Saskatchewan Organic
Meat Market
Kim Minogue
Kim Mclean
Kristin Nemeth
Kari Henderson
Project Set up


Proposed by Simon Weseen M.Sc. and Gary
G. Storey P. Ag. who currently work in the
Department of Agricultural Economics
Research the possibility of setting up a
strictly Saskatchewan organic meat market
Mission Statement
“The Saskatchewan Organic Meat Market will
provide a healthy, fresh, safe, chemical free,
and traceable meat product that originates
from one Saskatchewan organic livestock
location”
Goals & Objectives




Promote Saskatchewan organic livestock
industry
Establish reliable clientele
Provide a quality, well-recognized product
Become know to all organic consumers
Project Benefits



Provide a market for SK organic livestock
producer’s products
Provide high quality, safe and traceable
product
Provide information for benefits of organic
products
Location - #1- 3414 8th Street
Floor Lay Out



Spacious area for
workers and equipment
Adequate retail area
Flow of carcasses
Flow of Work
Pine View Farms - Osler, SK
Butcher
Fresh Meat Cooler
Consumers
Frozen Cuts
Consumers
Organic Slaughtering
and Processing Guidelines



Slaughter facility must be certified by organic
certifying agency (OCIA)
Facilities inspected annually by an auditor to ensure
up-to-date documents (Storage, cleaning and
transporting records, etc.)
Cleaning must not leave residues on equipment.
–
–

Cleaners approved by OCIA
Water must be tested to meet standards
It is imperative that the meat stays free from
contamination
Capital Budget



Equipment
Net Working Capital
- Cash, inventories
Total Capital Required
$159,000
$ 76,281
$234,987
Organizational Structure
Shareholders
Executive Directors
3 Organic Industry Rep’s
Manager /
Meat Specialist
Butcher
Part-Time
Customer Personnel
Organizational Structure




Run as a corporation
Shareholders appoint board of directors
Manager will be selected by the board of
directors
Manager will then be in charge of a full-time
butcher and one part-time customer
personnel
Job Descriptions

Manager
–
–
–
–

Butcher
–
–

Hiring and overseeing employees
Ordering proper amounts of meat
Ensuring smooth operation
Maintain positive employee and customer relations
Cutting appropriate quantities and types of meat
Assisting with customer relations
Part-time personnel
–
–
Provide customer service
Promote organic products
Employees

Employee wages
–
–
–



Manager $45,000
Butcher $40,000
Part-time $7.50/hour
The salaries will increase 2% yearly with a
$0.25/hr yearly raise for the part time employee
Benefits include EI, CPP, and workers
compensation (holiday pay for part-time wage)
Will be hired based on experience and the
butcher will be responsible for providing any
additional training
Direct Labor & Benefits
Full-Time Labour
Manager
Butcher
Part-Time Labour
Customer Personnel
Benefits for Employees
Full-Time
Part-Time
Workers
Compensation
TOTAL DIRECT
LABOUR &
BENEFITS
$
$
2004
45,000
40,000
$
$
$
2005
45,900
40,800
7,200
$
$
$
7388
961
$
$
$
$
2006
46,818
41,616
7,440
$
$
$
7472
986
2,148
$
100,632
$
$
$
2007
47,754
42,448
$
$
2008
48,709
43,297
7,680
$
7,920
$
8,160
$
$
7560
1012
$
$
$
$
7734
1064
2,193
$
2,239
$
2,286
$
2,334
102,682
$
104,771
$
106,894
$
109,052
7647
1039
Market Overview




Growing demand for organic meat
Saskatchewan has potential to meet this
demand
Incentive to become registered organic
livestock producers
The need for federally inspected organic
slaughtering and processing plants
SWOT Analysis


Strengths
– Only exclusively organic meat market in Saskatchewan
– Provide a high quality product at a convenient location
– Educated staff available to answer all questions and provide
you with the benefits of consuming organic meat
– Able to educate the public about organic products
Weaknesses
– Organic meat is sold at a premium
– Limited profitability for by-products (bone carcass)
– Limited consumer demand
SWOT Analysis

Opportunities
– Meat is provided at a convenient location
– Organic meat frees consumers of food safety and
healthy lifestyle concerns
– Products produced by Pine View Farms provide a
consumer product with traceability and
reassurance
– The market has the potential to expand into other
organic products
– Eligible for grants and funding (CARDS and
Agriculture development fund)
SWOT Analysis

Threats
– People who do consume organic meat purchase it
from reliable and trust worthy producer
– Natural producers have a quality product at a
lower price
– Limited number of consumers in Saskatoon and
surrounding area
Marketing Mix

