From eco snail farm to eco snail brand - My plan (progress thread)

[Turboboost]

It's been a while since I have joined this forum and finally I've found a way how to change my life and build something to make myself wealthy and proud. I've already mentioned that I come from Slovenia. This is a small country which offers many possibilities only if one can see and grab them. One of them is eco farming. I have decided to take my chances (which are quite big if I'll play by the rules) of success in building up a eco snail farm.

There are about 10 so called snail farms in my country and only one of them is a semi-professional one (built on 2.5 acres of land but the owners are now planning to build additional farms). Last Friday me and my friend (also a co-investor in my business) were visiting this farm and had a long talk to the owners. They are willing to cooperate with us by giving us instructions how to start and maintain the farm and they would do it for free. It's strange nowadays that someone (a competitor!) helps you for free but they had a reason for this. I've asked them why would we sell eco snails to wholesalers when we could build a few more farms, make our own brand and sell our product directly to retailers or supermarket chains in Italy, France, UAE etc.. for a much higher price. They were excited about my idea so we decided to cooperate in future.

Now here are a few facts about the farm we plan to build:

Size: 5-7.5 acres (with possibility of expansion)
Investment: Rent for land 600-800eur/year; 35.000-40.000eur for equipment and snails for breeding
Expected yield: 20-30 tons/year after 2 years of running
Working hours on a farm per year: 800-900/person (divided by 2 because there will be 2 of us working here)
Additional farm costs per year: 1500eur (insurance included)


Our first yield would probably go to a wholesaler in Italy for a price of 6-7eur/kg. And if everything goes as planned, in 3-4 years we'll have our own brand ready and we expect to double (and if we're lucky even triple) our revenue by that.

Tomorrow I'm going to meet a man who is prepared to rent us the land we need and I'll try to sign a 20-year contract.
I will report the results.


Every question, comment, criticism or advice is welcome here.

 

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[skipper]

Our first yield would probably go to a wholesaler in Italy for a price of 6-7eur/kg

I see this probably as the weakest link here. Why would they buy from you? Why at that price?
In my humble opinion you need to test this by offering them to sign a letter of intention to buy from you after 1 year for 6E -10% entry discount per kg (does that include VAT or not?).

Also, without your own brand you will be competing on price, and the wholesaler will squeeze you as hard as he can. And he can, if he is between you and the buying customer.

 

[Turboboost]

I see this probably as the weakest link here. Why would they buy from you? Why at that price?
In my humble opinion you need to test this by offering them to sign a letter of intention to buy from you after 1 year for 6E -10% entry discount per kg (does that include VAT or not?).

Also, without your own brand you will be competing on price, and the wholesaler will squeeze you as hard as he can. And he can, if he is between you and the buying customer.

This "probably" was meant in case if we don't have our own brand yet. Well this is a market price which varies between 6-7eur (depends on the quality and demand) for eco bred snails. This wholesaler is the same company which sells the equipment for building eco snail farms and gives out certificates for eco farms. So if you make a product by their rules and have their certificate, they will buy it from you.

 

[skipper]

This wholesaler is the same company which sells the equipment for building eco snail farms and gives out certificates for eco farms. So if you make a product by their rules and have their certificate, they will buy it from you.

Just make sure that's written down in a contract.
How strong is this wholesaler in the market? What percent of the EU market does he supplies?

 

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[skipper]

I'm a bit puzzled how your media is propagating this success story S pol
while their financial data shows 4k (yes, 4.000) euro income, 17k loss and blocked bank accounts REJA

 

[Turboboost]

Just make sure that's written down in a contract.
How strong is this wholesaler in the market? What percent of the EU market does he supplies?

I've made a call to the guys owning that 2.5acre farm and asked them the same questions. In their contract there is a statement where this company buys all of the yield by the current market price but the seller (farm owner) is not obligated to sell them (in case they find another buyer etc...) anything. This means a farm owner can also sell his snails directly to restaurants or on local markets. I couldn't find any data how strong this wholesaler is on EU market but they are the biggest in Italy.

 

[skipper]

Analyse the market better and don't put all bets on a single customer (this wholesaler in your case). Have a scenario to sell your snails in case they go out of business or whatever. Research alternatives.

Also, research market price fluctuation. And research how many new snail farms are opening yearly. You don't want to experience something like the tulip bubble.

Srečno!

 

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[Turboboost]

I'm a bit puzzled how your media is propagating this success story S pol
while their financial data shows 4k (yes, 4.000) euro income, 17k loss and blocked bank accounts REJA

This guy comes into the part in my first post where I have written "so called" farms. There are also some people selling equipment and snails 2x more expensive than in Italy and they claim to be professionals but in fact they are just fakers. My plan is to go with the Italians and this only serious eco farm here.

 

[Dezzamondo]

You have a very interesting business concept there Turbo.

However, what will you be doing to differentiate yourself from all of the other suppliers that are already established in the European market? France & Italy should have some very good networks already setup, and a quick search looks like the game is going to be pretty tough.

Which wolesaler/distributor(s) have you chosen to approach (if any yet)?

