Online campaign helps Duluth couple raise money for their honey businessWhen Jon and Erin Otis decided they wanted to expand their modest beekeeping operation in Duluth, they did what any savvy entrepreneur should do: They put together a detailed business plan. But they didn’t take that plan to a bank in search of conventional financing for more hives. They took their vision to the people.
By: Peter Passi , Duluth News Tribune
When Jon and Erin Otis decided they wanted to expand their modest beekeeping operation in Duluth, they did what any savvy entrepreneur should do: They put together a detailed business plan.
But they didn’t take that plan to a bank in search of conventional financing for more hives. They took their vision to the people.
The Otises launched a campaign on Kickstarter.com, a website that connects creative dreamers with capital. Kickstarter provides a platform for people to pitch a project and seek backing from online supporters. Fund seekers each set a goal, and if it is reached, they commit to make their proposed ideas reality. If their fundraising efforts fall short, they receive no help whatsoever.
Backers don’t gain any equity in the projects they support but may receive incentives — in the Otises’ case, jars of honey among other gifts — at varying levels of financial support.
The couple tends 10 beehives in three locations: at their home in Duluth’s Woodland neighborhood, at the University of Minnesota Duluth’s apple orchard and on another site in Rice Lake Township. With the help of $6,000 from Kickstarter, they aim to expand their operation to 25 hives.
The Otises gave themselves until Dec. 1 to reach their Kickstarter goal, and on Wednesday, they went over the top. As of Sunday, 116 backers had pledged more than $7,300 to the apiary project.
If the Otises can reach the $10,000 mark, they will add even more hives and have pledged to make education part of their mission, perhaps purchasing a hive with a glass wall that allows visitors to glimpse inside a working bee colony.
Jon Otis said he was surprised to see backers emerge from near and far, including supporters from Norway, Italy, Spain, New York, Florida and
“The power of all those people contributing adds up and makes our project stronger,” he said. “With that many backers behind us, it pushes us to work even harder to make this happen.”
The Otises aim to establish at least three more apiaries in different parts of Duluth.
“There are so many different flavors from neighborhood to neighborhood, depending on the bees’ forage at that particular place and time,” Jon Otis said.
Even in the same location, hives produce different types of honey in different seasons. Otis pointed to the contrast between honey harvested from his Woodland hives in August and October. The August honey has a pale yellow hue and delivers strong floral notes on the tongue. The October honey has a dark amber glow, and Otis describes it as possessing a malty
quality with hints of sour cherry.
The Otises market and sell their product under their own Lake Superior Honey Co. label. Each jar is annotated with the date that the honey was extracted from the comb and the location of the hive that produced it.
“We believe that honey has a terroir, or taste of place, just like a fine wine,” he said.
Otis said he wants Duluthians to discover the unique qualities of honey produced in their own neighborhoods, so “they can now be proud of what their neighborhood tastes like, and they can share that with people all over the region and ultimately the U.S. and the rest of the world.”
Until this year, beekeeping in Duluth was allowed only on property zoned “rural-residential” or “rural-conservation.” But a new ordinance passed last month makes it legal for people to license and tend hives throughout
Duluth’s residential neighborhoods.
“The ordinance really opened up Duluth for us. It allowed us to take our vision of producing neighborhood honey and run with it,” Otis said.
Duluth City Councilor Emily Larson said she was pleased to learn of Otis’ plans to expand his local beekeeping operations and said she hopes to see more hives established. She even made a pledge of support on Kickstarter.
Lake Superior Honey isn’t your typical grocery store honey. Otis said what sets his product apart is his commitment to refrain from using chemicals on his hives, and his practice of packaging honey in a raw state.
Otis said mass-produced honey is intermixed, filtered and heated to a point where any natural yeasts are killed to lengthen its shelf life.
“Commercial processing changes the color, the flavor and profile of honey. It also kills off anything that’s beneficial for people with allergies,” he said.
In contrast, Otis said he filters his honey and leaves it to settle before putting it in jars.
“It’s as true of a honey as you can get from a hive,” he said.
Larson described being wowed by the flavor of Lake Superior Honey, compared with regular commercial brand honey.
“It’s like honey times 10,” she said.
Otis said people have been willing to pay a premium for his honey, with a 10-ounce jar selling for $15. Most of his sales have been direct to consumers, but he recently has begun to sell a bit through a local retailer, the Duluth Kitchen Co.
Lake Superior Honey Co. aims to produce an artisanal product, not a commodity, Otis said.
“One bee works its whole life to produce one-twelfth of a teaspoon of honey. To put it on a shelf in a plastic honey bear is a slap in the face. We work to elevate honey and give it the respect it deserves,” he said.
The Otises hold down regular day jobs in addition to running their honey business. Jon works as a Duluth firefighter, and Erin works as an office manager at Denny’s Ace Hardware. Jon said he sees Lake Superior Honey Co. as more than a business venture.
“It’s bigger than selling a jar of honey here and there. It really is for us about community and about food stabilization and sustainability and leaving the world a better place than how we found it,” he said.
Creating the campaign
When it came time to orchestrate his Kickstarter campaign, Otis enlisted the help of David Sadowski, a friend who also works at a Duluth marketing firm called Swim Creative. Sadowski and his team put together a video featuring the Otises, their honeybee operation and their vision.
“Jon’s passion is what we really wanted to get across to people,” Sadowski said. “The Otises want to make this project a community thing.”
About 50 percent of Kickstarter campaigns with videos achieve their fundraising goals — much better than the 30 percent success rate for those projects lacking a video.
Overall, about 44 percent of Kickstarter campaigns receive funding. Kickstarter receives a 5 percent commission for all those that do.
Since the online fundraising site was launched in April 2009, more than 2.5 million people have pledged in excess of $350 million to support 30,000-plus creative projects.
Of course, most don’t make the cut.
David Glenn of Two Harbors managed to raise just about one-third of the $7,225 he sought to expand his mushroom-growing operation in 2011.
Even though he didn’t reach his goal, Glenn still considers Kickstarter a potentially valuable tool for small businesses.
“It’s basically using the Internet to suck money out of your friends,” he said, adding that his circle of friends was not large enough.
Sadowski said Otis’ campaign marks his firm’s first experience with Kickstarter, but he doubts it will be the last.
“Kickstarter can give little businesses the spark they need to grow,” he said.