Propolis Production: A Potential Boon for the Australian Beekeeping Industry

07.06.19

Australian beekeepers could earn an extra $1,400 a year by incorporating propolis production into their annual honey harvest, according to a new report commissioned by AgriFutures Australia.

Propolis is a resinous mixture that honeybees produce from saliva, beeswax and the exude of tree buds, sap flows and other botanical sources. While considered a by-product of bees, its powerful medicinal properties have been increasingly recognised in recent years.

Report author and principal consultant, Michael Clarke, from AgEconPlus investigated the status of propolis production in Australia and New Zealand. He worked closely with commercial beekeepers to prove that profitable harvesting of propolis in Australia was possible.

In his report, Mr Clarke looks to New Zealand as a valuable model for which to create a thriving propolis industry in Australia. He also highlights the growing interest from companies in sourcing Australian produced propolis and a pathway for Australian beekeepers to enter the market.

About propolis

Propolis is a resinous mixture used by honey bees as both a sterilising agent and a sealant for unwanted open spaces in a hive. It can be harvested by scraping hive components such as supers and frames; however, the most effective method is when a plastic mat is inserted above the hive’s top super and underneath the lid.

Raw propolis sourced directly from the hive can be further refined and concentrated into smaller volumes, thereby increasing any medicinal benefits. Refinement is not difficult, but is usually part of an established manufacturing process that requires scale, appropriate equipment and technical knowledge.

Refined propolis is made into a range of consumer products, such as tablets, tinctures, lozenges, toothpaste and soap. While the medicinal qualities of propolis are well researched, new studies have shown the substance to be an effective antimicrobial that may be useful in the treatment of skin cancers.

Status of propolis production in New Zealand

New Zealand has a lucrative and expanding propolis industry with the majority sourced from poplar, willow and birch trees. The nation produces around 30 tonnes of raw propolis every year and has two key propolis processors.
Raw propolis supply has proven beneficial for New Zealand beekeepers, even for those with small apiaries. On average, a New Zealand hive produces 220 grams of raw propolis every year and beekeepers receive between $NZ54 and $NZ197/kg for this product.

Propolis harvest is becoming increasingly popular for New Zealand beekeepers, given that:

• Production can be incorporated with existing activities and completed during honey harvest
• There is no loss of honey or pollination fee income from the addition of propolis mats
• Limited labour is required, especially if unscraped mats are supplied to the processor
• Capital outlay is limited, mats may be provided by the processor and can be stored in cool room/freezer
• Processors pay on recovered yield and will purchase raw propolis with as little as 15% pure propolis
• High prices are achieved for raw propolis with an upward trend in price of the product.

Status of propolis production in Australia

There is only a handful of beekeepers that currently harvest propolis in Australia. The actual propolis yield in Australia varies and depends on location and hive specifics. That said, a number of its regions have high production levels similar to that of colder countries like New Zealand.

More research on the chemistry of Australian propolis needs to be undertaken, but early studies show that it may have additional unique and potentially useful properties. While there has been an absence of consistent buyers, the tide is starting to turn with businesses looking to join the supply chain.

Market opportunities for Australian produced propolis

The market opportunity for propolis production in Australia, which includes re-export of consumer products to Asia, is expected to grow 10% per annum to 2020. Australia imports up to 80 tonnes of pure propolis every year, which could be partially offset by future propolis production in Australia.
To realise this opportunity beekeepers might partner with one of several companies with an interest in raw Australian propolis, including:
• Honey packers
• An established processor looking for additional supply
• A New Zealand processor exploring opportunities to set up in Australia
• A buyer of imported pure propolis
The full report provides a list of current and potential buyers of raw propolis from Australian beekeepers.
For the Australian industry to be profitable, it will need to achieve price premiums of between 200% and 300%. The report suggests that if the product is well marketed and builds on Australia’s clean, green image, these large premiums can be achieved.

Benefits for Australian beekeepers

Propolis harvest is moderately profitable and especially useful for smaller operators, who can incorporate the process into their usual honey bee harvest at particular times of the year.

Using best estimate assumptions, raw propolis production in a 100-hive enterprise can add $900 a year to net revenue if external labour is used and $1,400 a year if the owner’s labour is used.

Additionally, Australian beekeepers will see greater outcomes should the processor provide a New Zealand style mat pick up and extraction service.

Next steps for beekeepers with an interest in propolis production

For beekeepers interested in propolis production, the report recommends Australian beekeepers to:

  • Buy a small number of mats and trial them for at least a year
  • Weigh propolis recovered from mats and the scraping method separately – some potential buyers have indicated that they are only interested in propolis recovered from mats.
  • Keep a record of the time required to crack mats and scrape hive material to decide on level of labour needed for your business.
  • Follow up with potential buyers, such as major honey packers, propolis importers, processors and consumer product manufacturers, to determine willingness to purchase, standards etc.
  • Rework guide budgets provided in the report to determine whether propolis harvest is economically viable for the business.

The full report ‘Market and Production Potential for Australian Produced Propolis’ has been funded by AgriFuturesTM Honey Bee &   Pollination Program. It can be accessed at https://www.agrifutures.com.au/product/australian-propolis-market-and-production-potential/

For more information about AgriFuturesTM Honey Bee & Pollination Program visit agrifutures.com.au/honey-bee-pollination