars per year. This estimate is based on a series of crude
extrapolations presented above. This evidence alone urges consideration of market promotion
outside the state’s border.
7
Based on interviews with regional producers of jams, jelly, and preserves and one area
retail outlet, it appears reasonable for a producer to estimate sales somewhere between two and
24 cases of blueberry preserves annually per retail outlet. The specialty stores in Georgia are
mainly located in high traffic tourist areas, mountains, coastal cities, or the Buckhead shopping
district, to name a few. The producers and retail store people indicated that the majority of their
product being sold in these areas are tourists. These products are marketed to capture the
“Georgia or local” image.
Retailing via specialty stores requires “beating the bushes.” To sell in these types of
stores, it will take meeting with store owners or managers. These stores may require you to sell
products on consignment at first, which may lead to them actually purchasing the product and
reselling. Typically, the producer is responsible for setting up the display, monitoring the
display’s turnover, restocking and removing any product that has been damaged or suffered the
elements of time (i.e., the label has faded because it was exposed to sunlight). The specialty
retail industry is very loosely defined and a complete list of specialty retail stores is currently not
available. Even large companies, such as Dunn & Bradstreet, indicated that they do not have
access to a list of specialty retail stores as there are multiple types of specialty stores and,
therefore cannot be categorized under one heading, i.e. there are multiple SIC (Standard
Industrial Classification Code) codes for these types of retail outlets and they cannot be rolled
into one single category.
Conclusions
The gourmet/specialty food market is a growth segment reaching an estimated $20 billion
in 2002. The above analysis is based on categorical information collected from a limited variety
of sources. However, based on the gourmet/specialty food market analysis, it is reasonable for a
producer to estimate sales of 12-18 cases annually per retail outlet, given the product is priced
competitively. The specialty retail outlet is very labor-intensive, especially in the smaller outlets
that sell a variety of items including food (tourist retail outlets in Helen, Savannah, and Stone
Mountain etc., to name a few). If the business can sell 15 cases annually through 50 specialty
stores, it could move 9,000 jars of blueberry preserves.
Gift Baskets/Gifts
The gift basket industry has established itself as a niche industry since emerging in the
1980s as a novel trend. According to Entrepreneur Magazine, the gift basket industry’s annual
gross sales reached $2.8 billion in 2001.
Trends
The Gift Basket Review recently conducted a survey to analyze the industry and found
that the it consists of numerous producers with a significant percentage being run as home-based
businesses. The gift basket industry appears to be growing, as only 15% of survey respondents
reported a decline in business from 1996 to 1997. The gift basket industry is very seasonal, with
8
43% of total sales being generated between Christmas and January 1. The following table
provides an outline of the next largest business opportunities by holiday and occasion.
Table 3. Gift Basket Best Selling Holidays and Occasions
Holiday
% Mention
Occasion
% Mention
Christmas/end of year holiday
43
Birthdays
47
Valentine’s Day
26
Thank you
14
Mother’s Day
8
New baby
9
Secretary’s Day
6
Funeral/sympathy
7
Thanksgiving
5
Wedding
5
Easter
5
Get well
5
Jewish holidays
1
Special events
2
Other/don’t know
6
Other
14
Source: Gift Basket Review
Gift Basket Market Statistics:
C
C
C
C
C
C
C
Corporate business purchases account for 37% of the respondent’s gift basket sales,
regardless of the season.
Most gift basket sales were to local consumers (67%), while 13% of sales were to
national accounts, 10% were regional accounts, and 5% were statewide.
The gift basket producers spent an average of $58,000 on inventory in 1997.
Approximately 60% of all gift baskets contain food items, with the number one item
being sweets.
Gift baskets targeted at males are more likely to contain salty and crunchy snacks, which
would include among other items nuts, crackers, meats, and cheese.
The average selling price of a gift basket was $46 in 1997, up from $39 in 1996.
The companies interviewed reported gift basket sales ranging from $50,000 to more than
$200,000 annually.
Break down of gift basket companies by gross revenue.
$50,000 - $100,000
$100,000 to $200,000
$200,000 +
– 49% of Gift Basket producers
– 23% of Gift Basket producers
– 27% of Gift Basket producers
9
Table 4. Average Number of Gift Baskets Produced Annually by Company Size
Containing Food Items
Gross Revenue
Av. $/Basket
Av. # of Gift Baskets
% With
Food*
Gross Revenue
÷ Av. $/Basket
# Baskets w/ Food
Av. # of Gift
Baskets
x % With Food
$75,000
$46
1,630
60%
978
$150,000
$46
3,261
60%
1,956
$250,000+
$46
5,435
60%
3,260
Total
6,195
* Approximately 60% of all gift baskets contain food items
Using Select Phone software, the CAED was able to identify 383 gift basket companies
located in Georgia. The following information provides an estimate of the number of gift baskets
sold annually by Georgia gift basket companies. The information assumes the average gift
basket sells for $46 and that the gift basket companies’ revenue breakdown is identical to that
found in the Gift Basket Review industry survey study. The number of baskets sold annually
reflects the number that contain food products (60% of the total contain food products).
