To follow-up on my last post that looked back at two decades of almond pollination, I want to offer some thoughts about where the industry’s at right now. I’ll focus this post on the current situation and hold off on discussing where the industry’s headed until my next post.
Back in 2005, Joe Traynor warned us that “the real crunch for bees will come in a few years when bearing almond acreage hits 730,000 acres.” We eclipsed that number in 2009, and 10 years later we’re sitting on 1,170,000 bearing acres with another 300K non-bearing. With new trees being planted faster than ever, you have to wonder: will the bubble ever burst?
As we all know, the problem isn’t with demand for almonds—they sell like hotcakes that have a longer shelf life. The problem is with the finite resources required to produce the nuts, most importantly, bees and water.
I always chuckle when I read things online about how people should boycott almonds or that vegans shouldn’t eat them because they’re “harmful” to bees. In reality, almonds are the reason why beekeepers can afford to treat for mites 5, 6, even 7 times a year. If beekeepers only had honey revenue to rely on, bees would be in serious trouble.
But the additional revenue from pollination isn’t enough to grow the commercial beekeeping industry to meet the consumer demand for almonds. After all, the costs of extra mite treatments and added labor basically wipe out any profits for beekeepers.
There’s no reliable estimate for the total number of beehives in the U.S., but it’s somewhere near 2.6 million. If almond pollination requires 2 hives per acre, quick math tells us that we only have the capacity to pollinate 1.3 million acres if we deploy every single hive in the nation. Keep in mind, there are nearly 1.5 million acres of almond trees currently in the ground.
Advantages of almonds
Aside from being highly nutritious, almonds are a strategically sound crop because they have an excellent shelf life. Compared to the fruits and veggies that grow alongside them in the Central Valley, there’s no real rush to get almonds to the end consumer. That’s a huge perk for growers—who can afford to play the market and sell when prices are high—and for retailers—who can get the product on their shelves at a lower cost.
Along the supply chain, almonds also offer environmental benefits. Unlike fruits and veggies that are susceptible to crushing and bruising, almonds can be piled high without reducing their value. There’s no need for plastic clamshell containers or refrigerated shipping units for almonds to stay fresh before they reach the end consumer.
Here’s another chart from that study I linked above. This one compares water footprint to nutritional value. Notice how the most water-intensive crops are the ones with the longest shelf life?
The continued growth of the almond industry is a complex issue. Almonds are a nutritious food that can reach end consumers with relatively little environmental impact. Consumers demand more and more almonds each year, so expanding production makes sense.
Except for the fact that the two most critical inputs for production are in increasingly short supply. I’m not saying the Central Valley is about to run out of water, nor am I suggesting or that the nation is on the verge of a bee apocalypse. I’m simply noting that the availability of water and bees is not compatible with consumer demand for almonds.
As we gear up for pollination season 2020, it’s worth looking back 20 years ago, before almond pollination grew into an industry that generates half a billion dollars each year.
As I dug into some research on the past 2 decades of almond pollination, I uncovered all the elements of a compelling story: success and failure, risk and danger, thousand-mile journeys, moments of treachery and deceit, and of course, the pursuit of riches. What was once just a collection of gentlemen’s agreements between good old boys in the valley, almond pollination evolved into a modern-day gold rush. And it came together in our lifetime.
You see, almond pollination is a relatively recent phenomenon—at least to the scale we see today. Nowadays, more than 2 million hives make the trek to California’s Central Valley each February, where they can fetch an average of almost $200 per hive. This of post explores the making of the 9-figure industry that emerged in the past two decades.
An industry 2 decades in the making
Let’s hop into the time machine and journey back to the turn of the century, with pollination prophet Joe Traynor and our favorite lab-coat-wearing beekeeper Randy Oliver as our tour guides:
2000 - Joe Traynor (link)
One of Joe Traynor’s earliest articles on Beesource.com, this January 2000 post gives us a glimpse of what pollination was like at the turn of the century. Though this article isn’t entirely focused on almond pollination, Joe gives us a good idea of where the industry was at the time: “Almond growers pay dearly for their bees – rental fees are up to $50/colony.” Joe also offers some foresight into where the industry’s headed: “without almond pollination income, many US. beekeepers would be out of business.”