I hope it works out for you!

 

[Turboboost]

You have a very interesting business concept there Turbo.

However, what will you be doing to differentiate yourself from all of the other suppliers that are already established in the European market? France & Italy should have some very good networks already setup, and a quick search looks like the game is going to be pretty tough.

Which wolesaler/distributor(s) have you chosen to approach (if any yet)?

I hope it works out for you!

Hi there Dezzamondo!

The reason why the french or italian buyers would choose us will be 100% organic (lab controlled water and soil, organic seeds for food production) product which is a bit harder to get today. I've read complains about snails coming from Bulgaria for example. Their way of breeding the snails is far from organic (they are feeding the snails with cheap dog food and breed them on a contaminated soil...) and my philosophy is if you pay lots of money for a few snails on a plate, you deserve top quality. Our prices will be higher and our quantities smaller. But there will always be a market for premium quality. The other farm (our future partner) I've mentioned in my first post, sells 100% of their production to Italy.

Our wholesale partner is going to be Euro-Helix s.r.l. in Italy. They also own their own institute for snail research and we'll buy all we need for a start up from them. But like I mentioned, we are heading towards our own brand with our partners. We hope we'll reach the quantities for our brand in a few years but this is our long-term goal. First we have to build our first farm .

 

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[PatrickP]

I've made a call to the guys owning that 2.5acre farm and asked them the same questions. In their contract there is a statement where this company buys all of the yield by the current market price but the seller (farm owner) is not obligated to sell them (in case they find another buyer etc...) anything. This means a farm owner can also sell his snails directly to restaurants or on local markets. I couldn't find any data how strong this wholesaler is on EU market but they are the biggest in Italy.

I am not giving legal advice to you because I did not stay at a Holiday Inn Express last night(USA joke, may not translate well to your country )

BUT I would check with an atty. I would think that an agreement like that is not a contract as they are promising something but you are not.

As I say you may want to check it out.

Best of Luck man!

 

[Turboboost]

I am not giving legal advice to you because I did not stay at a Holiday Inn Express last night(USA joke, may not translate well to your country )

BUT I would check with an atty. I would think that an agreement like that is not a contract as they are promising something but you are not.

As I say you may want to check it out.

Best of Luck man!

I'll check it 100% with an attorney before I make some quick moves and regret it later. But somehow it's quite logical to me. By buying 40.000EUR worth equipment and support from them you automatically become their possible supplier of top quality products. So actually this way they are ensured to get best products by their standards. I don't think such a company would mess around and risk their reputation for 40k eur. But you're right...it's better to be careful now than sorry later.

 

[PatrickP]

Sorry I wasn't more clear. I meant that you are promising them nothing but they are promising to buy your crop unless you don't want to sell it to them.

I did NOT know that you had to buy 40K worth of equipment from them. To me that screams SCAM!

Will they sign a contract to buy from you even if you buy your equipment from someone else? If not I would run in the opposite direction from them.

 

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[Turboboost]

Sorry I wasn't more clear. I meant that you are promising them nothing but they are promising to buy your crop unless you don't want to sell it to them.

I did NOT know that you had to buy 40K worth of equipment from them. To me that screams SCAM!

Will they sign a contract to buy from you even if you buy your equipment from someone else? If not I would run in the opposite direction from them.

It's not scam. I've written before there is a existing farm here and they already sell the snails back to the company who is selling the equipment. This weekend the owners of that farm were on a visit in this company in Italy to see how the processing of the snails works and stuff. They ARE a serious company. The name of the company is Euro-Helix s.r.l. and they exist since 1973.

 

[PatrickP]

It's not scam. I've written before there is a existing farm here and they already sell the snails back to the company who is selling the equipment. This weekend the owners of that farm were on a visit in this company in Italy to see how the processing of the snails works and stuff. They ARE a serious company. The name of the company is Euro-Helix s.r.l. and they exist since 1973.

Will they sign a contract to buy from you even if you buy your equipment from someone else?

 

[Turboboost]

Will they sign a contract to buy from you even if you buy your equipment from someone else?

I'm sorry I forgot to answer you on that one. I don't know if they sign a contract but if your product passes their quality tests I don't see a reason why they wouldn't buy it. I'll have to ask them that. But another fact is that they are the cheapest equipment sellers around and they offer you full support anytime so I don't really see the reason why I wouldn't buy from them. A few "businessmen" in my country are selling the same equipment for double the price. Like I said, there is a farm which runs great and cooperates with them.

 

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[miked_d]

I did NOT know that you had to buy 40K worth of equipment from them. To me that screams SCAM!

I was thinking something similar. Must you buy all of your equipment from them? Can you buy elsewhere and still be certified as eco?

It seams that a lot depends on this ONE company. Any changes at that ONE company could ruin your business.

 

[Turboboost]

I was thinking something similar. Must you buy all of your equipment from them? Can you buy elsewhere and still be certified as eco?

It seams that a lot depends on this ONE company. Any changes at that ONE company could ruin your business.