Table 5. Average Number of Georgia Produced Gift Baskets Sold Annually by Company Size
Percent of Gift
Basket Producers
Average Number of Gift
Baskets Containing
Food
Number of
Georgia
Companies
Number of
Baskets Sold
Annually
$75,000
49%
978
190
185,820
$150,000
23%
1,956
89
174,084
$250,000+
27%
3,261
104
339,144
TOTAL
383
699,048
Gross
Revenue
The information on total baskets produced is very crude and based on a number of
secondary data sources. However, it is the only information currently available and thus provides
an estimate.
10
Conclusions
The gift basket industry is currently a growth industry. There are no exact figures on
specific food product sales for the gift basket industry, nor are there any figures on the food
product composition of gift basket (i.e., what percent have preserves). However, the number of
gift basket sales does provide an indication of this industry’s potential in regard to specialty
foods. Estimates predict potential sales of blueberry preserves through Georgia gift basket
companies, assuming a 5% market share with each basket containing one jar of blueberry
preserves, to be 34,952 jars of preserves.
Home Shopping Outlets
The shopping-at-home industry is also experiencing growth, as revenues were expected to
increase 12% from 1995 ($60 billion) to 2000 - ($68 billion). The home shopping industry can
be broken down into three major categories: mail order/catalogs, cable television, and the
Internet. This is further explained in the following table.
Table 6. Home Shopping Revenues by Segment1
Home Shopping
Segmentation
% of 1995 Home Shopping
Revenues
% of 2000 Home Shopping
Revenues (Estimated)
Catalog
95%
80%
Cable
5%
5%
Online
0.5%
15%
1
Source: Forrester Research, Inc.
Online Outlets (this includes individual, web pages, and virtual shopping malls/stores):
The online shopping industry continues to grow as Internet access and usage increases. It is
estimated that the number of internet users increased 29% from 2001 to 2002. There are an
estimated 119 million U.S. consumers online, or roughly 44% of the U.S. population (Source:
comScore Media Metrix1). It is estimated that 10% of Americans bought products online.
As a result of the Internet’s increased popularity, online shopping revenues increased to
$53.1 billion in 2001, up from $300 million in 1995. This provides a rapidly expanding market
for companies offering online products or services. The Internet user profile is that of a white
male, in his early to mid 30's, making $55,000 or more annually.
The following table presents Internet user demographic profiles from three survey
sources, with a comparison to U.S. Census Statistical Abstract figures.
1
http://cyberatlas.internet.com/markets/advertising/article/0,,5941_1448151,00.html
11
Table 7. Internet User Demographic Profile (Survey Results)
Demographics
Online
Population
US Population
28%
23%
23%
24%
5%
22%
22%
20%
18%
16%
Annual Average Household Income < $50,000
46%
32%
Gender - % Female
51%
52%
Education Attainment- College degree
32%
22%
Race - % white
76%
76%
Age
18-29
30-39
40-49
50-64
65+
Source: Harris Interactive
Online Shopping Behavior 2
When questioned about their online purchase behavior, respondents revealed:
•
Frequency of purchases online: More than two-thirds (69%) of those participating in the
survey reported having placed an order online in the past. A majority (63%) shop online
at least once a month, and 27% shop online at least once a week.
•
Who has purchased online: Nearly three-quarters (74%) of the male respondents have
ordered something online, with 59% of females reporting the same.
•
Average online spending: Online purchasers spent on average $446 on the Net in the past
12 months, with 16% having purchased products and services for over $1,000. The
average amount spent on the most recent purchase is $157.
•
Price range comfort level on the Net: The average price limit at which respondents would
be uncomfortable purchasing an item on the Web is $1,500.
2
Greenfield Online, http://www.pittsburgh.bbb.org/information.asp?ID=30&IDDoc=48
12
•
Products and services considered suitable for online shopping: computer software was
found to be the product people most likely would buy on the Web (77%). Other items
likely to be purchased online include: books (67%), CD (64%), computer hardware
(63%), airline tickets (61%), and magazine subscriptions (53%).
•
What consumers are NOT likely to buy on the Net: More than half (60%) reported that
they are unlikely to buy insurance on the Net. Other items unlikely to be purchased
online include: food/drinks (55%) and financial services (53%).
•
Reasons FOR placing orders online: Of those who have ordered online, 88% cited
convenience as their main reason for cybershopping. Other reasons for making an online
purchase include price (58%), access to items not available elsewhere (48%), selection
(42%) and no pressure from salespeople (38%).
•
Reasons for NOT buying online: The 31% who have never bought anything online are
mostly concerned about the security of payment (75% reported such a concern). Other
main barriers to purchase cited by non-purchasers include: payment structure (46%),
reliability of companies (36%), returning items (36%) and lack of privacy policy (33%).
