The 2014 USDA Maple Syrup Crop Report came out in early June. I’m late to give my $0.02 because I have been mulling it over. I scoured that report frontwards, backwards, and upside down. I want to know what is happening in the industry. I like analyzing trends. So I took a closer look at the numbers in my spreadsheet and came up with a new indicator: Bulk-Retail Variance (BRV).
The Bulk-Retail Variance is simple. Take the average price per gallon of bulk maple syrup of the top 10 maple syrup producing states and subtract it from the average price per gallon of retail maple syrup of the top 10 maple states. I wanted to see what states do a good job of selling their maple syrup in bulk and which states do a good job of promoting their own maple syrup directly to the consumer. So take a look at my handy dandy rankings and chart.
There are a couple reasons Ohio’s bulk maple syrup price is averaging third in the nation. First, Ohio’s maple syrup is sought after in the commodity maple syrup market. The soil and climate in Ohio results in maple syrup regarded as one of the best in flavor by industry experts. So, if you are in Wisconsin or Vermont and need good quality syrup to slap your label on – you can’t go wrong with Ohio. Secondly, due to the location of being further South than other maple producing states, Ohio is usually one of the first seasons to start making maple syrup. Spring starts about a week to 10 days earlier than the rest of the maple belt. This is important because, in February the big maple syrup factories called “packers” can really deplete inventory over the 10 months leading up to the maple season. So, supply and demand kicks in. Less syrup supply = higher premiums. Ohio maple syrup usually has a buyer waiting before it is even made and is often shipped still warm in the drum.
Here is where it gets interesting. Check out Chart #2 showing retail value of maple syrup.
Oh man. What a kick in the teeth. Ohio makes all of this great maple syrup that is sought after in Vermont, New Hampshire, Wisconsin, etc – but look at the numbers – dead last in retail value. If you are a consumer buying maple syrup directly from a reputable local sugarhouse in Ohio you are getting a bargain. Good for you. Enjoy it while it lasts. The national statistitics show a gallon of retail maple syrup made in Ohio is a bargain.
Now take a look at the Bulk-Retail Variance and the BRV graph.
So what do the BRV numbers tell us? For one, the money made on gallon of Ohio maple syrup is not staying in Ohio. In fact, a gallon of Ohio maple syrup is making more money for another state outside their boundary than any other state. Not a good statistic if you are selling retail in Ohio. Two, if a gallon is sold directly by the sugarmaker to the consumer it isn’t very profitable. In fact, I have seen maple syrup sold for $35/gallon. This is a very poor business decision. Here is why. A gallon of maple syrup is worth $30 in the drum or tanker without any additional value being generated. Once you put it in the jug – you have labor, energy, and packaging cost. Now you are at $35 with no additional profit and you are burning and churning equipment. Very charitable of you. You made $0 more dollars profit than if you would have just sold it bulk to Vermont.
I think the low BRV number for Ohio is a symptom of some bigger issues in Ohio’s maple industry. This is the challenge of the leaders in the Ohio maple industry: Ohio maple producers do not value their maple syrup as much as the rest of the US commodity market does. Ohio maple farmers need to raise their prices to be fair with themselves and their resources. The rest of the US Maple Producing states already know it, too. Packers prove this with their checkbooks by paying a premium for Ohio maple syrup and the cost of freight to transport. In fact, with the cost of freight involved with shipping Ohio maple syrup out of state you could add at least another $1.00/gallon per gallon of buying bulk Ohio maple syrup from out of state. That would actually put the value of Ohio’s bulk maple syrup above Vermont’s based on the numbers in chart #1. Packers know how valuable our maple syrup is.
I hear the argument all of the time from producers, “The guy down the street is selling his maple syrup for $35 a gallon! How can I compete with that?” My answer is usually the same variation of, “Why would you want to? You don’t want those customers. If you have to raise your price a dollar because the plastic jug cost increases a dollar you will lose that customer because that customer is loyal to the price. Someone will always be a dollar cheaper.”
The conclusion I draw is Ohio needs a stronger maple brand. Building a brand of Ohio maple syrup is a twofold endeavor. First, in order to build a Maple Trail in Ohio and develop a connection with the consumer, sugarmakers are going to need to embrace tourism as a way to build their brand loyalty. Ohio sugarmakers need to give visitors a reason to visit. This means investment into an experience and facilities. Most sugarhouses in Ohio are set up to make maple syrup efficiently, not entertain guests. It is time to rethink the role of our great Ohio sugar shacks.
If you are an Ohio maple producer and would like to join Ohio’s Maple Madness tour please visit www.ohiomaple.org. We are here to help you develop your own identity and customer loyalty. Likewise, consumers that like maple syrup but purchase it from out of state profit takers need to visit local sugarhouses.
If you are a maple head and want to help keep Ohio dollars in Ohio mark Saturday/Sunday March 14th & 15th and 21st & 22ndth 2015 on your calendar. Pick up a Maple Ohio magazine (First issue due out in Feb 2015) or visit www.ohiomaple.org and peruse for a sugarhouse that fits your style. Make sure you visit as many sugarhouses as you can in March and find the sugarmaker that offers you what you value. No two sugarhouses are the same and a true maple head can see the differences!