Product
–
–
–
Organically raised and processed beef and pork
Animals consume feed free of pesticides,
chemical fertilizers, and GMO’s
Organic livestock is verified and inspected by an
accredited certifying body
Marketing Mix

Service
–
–
–
–
Gives consumers the peace of mind regarding the
meat they are consuming
Location is more convenient compared to the
farm gate
Butcher will cut meat according to customer
specifications
The market will educate consumers on the
benefits of organic products
Marketing Mix

Target Market
–
–
–
Consumers that can afford to buy and those who
make it a priority to buy
High income households in Saskatoon
Adults responsible for making purchasing
decisions for themselves and their children
Estimated Market Share & Meat
Consumption


Type of Meat
Total # of organic
animals
consumed
per week
% of market
share the
Market
hopes to
capture
# of organic
animals
ordered per
week
# of organic
animals
ordered per
year
Beef
6.58
30%
2
104
Pork
25.84
15%
4
208
Canadian meat consumer rates per capita and
applied to Saskatoon
Organic consumer percentage to derive the above
numbers
Marketing Mix

Pricing
–
–
–
–
The Saskatchewan Organic Meat Market is a price maker
The premium meat will be marked up 30% from natural
prices
Beef (prices per pound) – Ground $3.42
- Roast $8.40
- Steak $12.00
Pork (prices per pound) – Chops $5.10
- Ham $4.37
- Roast $3.54
Marketing Mix

Promotion
–
–
–
Two Types – inform organic consumers about
store
- convince current traditional meat consumers
to change to organic meat
External promotion – trade shows, websites, radio ads,
magazine and publications all dealing with healthy living
and/or organic products
Internal promotion – cooking demos, taste tests, in-store
brochures and displays
Direct Competition
Saskatchewan Organic Meat Market Direct Competitors
Business
Steep Hill Co-op 730
Broadway Ave.
Boryski’s Butcher Block
2210 Miller Ave. &
Broadway Ave.
Strengths
Weaknesses
Existing clientele base
Location
high income consumer
base as well as some
student consumers
Very little organic meat
selection
 Co-op structure difficult to
understand,
 staff consists of members
which may lack in knowledge
of organic products
Specialized meat
production
knowledgeable
experienced staff
good location
small variety of organic
products
Natural meat – grass fed beef
coming from 4 different
farmer which may alter
consistency
Indirect Competition
Saskatchewan Organic Meat Market Indirect Competition
Business
Strengths
Weaknesses
Prairie Meats
2326 Miller Ave. & 8th St
Specialized in meat
production
Higher prices for a
traditional product
M&M Meat Shops
3322 8th St E & Lawson
Heights Mall
Diversified products
prepared products
variety of location
Don’t do their own
processing
Costco
115 Marquis Dr.
High quality meats
large quantities for
cheaper
No personal service
IGA, Safeway, etc.
Located throughout
Saskatoon
Convenience - everyone
has to go to the grocery
store
Limited traceability of the
products
Marketing Budget
Promotional Activity:
Estimated Expense:
Paper & Printing
$1000
Publications & Magazines
$2000
Website
$1500
Trade Show
Trade Show Booth
Trade Show Supplies & Expenses
$500
$3000
Radio Spots
$1500
Taste Tests & Demos
$500
Total Marketing Expenses
$10000
Financial Results
2004
2006
2008
2010
2012
Total Revenue
$
475,863
$
514,533
$
556,576
$
602,296
$
652,024
Cost of Goods
Sold
$
367,382
$
487,293
$
502,129
$
521,151
$
543,155
Gross Margin
$
108,481
$
27,241
$
54,447
$
81,144
$
108,870
Total Expenses
$
15,952
$
$
15,945
$
15,839
$
15,646
$
92,529
$
$
65,305
$
93,223
$
3,655
$
$
-
$
-
$
85,941
$
$
60,655
$
86,586
Income Before
Taxes
Income Taxes
Net Income
(Loss)

15,978
11,262
$
-
10,962
38,502
$
$
Internal Rate of Return – 39%
35,761
Sensitivity Analysis


Conducted for quantity purchased, selling
and purchasing price
Most sensitive variable
–
–
–
Quantity of beef purchased
Selling prices of all pork cuts
Purchase price of beef
Best/Worst Case Analysis
Worst
Base
Best
Average Revenue
75%
100%
150%
Average Materials
Purchase Price
120%
100%
75%
Average Revenue
$ 428,647
$ 571,530
$ 857,295
Average Materials
Purchase Price
$ 384,248
$320,207
$240,155
Conclusions


Feasibility will depend on consumer support
Could be a viable enterprise in larger centers
with a higher number of organic consumers
Questions and Comments?