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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
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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
Spacious area for workers and equipment Adequate retail area Flow of carcasses Floor Lay Out
Pine View Farms - Osler, SK Butcher Fresh Meat Cooler Frozen Cuts Consumers Consumers Flow of Work
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 $159,000 • Net Working Capital $ 76,281 - Cash, inventories • Total Capital Required $234,987
Shareholders Executive Directors 3 Organic Industry Rep’s Manager / Meat Specialist Butcher Part-Time Customer Personnel Organizational Structure
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 • Hiring and overseeing employees • Ordering proper amounts of meat • Ensuring smooth operation • Maintain positive employee and customer relations • Butcher • 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
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 • 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
Financial Results • Internal Rate of Return – 39%
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
Conclusions • Feasibility will depend on consumer support • Could be a viable enterprise in larger centers with a higher number of organic consumers