Organic fertilizer demand globally was 17 million in the year 2016 which equals US$ 5.57 billion. According to some analysts, the market will nurture at a seven percent compound annual growth rate through 2025 and reach US$10.23 billion. However, in the US alone it will grow at 14.1%
The farm industry in developed country is shifting towards more environmentally friendly ways. Organic produce is getting more popular among health-caution customers. The biggest challenge with organic farming is to enhance the soil with appropriate fertilizers.
Out of several countries, Belgium is the largest exporter of organic fertilizer followed by the Netherlands and the US.
On the other hand, France is the largest importer.
There are several key players in the USA Organic Fertilizers manufacturers.
Key Organic Fertilizer players in North America:
Governments support the movement by subsidizing the organic farm industry.
2. New market selection and analysis
Mary Forte started the Alpaca breeding business back in 1994. They started with three Alpacas animals and grew dramatically to 150 animals as of today. Like all living creatures, Alpacas digest the food to function and produce manure as a leftover. The organic fertilizer business started as an offshoot of the main breeding business. Alpaca’s poop-based fertilizer consists of only natural ingredients. Animals are fed good quality diet and produce well-balanced manure. Due to the nature of the animal’s digestive system, most of the “unwanted” components get decomposed inside the stomach. Mary Foster developed the process which helps clean the manure out even more and enhance it with other organic components. The final result is impressive! It does not have a manure smell, so it can be used inside the home for house plants. It cthe an improve water retention rate. It is easy to use and does not require any special application equipment. The manufacturing uses heat and a special curing process to kill all harmful bacteria and pathogens that might be present in the manure. (Best Plant Fertilizer, n.d.)
Our client has a small but prominent business model setup. We would like to expand it in two different ways: interstate to build up on the production volumes and increase operating funds; and international to start selling in the EU through the flower shops and boutiques as well as e-stores available there.
The market we want to discuss here is Interstate based. The company is a small local Alpaca farm that wants to expand and grow its line of product. Currently, they have a breeding business set up very well with most kinks worked out. The organic fertilizer line is an offshoot of the main business that is still in the setup stage.
The Organic Fertilizer line, Mary’s Alpaca Poop has been initiated already. It has a patented-pending technology process attached to it. It has a USDA Government grant for the further development. According to the policies for the grand the farm needs to match all grand’s funds for the project, therefore we have about $100,000 for the marketing and promotion budget; $49,999 from USDA, and $49,999 from the owner. (Federal Register, Aug 29, 2017, p. 40989)
The nature of the organic fertilizer market in North America
Growth in the organic food industry is driving the organic fertilizers market. Increased concern about the environment has paved way for use of bio-basedthe the organic fertilizers. Growth in rate of adoption of sustainable farming and increasing cost of chemical fertilizers are other demand driving factors of the market. Push from Governments in many developing countries for sustainable farming is expected to maintain steady growth in the market. Less awareness among the farmers especially in developing countries is restraining the growth of the market. The developing countries of Asia-Pacific would provide substantial growth opportunities for the market.
The organic fertilizers market in North America is divided into two major segments: organic residue-based fertilizers and microorganisms (biofertilizers). The type depends on the source of nutrients and raw materials. More than half of the market share is covered by microorganism-based organic fertilizers due to their diversified product application.
The use of chemical fertilizers is causing health issues and hence, there is a huge demand for organic fertilizers in the United States. Consumers are increasingly becoming health conscious and the demand for organic foods is increasing. The organic fertilizers and biofertilizers market is estimated to grow as a result of the increased demand for organic food products.
The demand for fertilizers is highly dependent on the demand for food grains in the country. The arable land is declining and the demand for products is increasing, hence there is a need to increase productivity. The efficiency of the crop can be increased by using fertilizers. Hence, the demand for food grains is driving the growth of the United States fertilizers market. The other factors that are driving the growth of the fertilizers market in the US are the declining arable land and government incentives. The major restraints to the growth are the government regulations in the fertilizer industry. The other restraints are the volatile prices and growing environmental and health concerns regarding the use of chemical fertilizers.