13
Table 8. November/December 2001 NRF/Forrester Online Retail Index
Category
Airline Tickets
Computer hardware
Apparel
Other
Toys/Videogames
Consumer Electronics
Hotel Reservations
Books
Music
Videos
Software
Food/Beverages
Jewelry
Health and Beauty
Car Rental
Linens/Home Decor
Sporting Goods
Footwear
Office supplies
Tools and Hardware
Small appliances
Furniture
Flowers
Appliances
Garden Supplies
Total Spending
Number of Buyers
Av. Spent per Consumer
Dec. Total Spent
(in thousands)
$631,130
$512,920
$484,027
$480,361
$474,676
$412,745
$311,119
$280,229
$233,058
$191,983
$185,440
$174,477
$171,992
$152,913
$135,039
$134,732
$124,286
$115,899
$105,439
$101,357
$79,053
$68,216
$65,493
$35,904
$22,408
$5,684,895
18,693
$304.12
Nov. Total Spent
(in thousands)
$690,635
$388,402
$405,439
$513,884
$306,298
$316,731
$339,609
$192,183
$177,935
$135,211
$165,020
$153,837
$116,796
$116,064
$135,276
$106,548
$94,742
$100,055
$131,110
$52,220
$70,494
$70,919
$74,805
$55,664
$21,336
$4,931,215
16,814
$293.28
Source: NRF/Forrester
Additional Internet Research Information
The results of a small informal interview with five respondents who operate companies
that advertise and sell preserves and assorted products online (includes home page and virtual
shopping malls/stores) indicated that Internet sales represent less than 1% of their business’s
gross sales. The respondents had annual gross sales ranging from $25,000-$130,000. These
respondents answered questions in the context of the preserve industry. However, the gross
revenue reflects the company’s overall sales which would include a wide variety of products. All
of the companies interviewed offered multiple products as well as a variety of preserves flavors.
14
Although the five respondents represented a fraction of the current online preserve vendors, their
comments do provide insight into the online market for preserves.
Online Outlets - the following outlines blueberry preserve market potential via the online outlets
using the five in-depth telephone interviews:
$300 - $1,300
÷ $3.50
$ 85- 371
Online annual revenue generated from blueberry preserves
($ per 8 ounce jar)
Estimated annual online market potential for blueberry preserves
and jams , expressed in units
The potential market for blueberry preserves and jams through online outlets is an estimated
$300 - $1,300 annually, based on selling 85 to 371 units annually at $3.50 per 8-ounce unit.
Conclusion
Currently, online demand for blueberry preserves is very limited. As shopping online
becomes more popular and the number of Internet users grows, so should the potential for selling
blueberry preserves online. The online shopping outlet for food and beverage products is at the
“new product” stage in a product life cycle and will require time to mature into a viable outlet for
these products. However, the Internet is a way to convey product information to potential
consumers. One of the respondents in the in-depth interview indicated that his web page is very
useful in providing information to customers. Instead of generating brochures or providing
information about his product’s characteristics, history, and story, he can refer individuals to his
web site where all of this information is available and easily accessible.
Mail Order Catalog
There are a number of mail order catalog companies that sell specialty, gift, and gourmet
food products. The catalog business may offer significant potential in that one catalog may
expose the preserve products to millions of potential customers. A listing of speciality food, mail
order catalog companies is available in Appendix A. A description of the typical catalog shopper
is given below.
(Note: Several of the business listed in Appendix A were contacted and they were extremely
receptive to receiving new product samples.)
Catalog Shopper Profile3 :
C
C
C
C
110 million catalog shoppers, estimated at 159 million in 2001.
More than one-half of catalog shoppers are female, with working women representing the
prime catalog shopper segment.
Approximately one-half of all men shop from catalogs.
The core catalog shopping market is 25 - 44 years of age.
15
C
C
C
C
C
C
North Easterners are most likely to be catalog shoppers but in terms of aggregate
numbers, the southern U.S. is the largest catalog market.
Suburbanites make up the majority of catalog shoppers.
More than one-half of catalog shoppers earn $40,000+ annually. Affluent adults are more
likely to shop by catalog.
Two-thirds of frequent catalog gift buyers are women.
Catalog food shoppers are affluent, well-educated women.
Catalog food sales are approaching $1 billion.
The mail order catalog food share of the industry is approaching $1 billion.
Conclusion
The mail order catalog industry offers tremendous potential. The demographic profile of
mail order catalog shoppers fits with the demographic profile of jam, jelly, and preserve
shoppers. Based on the market potential, the catalog shopper and preserve consumer
demographic profile match. It would be worthwhile to pursue an established specialty food
catalog for product distribution.
Capturing Consumer Data
As you fill orders for consumers, it is necessary to collect basic information. To ship the
product, you will need the consumer’s name, address, state, city, ZIP code, and telephone
number. By collecting and saving customer information, you can gradually build a database of
current consumers. You can then use this database to generate future sales by periodically
reminding consumers about your products or sending them information describing new products.
Another benefit of capturing and saving customer information is identifying potential
consumers. A customer profile can provide an accurate picture of your typical customer.
Customer profiling information can help identify areas where potential customers reside. There
is a theory that “birds of a feather, flock together.” Therefore, people residing in the same ZIP or
postal codes generally share similar demographics. By profiling customers via information
captured from shipping products, it is possible to estimate the profile of a particular ZIP code.