Well it's not only the equipment that makes a snail breeding eco. It's the environment (soil, water, air...) where we are going to build our first farm. I don't see any dependance here. Like I said before, we are not obligated to sell them anything and if they sell the equipment for the lowest prices possible, we will buy it from them. Once again, they are the biggest snail processing company in Italy.

 

[PatrickP]

I would contact ALL the other snail processing companies in Italy and France.

Ask them exactly how much they pay, how likely they are to buy from you etc.

I would then do the same with the restaurants in Italy and France.

I would also contact all the 'brand name' snail producers and ask for as much info as you can. I never knew that branding your snails was that easy or that processors/restaurants paid that much attention to it.

 

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[Turboboost]

I would contact ALL the other snail processing companies in Italy and France.

Ask them exactly how much they pay, how likely they are to buy from you etc.

I would then do the same with the restaurants in Italy and France.

I would also contact all the 'brand name' snail producers and ask for as much info as you can. I never knew that branding your snails was that easy or that processors/restaurants paid that much attention to it.

Of course we'll look for other possible buyers. At the beginning we'll try to sell as much as we can on local market (which isn't very big but still...) just to get higher prices. Retail price for snails can currently reach around 20eur/kg here. The more we earn from our first yields, the more new acres of land we could turn into farms and get closer to our brand. By branding your product, you actually become a snail processor. You can double your prices and deliver the product directly to retail shops. Exactly what this (and many others) italian company is doing.

 

[Turboboost]

Progress update:

Yesterday me and my partner had a meeting with a guy who works for the government (department for agriculture) and he explained us if we are serious about these snails, we could get EU agriculture subventions up to 70% of our investment (this actually means we would get max. 28k eur back from the EU). He gave us some contacts to people who are doing these things and we will see...

 

[Turboboost]

Today I just have to report something interesting to those who like to observe people and how some of them think. I went to 3 different land owners and presented them my plans and offered them quite a generous amount of money for the land they don't use. All I got from this was 3 times NO. It was interesting because they were all listening to me until I mentioned the snails. How stupid can people be? They have acres and acres of land but they would not rent it to you because they know you will make largest possible profit out of it. But I am not giving up, I am going to find a piece of land and make a fortune out of it!

 

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[skipper]

All I got from this was 3 times NO. It was interesting because they were all listening to me until I mentioned the snails.

He he he... I know what you are talking about. "We've had potatoes here for generations, I don't want no freaking snails!".

How stupid can people be?

Butale ;-)

How about telling them you'll grow potatoes... only to change plans later on....

 

[Turboboost]

How about telling them you'll grow potatoes... only to change plans later on....

I'm going to tell them about growing organic lettuce and things like that. This won't be a lie because I'm really going to grow it. I just won't mention that I'm going to feed the snails with this lettuce . The main problem with people here is that they hate you for your success. This is also one of the reasons why people are leaving this country...

 

[Turboboost]

Progress report:

Yesterday I had a meeting with a local farmer who is old and has problems with his heart and is not capable of running his whole farm anymore. He might be interested in renting a piece of his land (up to 8 acres with possibility to rent even more in future). Today I'm going to talk with a lawyer about how to make the best contract for us and next week I have an appointment with some government people to discuss my status (as a non-farmer it is difficult to rent fertile farming land but there are some ways to get a special status) as a non-farmer. They also told me on the phone that this would be the greatest project of it's kind ever in this region. So I'm very optimistic and look forward to start my farm in spring 2013. I will also take some photos when we'll be building it up.

 

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[skipper]

It might be cheaper to buy land on the long run. But as we know in our homeland you need a farmer status to actually buy land.
As far as I've heard you can go through training and get certificated at Biotehniški Center Naklo.

 

[Turboboost]

It might be cheaper to buy land on the long run. But as we know in our homeland you need a farmer status to actually buy land.
As far as I've heard you can go through training and get certificated at Biotehniški Center Naklo.

I've been thinking about this "education" too but first I'll check if there is a way to get around this. About buying the land...it might be better to buy it but not near our capital. We're thinking of a 20year contract with a basic rent 1000eur/year for 8 acres. There is no land that cheap near my area. It has to be near because I want to avoid fuel costs and time loss as much as possible. And I could go there and check my snails whenever I would want to (the land I want to rent is 10 minutes of walking away). First 18-24 months I'll have to stick with my regular job to make my living and paying back my loan so I can't move to the border with Hungary for example where land is very cheap.

 

[skipper]

We're thinking of a 20year contract with a basic rent 1000eur/year for 8 acres. There is no land that cheap near my area.

Ah, our upside down real-estate market... That's why I rent the apartment as well. Way cheaper than buying at the moment.

 

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[Turboboost]

Ah, our upside down real-estate market... That's why I rent the apartment as well. Way cheaper than buying at the moment.

Yeah it's better. I've found a guy who is selling cca 8 acres of farm land near my area and wants 90.000eur for it

 

[PatrickP]

That seems really high no?

FL you can get 5 acres and a GREAT house for $175,000 what is that in Euros 110K


Upstate NY you can get 8 acres for $6,000