4345:
A Competitive Market Analysis of the US Elderberry Industry
4345:
A Competitive Market Analysis of the US Elderberry Industry
Monday, August 2, 2010: 4:00 PM
Springs K & L
Elderberry is a perennial shrub native to North America with a variety of uses and benefits. Elderberry is especially popular for its antiviral properties and recommended for the treatment of influenza. The fruit is used to make concentrate, jams, jellies, syrups and wines. Demand for elderberry fruit and flowers are increasing from winemakers, jelly processors and nutraceutical companies.
In contrast to Europe, elderberry is not well known or widely utilized in the U.S. Up-to-date information is lacking with regard to the elderberry market. This research identifies the current status and future trends in the elderberry industry, elderberry market limitations, along with potential opportunities for elderberry producers and processors.
A combination of quantitative (mail survey) and qualitative (phone interview) methods have been used. The theoretical model used for the survey and interview development and analysis is based on the Porter Five Forces Model (PFFM) which describes the competitive forces that coordinate and control the market. The PFFM has been used previously to shed light on the chestnut and shiitake mushroom specialty crop markets.
Elderberry market participants throughout the U.S. were identified using information from the Internet (e.g., keyword searches for businesses involved in all aspects of elderberry production, university websites that offered links to sources of specialty products) and a database was created. Based on 74 mail surveys analyzed (47% response rate), 51 (69%) respondents gross under $10,000 in elderberry sales while 7 (9.5%) gross over $100,000. Fresh or frozen elderberries are sold together with a variety of value added products including wine, juice, concentrate, jelly, syrup, extract and supplements. Eighty-one percent sell directly to consumers. Forty-six percent sell their products locally, 25% regionally and 29% nationally. Fifty four percent of respondents indicated demand has increased over the past five years, 71% indicated that current demand is steady or strong and 59% stated that demand will increase in the next five years.
Twenty four follow up phone interviews provided in depth information about the challenges, opportunities and competitive forces in the elderberry industry. Challenges include a limited domestic supply of fruit, few regionally adapted varieties suitable for commercial production, and high labor costs. Additionally, the lack of affordable mechanical harvesting equipment limits future production potential and industry growth. Respondents identified low levels of competition within the industry at the present time.
Based on identified market size and demand, opportunities exist to increase the domestic elderberry industry across the value chain.
In contrast to Europe, elderberry is not well known or widely utilized in the U.S. Up-to-date information is lacking with regard to the elderberry market. This research identifies the current status and future trends in the elderberry industry, elderberry market limitations, along with potential opportunities for elderberry producers and processors.
A combination of quantitative (mail survey) and qualitative (phone interview) methods have been used. The theoretical model used for the survey and interview development and analysis is based on the Porter Five Forces Model (PFFM) which describes the competitive forces that coordinate and control the market. The PFFM has been used previously to shed light on the chestnut and shiitake mushroom specialty crop markets.
Elderberry market participants throughout the U.S. were identified using information from the Internet (e.g., keyword searches for businesses involved in all aspects of elderberry production, university websites that offered links to sources of specialty products) and a database was created. Based on 74 mail surveys analyzed (47% response rate), 51 (69%) respondents gross under $10,000 in elderberry sales while 7 (9.5%) gross over $100,000. Fresh or frozen elderberries are sold together with a variety of value added products including wine, juice, concentrate, jelly, syrup, extract and supplements. Eighty-one percent sell directly to consumers. Forty-six percent sell their products locally, 25% regionally and 29% nationally. Fifty four percent of respondents indicated demand has increased over the past five years, 71% indicated that current demand is steady or strong and 59% stated that demand will increase in the next five years.
Twenty four follow up phone interviews provided in depth information about the challenges, opportunities and competitive forces in the elderberry industry. Challenges include a limited domestic supply of fruit, few regionally adapted varieties suitable for commercial production, and high labor costs. Additionally, the lack of affordable mechanical harvesting equipment limits future production potential and industry growth. Respondents identified low levels of competition within the industry at the present time.
Based on identified market size and demand, opportunities exist to increase the domestic elderberry industry across the value chain.