Once a ZIP code profile is created, it can be compared to existing ZIP code level information to
identify other areas where potential customers reside. You can obtain ZIP code level
demographic information from various local, state and federal government sources (i.e., Census
Bureau Statistics and/or the Georgia Economic Development Center). This information can be
used for finding retail outlets that are located in desired demographic areas, as well as focusing
on promotional and advertising activities.
16
Wholesalers
Wholesalers sell to retailers, other wholesalers and industrial users but do not sell directly
to the end user or consumer. Wholesalers can be considered another possible marketing outlet
for specialty products. Wholesalers can be segmented into agent wholesalers and merchant
wholesalers.
Agent wholesalers- Agents wholesalers function similar to a sales representative on
behalf of their clients. These agents are specialized and provide their services for a fee.
The functions of a agent wholesaler are to help locate:
@
@
@
@
@
alternative buyers
locations
prices
products
various retail outlets
Merchant wholesalers-Merchant wholesalers use their knowledge of the product and
industry to buy and sell products for their own gain. These agents will purchase a product
from a processor or supplier and re-sell it for a profit. They do not act as sales
representative on behalf of a processor client like agent wholesalers.
Distributors
Distributors are another marketing channel that can be used to sell products. The main
function of a distributor is to warehouse, deliver, take orders, and invoice products. It is very
important to understand that distributors are not responsible for selling products. There are
about 60 distributors who are involved with retail specialty foods in the United States. A typical
distributor is involved with various product lines and is usually regionalized. It is important to
know that specialty food distributors are continually being approached by individuals or
organizations with new products. Distributors are not necessarily interested in carrying new
products if they do not have a track record or data indicating that the product actually sells.
When approaching a distributor, it is helpful to have some historical sales data for your product
that indicates sales potential.
Brokers
The text book definition of a food broker is “an independent sales force who performs the
essential sales function and related services for a number of different principals.” The broker’s
responsibilities are more complex than described by the textbook definition and his or her
services are retained by a commission fee. The broker’s job is to please both the manufacturer as
17
well as the buyer. Brokers normally do not receive any money unless they are able to sell a
product. A food broker is responsible for:
@
@
@
@
@
@
@
@
@
@
Negotiating the best deal and promotion for the customer
Protecting the integrity of the product and organization he/she represents
Presenting a product line
Writing orders
Following up on orders to ensure the delivery of the product,
Ensuring the product is properly displayed
Ensuring that all product promotions and deals are applied to an order
Monitoring the sell through
Arranging for product demos or sampling
May be required to walk through a payment
Advertising, Promotion and Packaging
The purpose of advertising is to communicate product information to consumers.
Advertising uses a description or presentation of a product to persuade individuals to buy it.
However, in the case of blueberry preserves, the market outlets are scattered and not
concentrated, making advertising more difficult and less efficient. However, if advertising costs
could be shared with a complementary product, it would less expensive. For example, the
possibility of advertising cooperatively with a biscuit producer and sharing the cost of the
advertisements should be investigated.
"Promotion" can be defined as an advertising program, sweepstakes, contest, direct
giveaway, or solicitation directed to specific named individuals that includes the award of or
chance to be awarded a prize. “Promotion” is also defined as any special effort to increase sales
of a product. There are a number of ways to promote specialty food products. Before developing
a promotional or advertising campaign, prepare a list of product features and benefits to help plan
advertising and promotional campaigns.
After speaking to business owners involved with manufacturing and marketing specialty
foods, it was determined that a variety of promotional and marketing techniques need to be used
to build product sales. Some of the more common promotional or marketing techniques used by
these individuals and other small business individuals include:
C
C
C
C
C
Building and maintaining a customer mailing and contact list on database
software.
Building your image with a well-designed product label and promotional display.
Designing a brochure that best explains the benefits of your services.
Designing a point-of-purchase display for your product.
Designing and distributing a quarterly newsletter or an industry update
announcement.
18
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
Designing and distributing company calendars, mugs, pens, note pads or other
advertising specialties displaying your company name and logo.
Designing and distributing a free "how to" handout related to your industry (e.g.,
traditional and new uses for blueberry preserves).
Exploring cross promotion with a non-competing company selling to your target
market.
Exploring ways to share your advertising costs using cooperative advertising.
Following up customer purchases with a thank you letter.
Following up customer purchases with Christmas or birthday cards.
Having your company profiled in a magazine or newspaper that is read by
prospective customers (e.g. Gift Basket Review).
Holding a promotional contest.
Including promotional material with your invoices.
Looking for prospective customers at trade shows related to your industry (Fancy
Food Show, National Gourmet Food Show, Gift Basket trade shows).
Setting up a booth at trade shows related to your industry.
Looking for prospective customers at local, regional and national food festivals.
Looking for prospective customers in associations related to your industry
(Specialty Food Trade Shows like the National Association of Specialty Food
Trade).
Looking for prospective customers at seminars related to your industry.
Looking for prospective customers in magazines and newspapers related to your
industry.
Packaging your brochure, price lists and letter in a folder for your customers.
Placing promotional notes on your envelopes and mailing labels.
Providing free samples of your product or service whenever possible.
Providing public tours of your operation.
Donating your product to different fund-raising and charity events.