But, in a scathing editor’s note, beekeeper Oren Best couldn’t let Joe’s comment go unchallenged. Kicking off by suggesting that “Joe Traynor doesn’t get out much,” (yikes) Oren argues that “honey production is still the back bone of the bee industry” and “the pollination industry is not wrapped around the almond farms.” This beekeeper’s perspective truly goes to show how forward-thinking Joe was 20 years back. Hindsight’s 20/20, but I wonder how Oren would respond today.
2005 - Joe Traynor (link)
Published November 2005, Joe authors this article in response to the Great Bee Shortage from earlier that year. Just 5 years after the article above, almond pollination has changed radically. In 2000, Joe scoffed at the idea of growers paying $50 per hive. Now he tells us that prices are in the $100-150 range. Joe identifies three driving forces behind these price hikes: fear (from growers), greed (from beekeepers) and the climbing price of almonds.
Word had spread among beekeepers nationwide that there’s an opportunity to take advantage of the soon-to-be wealthy almond growers, at least that’s how Joe seems to tell it. This chart from the 2016 Almond Almanac tells a compelling story in the mid 2000’s, and it lends credence to Joe’s theory about beekeepers jacking up their prices after 2005.
Joe wraps up by offering his prediction for the 2006 season, and whether growers should prepare for another bee shortage:
“Will there be a shortage of bee colonies in 2006? It depends on how you define ‘bee colony.’ There has been a shortage of strong bee colonies (defined as 8 or more frames of bees) each and every year since almonds were first planted in California 100 years ago; 2006 will be no different if two strong colonies per acre is the accepted standard. There will likely be the requisite number of bee boxes to cover CA’s 570,000 bearing acres in 2006 but the content of these boxes won’t be known until almond bloom commences in early February.”
In other words, yeah, roughly 1.2 million bee boxes will make their way to the almonds—the real question is whether there will be quality bees in those boxes.
2007 - Randy Oliver (link)
Randy's first post about almond pollination is a long one, and it covers everything from industry history to economics to colony health. I’ll keep my summary brief but the whole article is excellent and I suggest you read it through. Randy starts off with a fascinating oral history of almond pollination, from a friendly exchange of services to a cut-throat, hundred-million-dollar industry.
In the good old days, beekeepers would ask growers to place their bees in the orchards as a favor, to build their hives up early in the season. As plantings increased, beekeepers “had the audacity” to charge growers as much as 25¢ per colony! Madness! By the ‘80’s, when Randy got involved, he could fetch $12 per hive. Steady increases over the next 20 years brought the price to $45 per hive in 2004. Then, the Great Bee Shortage of 2005 caused prices to surge to $80 per hive.
2006 is when Randy’s telling differs from Joe’s. The way Joe tells it, as almond prices climbed in late 2005, beekeepers were overcome by greed and demanded a larger slice of the pie. But Randy suggests that it was in fact the almond growers who reacted to the high prices. Hoping to maximize yield by maximizing pollination, growers “started bidding against each other to ensure that if there was a shortage, their orchard would not go without.” Two interesting ways of looking at the 2006 hive price surge, and it’s likely that both theories have elements of truth.
Then Randy gets into the new demand for colony strength inspectors—something that had never been necessary since beekeepers and growers had previously enjoyed a healthy working relationship. He mentions that once hive prices shot up, some beekeepers started placing colony-less boxes (dead-outs) in the almonds filled with frames of honey, so that robbing bees would appear to a grower like just another lively hive. This led to the creation of “frame strength” as a metric designed to standardize the size of a colony for pollination contracts.
I had a lot of fun researching and writing this piece. Even though it's one of our longest-ever posts here on The Bee Word, there was a lot more content that didn't make the final cut. I'll be converting the extra stuff into a few more posts in celebration of the 2020 season. Big thanks to Joe and Randy for their documentation on the history behind almond pollination.
