“I’m a bee pimp,” he said, smiling at me.
“A what?” I asked.
“I’m an apiculturist – a bee keeper. I rent out my bees for profit,” he answered.
I looked back at him, while stuffing my face with a slice of a princess birthday cake. I understood the words coming out of his mouth, but I didn’t understand how it all worked. How could this bee keeper be so wealthy?
Parent’s Stealth Wealth
If you had asked me ten years ago about the best networking events, a kid’s birthday party wouldn’t have been on my list. Now, with my two young kids in school, I’ve found that meeting fellow parents has been a surprisingly great experience. It’s as if there is some kind of unspoken mutual understanding.
Yes, there are some crazy Karens and obnoxious Chads out there – that’s consistent across all parent circles internationally.
But most parents are really cool. It takes a certain type of person to manage time correctly, keep discipline, and practice incredible amounts of patience. It just so happens that those skills are great in finance as well.
I’ve been fortunate to meet some of these parents in my local neighborhood over the past several years. I’ve even talked about one these families recently (they executed perhaps that best oil royalty deal of the 21st century).
This past weekend I learned about another business and investing venture from a fellow parent that really blew my mind…
The Need for Bees
Everyone knows the importance of honey bees for pollination. Globally, at least 1/3 of food is dependent on bees spreading pollen from one plant to another, which is valued at over $500 billion, annually.
We also know that bee populations have been on the decline. Since 2006, beekeepers have lost about 30 percent of their colonies every year. This is an alarming trend that has resulted in the FDA, USDA, and UN issuing warnings. The UN even announced May 20th as “World Bee Day” as a way to raise awareness to the value of bees.
The Bee Pimp
Back to last week’s birthday party, where I was talking to a fellow dad, aka, ‘The Bee Pimp’…
I’m not exactly sure how we got on the topic, but he told me the whole story of how he passively makes money from his beekeeping operation. I can’t say how much he’s making… but it’s approaching f-you type of money.
To be clear, he doesn’t actually do any beekeeping. He has teams of people that do the manual labor. He has just figured out the structure to make it all happen. He mentioned that he works a couple hours a day from his home office and visits the bee farm about once a week to check in on things.
I’m going to explain how it all works, but first I need to tell you about the actual business demand for bees.
California Almonds Need Bees
Incredibly, California is responsible for over 80% of the world’s almond supply, which is valued at over $10 billion. Even more incredible is that about 75% of this almond production is made possible from industry funded pollination projects. As in, imported bees.
The Bee Pimp told me that some almond farms in California, which are also his clients, claim to have a 10 fold increase in production when properly pollinated (compared to years with low pollination).
This has resulted in enormous bee demand from California almond growers who now use over 30 billion imported bees per year.
Florida Bees Love to Travel
As most of you know, I live in the Palm Beach area of Florida, which is where The Bee Pimp lives too. Just north us is a massive agricultural area that is essentially uninhabited and perfect to raise bee colonies. In fact, Florida is rated one of the top US states for beekeeping.
Further north, in the Gainesville area, there are even more beekeepers that export their colonies for pollination. Florida now exports BILLIONS of bees every year to multiple states for pollination of almonds, watermelons, blueberries, and citrus groves.
Hundreds of bee colonies can be loaded onto a single truck, which then has a net wrapped around the entire load. The trucks typically travel at night to ensure the bees don’t get overheated and are healthy upon arrival on the other side of the country. A single truck can transport more than 10,000,000 bees!
Transporting bees across the US has become so important that the Federal Government made an exemption for commercial truck drivers. This exemption allows them to continuously drive, without required 30 minutes breaks, in order to keep bees alive during transport.
The Bee Pimp Business
Although this bee business may sound simple, wait until you hear how The Bee Pimp runs his operations…
Before he even starts his bee operations in Florida, he secures multi-year contracts in California (and other states). This ensures that he has a known amount of clients to do business with, over a known amount of time. Once these contracts are finalized, he then secures land.
Instead of purchasing farm land to put bee boxes on (that house the colonies), he just leases large parcels of land. Strategically, he structures these lease terms to match up to his pollination contracts. So, if he has a five year contract with an almond farm in California, he’ll lease enough land in Florida for five years to supply that one contract. He repeats this process at scale to ensure he’s never leasing more land than he needs.
What’s even more interesting is that the land owners that he secures leases with love doing business with The Bee Pimp. That’s because the land doesn’t get torn up by traditional farming equipment and, most importantly, the entire operation gets significant agricultural tax credits that get passed on to the land owner.
The Bee Pimp told me that the land owners essentially make pure profit from his lease contracts, as the tax credits nearly eliminate all property and income taxes. (I’m not a tax expert, so I’m just taking his word for that!)
But, wait, there’s more!
The Bee Stack
In the technology world there is a term known as “tech stack,” which involves ‘stacking’ multiple already built software programs. Building a tech stack can be relatively easy, because all you have to do is connect software to each other (instead of actually building and engineering that software). This enables a company or user to make custom systems involving multiple different software processes.
The Bee Pimp has essentially built a business of stacking already existing operations, which results in very little time consumption from him (after the initial setup).
The most complicated part of this entire operation is the actual manual and logistical labor that it takes to actually raise bees – and he outsources all of that.
Instead of hiring bee keepers, managing trucks, and dealing with daily bee hive operations, he just hires third party contractors. The end result looks something like this:
Agricultural land leases
Transportation and logistics subcontractors
Highly profitable, tax friendly, recession resistant, scalable, and low risk business
How to Start a Bee Stack Business
Just like most businesses in the agriculture industry, relationships are the most important. Without some time on the ground, lots of hand shaking, and lunch dates at the local diner, you’re probably going to have a tough time cracking into this industry.
But for someone who is willing to put in the initial work? Well, there are some serious opportunities here.
Considering that well over $3 billion worth of pollination services are used each year in the United States, there are plenty of ways to get involved. To get started, here are some quick stats:
- Each truck can transport 400-450 bee boxes
- 25,000 bees can live in each box
- A single box (hive) can rent for more than $225
- An acre of land in Florida can be leased for $50-$100 per month
- Each acre can host ~10 hives
There are, obviously, many variables here. But with bee populations on the decline and food needs increasing, there is a clear trend here. Bee pollination contractors are literally an integral part of society’s food needs.
I wouldn’t be surprised if a government eventually provides contracts to bee pollinators in order to provide food security to a nation. Talk about job security!
Maybe we should put some bees on our Rural Cult?