Sponsoring an amateur sports Little League team.
Sponsoring a cultural event through a community arts organization.
Trying to provide your product to high-profile restaurants in the area, even if you
have to provide your product free.
Providing local radio personalities with free samples to give away to their
listeners as a small token of their appreciation.
Blueberry packing Shed and Value Added Kitchen
This section investigates the costs of operating a blueberry packing shed capable of
handling one million pounds of blueberries per year. This economic analysis applies to full
annual operation; it does not serve as a cash-flow, or start-up cost analysis. The figures cover a
"normal" operating year including a "normal" sales year. The economic analysis is provided to
determine the true profit or loss potential of the proposed operation. Cash flow analysis is used
to determine the feasibility of any particular financing plan.
19
Equipment costs for the operation include all necessary components for sorting, grading,
packing, and cooling the blueberries prior to delivery. The size investigated was a single line
with a capacity large enough to service one million pounds preempting the blueberry expansion
in Southeast Georgia. Equipment cost were provided by the Brantley County Cooperative
Extension Service and the CAED. A small kitchen capable of producing jellies and jams was
also investigated, only the capital cost for this kitchen will be mentioned in this report.
Capital Cost
The capital cost figures include the necessary equipment for sorting, grading, packing and
cooling blueberries before they are picked up for delivery. The equipment totaled $70,104. The
land, building, concrete, and grading cost total are estimated at $223,750. The land cost are
minimal based on conversations with the major investor group and party interested in this
project.
Working capital is included in the capital costs, working capital changes with the levels
of production. Working capital are the resources used to support a business until that business
begins to generate its own support, generally in the form of profits. Most working capital comes
in the form of start-up, short-term loans. Working capital is essential in starting and operating
any new business. It is enough capital to cover expenses incurred by the business during the
startup phases and slow sales periods to remain in production. Working capital to cover three
months of operation with no income produced, including payment to producers and any debt
payment that may be incurred is assumed. Table 9 indicates the total capital cost needed for each
level of production.
Table 9. Capital Cost for Blueberry Packing Line
Building/Land
$223,750
Equipment
$70,104
Working Capital
$180,082
Kitchen
$65,000
Total
$477,936
Total with Kitchen
$542,936
Table 9 indicates the total capital needed be raises prior to operating. The kitchen cost
would be an extra $65,000 if the cooperative decides to build one, rasing the capital to $542,936.
Fixed Costs
Total fixed costs are expenditure which will not change with production levels. Stated
another way, it does not matter if 10 pallets or 1,00 pallets of blueberry are packed these cost
remain the same. Fixed costs are flat and consistent with the same costs occurring each period,
whereas other costs are related to the level of output. Included in fixed cost are interest,
depreciation, taxes and insurance and administrative costs. Economic depreciation is used to
20
cover physical deterioration and function obsolescence of equipment and/or regulations. The
annualized cost of the internal capital and return on investment is built into the economic
analysis. If helpful depreciation can be thought of as the annual average principal debt payment
occurring if a loan is structured for the entire capital costs for the anticipated useful life of the
facility. Return on invested capital can be thought of as the average annual interest payment for a
loan capitalized over the anticipated useful life of the facility. Fixed costs are equivalent for all
scenarios since each uses the same equipment. Annual fixed costs associated with the project
totaled $83,871.
Salaried employees are considered "fixed" for this analysis since their costs are not easily
changed with production levels. The manager receives $15,000 per year due to the limited
packing season, but will provide guidance year round for purchasing supplies and repairs for the
facility. To determine the cost per variety and differing flats, the cost were allocated on a time
usage basis. Assuming the larger facts during the later part of the season would use 66.7% of
the time, 66.7% of the cost were set aside for the rabbit eye. The same process was used to
determining the 33.3% allocation for the highbush blueberries.
Table 10. Fixed Cost for the Blueberry Packing Shed and Each Variety
Joint
Rabbiteye(Per flat)
66.7%
Highbush (Per Flat)
33.3%
Taxes and Insurance
$2,939
$.003
$.029
Manager
$15,000
$.002
$.035
Depreciation
$44,489
$.04
$1.03
Interest on Investment
$21,443
$.02
$.50
Total Fixed Cost
$83,871
$.10
$1.94
Cost Category
Table 10 reveals that the fixed cost per flat for the highbush is significant higher. This is due to
the packing volume different between the rabbit eyes and highbush.
Direct Labor
The labor cost for this operation is based on the University of Georgia’s Blueberry farm
in Alalpaha Georgia and suggestions from the Brantley County Cooperative Extension Service.
21
Table 11. Labor Cost for the Facility and Per Flat
Cost Category
Labor Cost
Joint
Rabbiteye(Per flat)
66.7%
Highbush (Per Flat)
33.3%
$20,160
$.03
$.47
Variable Costs
Other direct variable costs associated with this project include utilities, insurance, repairs,
rental agreements, disposal, interest on working capital, and operating costs. The operating cost
include the cost of each flat and plastic holding containers. Positive relationships exist among
the processed tons and the variable costs, although this is not linear. An increase in processed
volume increases the variable costs.. Table 18 provides the different scenarios variable cost. A
detailed list of these costs can be seen in appendix page.