Among folks not familiar with the industry, a common assumption is that honey is the main revenue source for a beekeeper. And that makes sense—they're called honey bees for a reason, right? Most folks know that honey bees are "pollinators," but few understand the extent of how much value they create through pollination.
In fact, commercial beekeepers generate most of their revenue from renting their hives to growers for pollination. On the recent Bloomberg Business of Bees podcast, reporters talked to beekeepers about how their services have shifted over the years. Around this time in the season, beekeepers must decide between making more hives, so you can collect more rental fees, or stronger hives, so you can collect as much honey revenue as possible.
Pollination/honey revenue calculator
This made me wonder, what’s the math on this tradeoff? How does honey and pollination revenue compare? I built this calculator to help beekeepers estimate their income potential:
A few notes
Of course, every beekeeper has unique factors to consider, so this may not capture your exact situation. I had to make some basic assumptions to make this work and there are countless variables I couldn't include. Fore example, geographic location of your sites will affect trucking costs and honey yield (see our trucking cost analysis), pollination rental fees, sale prices for honey, and how many splits you can do on each hive.
Math and assumptions I used:
Other things to note:
This calculator is just a start of a project I'd like to keep building. I think there aren't enough online resources for beekeepers and I'd like to change that. Many beekeepers operate in isolated regions and they tend to stick with what's worked in the past. My hope is to show beekeepers that better opportunities might exist if they're willing to switch things up.
Last week, I wrote about why we decided to pursue a new direction. Now I want to give you a behind-the-scenes look at how we did it. Strap yourselves in, this one’s a bit longer than usual.
Our “Aha!” moment was liberating, but it introduced a new set of challenges. Almond pollination only happens once a year, and at the time of our “Aha!” moment, the next pollination season was less than 10 months away. We had to get something out there, otherwise we’d wait 22 months until bringing new revenue in the door.
With less than a year to build something our target market was willing to pay for, we had to focus. As much as we wanted to develop that beautiful product we envisioned, complete with all the fancy bells and whistles, there simply wasn’t enough time.
We couldn’t afford to be good at all the things—we had to be exceptional at one or two important things. We narrowed in on two guiding principles: the product had to be accurate and it had to be faster than manual inspections.
Much of our time during the development phase was spent on customer discovery. We found a handful of almond growers who weren’t annoyed by our monthly phone calls. These folks were our sounding board. They would tell us if we were still on the right track or whether a course-correction was needed. Ultimately, we had to strike a balance between what they told us and what was achievable.
Accuracy is our first guiding principle for a good purpose. If it’s not accurate, it doesn’t matter how fast the product works. Before we began to think about building speedy software, we started outlining the predictive hive strength model.
The first step towards building an accurate model is to gather data. From May to November, several times a week, we’d set out at the crack of dawn to image hives under infrared. Over the course of this time, we’d end up capturing tens of thousands of infrared images. But it wasn’t as simple as taking a photo and moving on. There were a lot of variables to test in order to find what produced the best results.
That leads into a story about one of my wildest experiences in my 3+ years with The Bee Corp. In order to test the accuracy of our model over time, we conducted a handful of "marathon" data collection studies. This entailed capturing IR images of the same hives every few minutes over the course of several hours.
One muggy summer night, I was tasked with doing a marathon study all by myself from dusk to dawn. I loaded up Ellie’s car with enough sugary snacks and Red Bull to cause a heart murmur and set out to our bee yard tucked away in the rolling hills of Southern Indiana. No cell reception, no WiFi signal, no escape from the dense humidity; just me and all the bugs you can imagine.
I wish I could say it was eventful. It wasn’t. It became a dreary routine: pause my podcast, turn on the camera, grab my flashlight, exit the car, take photo 1, photo 2… get back in the car, shut off the camera, play my podcast for 10 minutes and repeat. By the time the sun came up, there was a visible rut in the grass from tracing the same path 50 plus times that night.
The worst part honestly wasn’t even all that bad. Running on 20+ hours without sleep and with tablespoons of sugar and caffeine coursing through my veins, paranoia set in rapidly. Anytime I heard a strange noise in the woods, I was certain an axe murderer or a grizzly bear was just steps away. But I had a secret weapon: my infrared camera. Equipped with the superpower of night vision, I had confidence that I’d be able to get the jump on any bears looking for a quick snack.