Major Fertilizer companies in the United States include:
Considering the current size of Mary’s Alpaca poops operation, we advise to the extend their market within nearby states. This way we would build the physical presence needed for the bigger expansion in the future. We need to focus on north Pennsylvania and Ohio. The company would save a lot on the freight cost and get closer to Canada for future expansion.
There are other organic fertilizer producers in many states. For instance, the state of Michigan has about 77 organic fertilizer manufacturers; the state of Mississippi has 37 manufacturers; the state of New Jersey has 89 manufacturers; and the state of Wisconsin has 8 manufacturers.
However, it is not very easy to expand and start selling just because a fertilizer is labeled organic. Consumers are aware that label doesn’t necessarily mean that the product is free from pesticides or genetically modified materials. To be free of such contaminants, the product must go through rigorous testing and be labeled for certified organic use. Soil amendments, such as manure and compost, are not technically fertilizers, according to the Colorado State University Extension, because manufacturers are not required to identify the minimum amount of nutrients in them.
We need to focus on near-by states as of this moment to build solid base for the product promotion and distribution. The Manufacturing facility located at here Mary’s Alpaca, 8080 Enon Church Road, The Plains, VA 20198
Virginia state is our home base. Neighbors: North Carolina, West Virginia, Tennessee, Pennsylvania, Delaware, Maryland, and Ohio. We would like to suggest grow within neighbor states first. See Figure 1.
Small local farm stores can be used in each state to facilitate the sales, such as North40, Rural King, Murdoch’s, and etc.
If used right Amazon could be the main and only online sales channel, although there are many products and for customer is hard to choose right product. In this case is better to use e-commerce specialist service to make Mary’s Poop product on top of the search and with high rating. With Amazon FBA program products just need to be shipped to Amazon warehouse and other part – ordering, shipping to customer, storage will be done by Amazon.
To sell product on Walmart website there is two ways. One is to become eCommerce Supplier, with this option products could be shipped to a Walmart fulfillment center and then products would be shipped to customers. Also, with this option products could be shipped directly to customers.
Another easier way is to become Walmart Marketplace seller, where products could only be shipped directly to customer.
As through Walmart website, products could be sold through Sears Marketplace. Sears have end-to-end order fulfillment service FBS (Fulfilled by Sears) that manages warehousing, pick/packing and shipping of customers’ orders for businesses.
This website oriented in homemade, unique, DIY products, which could be suitable for Mary’s Alpaca Poop production. Seller account should be opened and product description with photos uploaded. Products from this website could be sold not only in U.S. market but also worldwide, so product shipping and pricing strategies should be considered.
In eBay listings there is mainly resellers. For Mary’s poop it is not the perfect place to sell product, but it could increase product visibility and potential customers number.
As the brand name get know, maryspoop.com website could be best option for selling online as the all profit margin goes to company without cut to intermediaries. Although website should be improved by functionality and aesthetics.
E-commerce situation in Europe is more or less the same, there is big players like Amazon, eBay and Etsy and also small players like particular gardening e-shops which we can target as sales channels.
With Amazon FBA (Amazon.co.uk, Amazon.de, Amazon.fr) program it would be easy to ship and sell products in Europe, although with eBay (ebay.co.uk, ebay.de, ebay.fr) could be delay and shipping and taxes issues for customers, because if product will be sent from U.S. in Europe country it will be taxed by customs office and final customer would have to pay it. Another situation would be with gardening and flowers e-shop like www.organiccatalogue.com, www.gardenbargains.com, www.baywa.de, if Marys Poop make deal with them storage in Europe won’t be a problem. With many online shops in different European countries Marys Poop brand name would be noticed fast.
Flowers shops, especially who sells mainly flowers in pot would be main physical sales points. Marys Poop product could be distributed to many flower shops across U.S. In the beginning to promote and make customer hooked, the one poop pod with instructions could be given as a gift when customer buys pot flower, for example orchid.
Nurseries could be main B2B customers buying product in high quantities. It would generate constant income, when online channels could be focused more on promotion and small orders, although the main website maryspoop.com could be used in later stages for nurseries too, but in beginning nurseries should be contacted directly by salesman and given sample packs of product for testing.