Table 12. Variable Cost for the Facility and Per Flat
Cost Category
Variable Cost
Joint
Rabbiteye(Per flat)
66.7%
Highbush (Per Flat)
33.3%
$407,429
$2.66
$2.55
The highbush cost are less due to the cheaper packing containers needed for the smaller sized
units versus the large sized rabbit-eye containers.
Breakeven Analysis
The purpose of this investigation was to see if local producers could operate a packing
shed at or below the cost of other contract packers in the area. Currently, the blueberry producers
in Brantley County after harvest deliver the blueberries to Alma to be packed. If the facility
investigated appears competitive with the contract packers the producers can save time and
money from eliminating the 45 minute drive to Alma.
Table 13 indicates the total cost of operating the blueberry packing shed and the cost per
flat of each variety.
22
Table 13. Total Cost
Joint
Rabbiteye(Per flat)
66.7%
Highbush (Per Flat)
33.3%
Labor Cost
$20,160
$.03
$.47
Variable Cost
$407,429
$2.66
$2.55
Fixed Cost
$83,871
$.10
$1.94
Total Cost
$512,960
$2.79
$4.99
Cost Category
The producers need to decide based of the cost per flat if they wish to pursue constricting
and operating a blueberry packing shed.
Business Forms Available to the Blueberry Packing Shed
A business may be conducted through a variety of organizational structures. An attorney,
accountant, financial advisor, tax advisor, or banker may help you decide which form would be
most suitable. One of the primary considerations in selecting a business organization is
protection of a business owner from liability. Also to be considered is the transferability of
ownership rights, the ability to continue as a business in the event of the death or withdrawal of
one or more of the owners, the capital needs of the business, and tax liabilities.
Note: Legal requirements are determined by the business structure selected. The statutes are very
specific on the regulations required as you set up your business structure. The Corporations
Division of the Georgia Secretary of State has information and literature that can help determine
the best structure for you. You can visit their web site at http://www.sos.state.ga.us/corporations/.
Ultimately, however, legal counsel or the assistance of a professional accountant may be needed.
The most common business structures are:
Sole Proprietorship - The single owner of the business is a sole proprietor. The single owner has
sole control and responsibility. The sole proprietorship is easily formed, allows important
decisions to be made quickly, and may enjoy fewer legal restrictions.
The sole proprietor’s responsibilities include:
•
•
•
•
•
Procuring all capital.
Personal liability for all claims against the business.
Showing business profits as part of the owner’s individual taxable income.
Obtaining local business licenses.
Registering the name of the business when using a trade name in the county where
it will transact a majority of its business.
23
General Partnership - A partnership is an association of two or more people acting as co-owners
of a business for profit. A partnership can be created by an oral or written contract between the
individuals. It is wise to have an attorney draw up a partnership agreement specifying rights and
obligations of the partners. Almost any management and profitsharing agreement can be
arranged.
A general partnership: Requires no official registration beyond that required for a sole
proprietorship. Extends liability to the personal assets of the business partners. It is required to
file those germane to all business entities such as a business license, trade name registration,
proper permits and the like. Shares its profits and losses among the partners. Each partner is then
taxed at personal income tax rates.
Limited Partnership - Limited partnerships are more closely regulated than general partnerships,
permitting investors to become silent or limited partners without assuming unlimited liability.
There must be at least one general partner who manages the business with one or more limited
partners whose liability is limited to the extent of their investment.
In a limited partnership:
•
•
•
General partners share full liability.
Limited partners may take no part in running the business.
The limited partnership must register with the Georgia Secretary of State
Corporations Division. However, they do not have the requirements of filings,
publications, or record maintenance of corporations.
Business Corporation - A corporation is a more complex form of business organization. A
corporation is a legal entity and exists apart from its owners or shareholders. As a separate entity,
it has its own rights, privileges, and liabilities apart from the individuals.
A corporation:
•
•
•
•
•
•
•
Must file its Articles of Incorporation with the Corporations Division of the
Georgia Secretary of State.
May be formed for profit or for nonprofit purposes.
The liability of shareholders (or owners) to creditors is ordinarily limited to the
amount of each shareholder’s capital stock investment.
Is unaffected in its continuity by death or transfer of shares by any of the owners.
Requires more extensive record keeping.
Pays taxes on its profits.
Taxes on dividends are paid by its shareholders.
S Corporation - The S Corporation combines parts of the corporate and partnership forms of
business organization. The Internal Revenue Code permits a privately held corporation, one with
24
up to 35 shareholders, to avoid corporate taxation by having each shareholder report the share of
corporate income on his or her individual income tax return.
The S Corporation:
•
•
•
•
•
•
•
•
•
Generally does not pay tax itself. However, there are two situations which may
result in tax to the corporation:
1. Excess net passive income
2. Tax on certain capital gains
Remains a corporation in the view of the state and complies with state corporation
regulations.
Must have only one class of stock.
Uses a calendar tax year or shows a business purpose for adopting a fiscal year.
Must have the consent of all shareholders to having S Corporation status.