A fun note: I ended up doing 2 overnight marathon studies, once in August and again in October. The second time was during Game 3 of the ALDS—and I’m a HUGE Red Sox fan. In the middle of the woods I was somehow able to tune into Nate Eovaldi and the Sox dish out the most lopsided pounding in Yankees postseason history 😊.
Thanks for sticking through to the end on this one. I hope you enjoyed it. Check back next week to read about Ellie’s takeaways from the February launch.
Last month signaled the climax of nearly 10 months of radical change for our company. In February, we launched our new product: an infrared hive grading solution called Verifli.
This was not your typical product launch. We didn’t send out endless email blasts begging everyone and their mother to try our shiny new thing. We didn’t make a media push to reach millions of eyes. We didn’t slap any sexy branding around it.
In fact, we hardly made much noise at all. We kept our heads down. If you’ve only been following us publicly, you probably have no clue what our company even does anymore. Well, we’re writing this to catch our faithful followers up to speed.
Around last May, our team had a collective “Aha!” moment. In the months leading up to that lightbulb flash, we worked tirelessly trying to figure out how to scale our company, our technology and obviously, our bottom line. We landed on almond pollination.
Each February, three quarters of the nation’s beehives are shipped to California, where 80% of the world’s almond are grown. Over 2 million beehives congregate in California’s Central Valley to pollination roughly 1 million acres of almond trees. At an average fee of $200 per hive, beekeepers in the US gain a healthy influx of cash early in the season while their bees enjoy a head start to the year.
But there are a few key issues. Although bees don’t “hibernate” as we usually think of it, they close up shop for the winter—shutting down the queen’s egg laying, booting non-essential bees from the hive, conserving nutritional storage and clustering tightly to retain heat. Since many big-time bee operations are located in areas with harsh winters, most beehives are at their weakest point in the year around the start of almond pollination.
But the best pollination comes from hives that are in mid-season form, not fresh out of spring training. To compensate for this, growers reward the beekeepers who can build hives to mid-season form by paying top dollar for strong bees.
But this highlights another key issue: the only one way to verify that you’ve got strong bees is by cracking hives open and checking. If you rent thousands of hives, this process can take days, perhaps longer if the weather doesn’t cooperate (like this season). What’s worse, a strong hive can contain anywhere from 10 to 15 THOUSAND bees. There’s simply no way the human eye can distinguish an 11,000-bee colony from a 14,000-bee colony—but there’s a significant difference in terms of pollination output. At the end of the day, an inaccurate hive strength assessment means someone’s leaving money on the table.
Now, to break up the wall of text, here are some amazing photos from our first pollination season (photo credit: Deftly Creative):
We saw this disconnect between beekeepers who are doing everything they can to build strong hives and growers who are willing to pay whatever it costs to get them. We figured there had to be a better way to reconcile their interests and evoke transparency and understanding.
We decided to develop a product to help growers and beekeepers measure the strength of their bees faster and with greater accuracy and objectivity. Our product, Verifli, uses infrared image analysis to map out the heat signature given off by the bees. Using physics and data science paired with real-time weather information, we can deliver an accurate assessment of each beehive with a single infrared photo of the outside of a hive.
With Verifli, there’s no last-second panic when a beekeeper finds high winter losses in mid-January; he can check the bees throughout the winter and give a heads up to his grower if they need to rent extra hives. With Verifli, a grower can set up a true incentive program to reward his beekeeper for every high-strength hive, not just what they find in a 10% sample. With Verifli, a grower can know exactly which parts of the orchard have low-strength hives, so he can shuffle around pallets to maximize pollination.
Our goal with Verifli is to foster transparency. Growers and beekeepers depend on each other— and for the most part, they share similar goals. By creating a common language around how we measure pollination, we hope that Verifli can become a resource for growers and beekeepers to communicate expectations and avoid conflict.
Now that you see the rationale behind our decision to pivot, I want to tell you about how we came up with a plan to launch a product in under 10 months. Check back next week for part 2!