Must be made up of shareholders that are individuals, estates, or trusts, but not
corporations.
Can only have shareholders that are United States citizens or residents.
Cannot be a member of an affiliated group of corporations. Also ineligible are
most financial institutions, insurance companies, and domestic international sales
corporations. See IRS regulations for more information.
Prohibits certain types of income and business activities.
NonProfit Corporation - A nonprofit corporation is created to help people achieve a common
purpose. It provides a useful and inexpensive structure for the enterprise of groups of all sizes,
from community campaigns or events to perpetual and diverse activities by hundreds and
thousands of people.
A nonprofit corporation may be formed in Georgia for any lawful purpose, but not for financial
profit. It is an organizing structure useful to small and large scale activities, involving only a few
people or many hundreds of people. It does not require large sums of money and it can be
prepared initially by following a few simple rules:
•
•
•
It may not have shareholders or pay dividends.
It may compensate members, officers, and trustees, (in reasonable amounts) for
services rendered.
Nonprofit incorporation status does not guarantee that your organization will be
granted tax exempt status, nor does it ensure that your contributors can deduct
their gifts from reported personal income. Nonprofit incorporation is generally a
prerequisite to applying to the Internal Revenue Service for preferential tax status,
under IRS Code section
501(c)(3). To apply for exempt status contact the
IRS for the necessary application forms.
Limited Liability Company - The Limited Liability Company (LLC) combines many favorable
characteristics of corporations, and limited and general partnerships. The LLC provides limited
25
liability to its members and offers them the same favorable IRS tax treatment enjoyed by partners
in general and limited partnerships.
A Limited Liability Company:
•
•
•
•
•
•
Must file “Articles of Organization” with the Corporations Division of the
Secretary of State.
Allows members to manage the company themselves or to elect managers.
Works best with five or more members.
Allows members to engage in management without risk of losing their limited
liability status.
Follows simple registration and annual reporting requirements similar to those of
corporations and limited partnerships.
May be taxed by the IRS as either a corporation or as a partnership, depending on
its structure.
Cooperatives - First and foremost, cooperatives are businesses. But they are autonomous
businesses owned and democratically controlled by their members-the people who buy their
goods or use their services-not by investors. Unlike investor owned businesses, cooperatives are
organized solely to meet the needs of the member-owners, not to accumulate capital for
investors. As democratically controlled businesses, many cooperatives practice the principle of
"one member, one vote," providing members with equal control over the cooperative.
Cooperatives fall into four categories: consumer, producer, worker and purchasing/ shared
services.
Cooperatives follow seven internationally recognized principles:
•
•
•
•
•
•
•
Voluntary and Open Membership
Democratic Member Control (one member, one vote)
Member Economic Participation
Autonomy and Independence
Education, Training and Information
Cooperation Among Cooperatives
Concern for Community
Under the Georgia Code, only agricultural producers may form a cooperative. Other groups may
form a corporation and act like a cooperative but only agricultural cooperative may use the name
“cooperative” in their title.
26
A cooperative:
•
•
•
•
•
•
•
Must file its Articles of Incorporation with the Corporations Division of the
Georgia Secretary of State. Cooperative are incorporated under Title 2-10-80 of
the Georgia code.
May be formed for profit purposes.
It has limited liability to members. The liability of members (or owners) to
creditors is ordinarily limited to the amount of each member’s investment in the
cooperative.
Is unaffected in its continuity by death or transfer of stock shares by any of the
members.
Requires more extensive record keeping.
May have limited tax exempt status on its profits based on IRS status.
Taxes on patronage is paid by its members based on use.
27
Table 14: General Comparison of Georgia's Most Commonly Used Types of Business Organizations
Proprietorship
General
Partnership
Limited Partnership
Corporations
LLC
Cooperatives
M ethod of
Creation
Owner commences
business activity
Created by
agreement of the
parties
Created by
registration with the
state under statutory
authority
Charter issued by
the state under
statutory authority
Charter issued by
the state under
statutory authority
Charter issued by the
state under statutory
authority
Entity Status
Not separate from
owner.
In some cases , can
be separate from
owners.
Separate from limited
partners, not usually
separate from the
general partners
Legal entity,
separate and
distinct from
owners.
Legal entity
separate and
distinct from the
member/owners.
Legal entity separate
and distinct from the
member/owners
Liability of
Owners
Owner is 100%
liable for all debts.
Unlimited liability
for all partners.
Limited liability for
limited partners only.
Shareholders liable
only to extent of
paid-in capital.
Members enjoy
complete limited
liability similar to
that of limited
partners.
Member is liable
only to extent of
paid-in capital.
Duration
Same as owner
Terminated by
agreement of
partners, or by a
partner’s
death, withdrawal or
bankruptcy
May be perpetual
May be perpetual
May be required to
specify term of
years; must be 99
years or less
May be perpetual
Transfer of
Interest
May be sold at any
time
Generally, sale of
partnership interest
terminates the
partnership; may
create new
partnership.
Limited partner may
sell interests; general
partners may not sell
interests without
consent of the others,
depending on the
by-laws or charter
Shareholders may
sell or transfer
shares of stock
Operating
agreement defines
restrictions, if any,
to transferability of
a member’s
interests
Membership limited
to agricultural
producers and may
be further limited by
charter
28
Proprietorship
General
Partnership
Limited Partnership
Corporations
LLC
Cooperatives
Control
By owner
General partners
each have a direct
and equal voice in
management unless
expressly agreed to
otherwise
Limited partners have
no management rights
or control
Shareholders elect
the Board of
Directors which
sets policy and
appoints officers
The company is
owned by its
members and is
managed by its
members or by
elected managers;
an Operating
Agreement governs
policy
Members elect the
Board of Directors
which sets policy
and appoints officers
Capital
Limited to what
the owner raises
himself
W hat the general
partners can raise
themselves
W hat the limited
partners and general
partners can raise
collectively
Based on issuance
and sales of shares
of stock
Raised by the
members
themselves
Based on equity
contribution of
members and debt
Taxation
Profits are taxed to
owner as an
individual
Profits are usually
taxed to each owner
as agreed in contract,
or all share equally
whether or not
distributed
Profits are usually
taxed to each general
partner and each
limited partner as
agreed in contract
Double taxation;
corporate profits
are taxed to the
corporation;
shareholder profits
in form of
dividends are taxed
as they receive
them
Profits may be
taxed to each
member similar to
a partnership, or
the company
may be taxed as a
corporation
Limited tax
exemption in some
cases when profits
allocated to
members.
29
Impact Analysis
Impact analysis is a key component of any feasibility study. An impact analysis shows
the effect of a new venture on the local and state economy. Building and implementing a
blueberry packing shed in Georgia would impact the economy on two levels. The new plant
would generate output as it begins packing blueberries. These sales would, in turn, generate
additional sales as the plant purchases inputs. The suppliers to the plant will increase the
purchase of their inputs, thus increasing demand for those items. These increased sales will
ripple through the economy. An input-output model will capture and quantify these effects.
The input-output model, IMPLAN (Impact Analysis for PLANning, Minnesota IMPLAN
Group) was utilized for this project. IMPLAN can predict the effects of a new venture on output
(sales), employment and tax revenue. IMPLAN models can be constructed for a state, a region or
a county. Input-output models work by separating the economy into its various sectors, such as
agriculture, construction, manufacturing and so on. An IMPLAN model will show each sector
and industry in the specific region's economy. The model can capture how a change in one
industry will change output and employment in other industries. The changes in the initial
industry (blueberry packing) are labeled direct effects and the changes in the other industries are
called indirect effects. The direct and indirect effects are summed to give the total economic
impact.
The first scenario (Table 14) examines a packing shed operating during normal season.
The plant’s output, if it contract packed, would be $511,310, so this will be used for the impact.
It will employ 5 people. Table 14 indicates that sales from the plant will increase economic
activity by $440,772, bringing the actual total state impact of the packing shed to $952,082. In
addition to the 5 jobs at the plant, another 4 jobs would be created in Georgia. Finally, the plant
will increase state and local tax revenue by $28,389.
Table 14. Total Impacts for a Packing Shed
Output
Employment
Tax Revenue (State)
Direct
Indirect
Total
$511,310
$440,772
$952,082
5
4
9
NA
NA
$28,389
Conclusion
If the blueberry producers in the Brantley County area wish to pack their blueberries
instead of contracting packing, they can save time and money by establish a shed in the area. The
total impact of the shed to the states economy and the surrounding economy is significant enough
to justify funding through an economic development authority or other financing office. The
shed provides an opportunity for the local producers to save money on fuel, packing and time.
30
Thus, allowing them to be more productive and efficient in growing blueberries. Adding a small
kitchen to the facility provide the resources needed to add value to the cull blueberries in the
form of jams, jellies, and various projects. The breakeven of the kitchen was not determined,
however a substantial market analysis in included in the paper.
The Center for Agribusiness
& Economic Development
The Center for Agribusiness and Economic Development is a unit of the College of
Agricultural and Environmental Sciences of the University of Georgia, combining the
missions of research and extension. The Center has among its objectives:
To provide feasibility and other short term studies for current or potential Georgia
agribusiness firms and/or emerging food and fiber industries.
To provide agricultural, natural resource, and demographic data for private and
public decision makers.
To find out more, visit our Web site at: http://www.caed.uga.edu
Or contact:
John McKissick, Director
Center for Agribusiness and Economic Development
Lumpkin House
The University of Georgia
Athens, Georgia 30602-7509
Phone (706)542-0760
caed@agecon.uga.edu
The University of Georgia and Fort Valley State University, and the U.S. Department of
Agriculture and counties of the state cooperating. The Cooperative Extension Service
offers educational programs, assistance and materials to all people without regard to race,
color, national origin, age, sex or disability.
An equal opportunity/affirmative action organization committed to a diverse work force.
FR-02-10
September 2002
Issued in furtherance of Cooperation Extension Acts of May 8 and June 30, 1914, the
University of Georgia College of Agricultural and Environmental Sciences, and the U.S.
Department of Agriculture cooperating.
J. Scott Angle, Dean and Director