Assessment of honey processing as a sustainable entrepreneurial venture in southwest Nigeria

Background and Objectives: More research must be conducted on the operational efficiency and performance of honey processors in the southwest region of Nigeria. Hence, the study aims to fill this gap by shedding light on the socioeconomic characteristics, costs, returns, and challenges faced by honey processors in the area. This investigation is crucial for developing effective strategies to enhance the overall performance of the honey industry in the region.Methodology: Primary data from 144 randomly selected respondents representing 10% of the honey processors population were collected and analyzed using descriptive statistics, budgetary techniques, the stochastic frontier model, and the relative importance index. These methodologies allowed for a comprehensive assessment of the honey processing industry’s operational aspects, economic viability, and efficiency.Main Results: The research findings indicate that the majority of honey processing businesses in the region are operated by married male respondents who are literate and energetic with requisite honey processing experience. Though the enterprise is profitable with a gross margin of ₦233,058.52 and a profit of ₦208,574.77, the majority (62.5%) of the honey processors still operate at a local small-scale level. The average technical efficiency is 0.92, while the average economic efficiency is 0.55. Capital turnover analysis reveals approximately ₦1.81k is generated for every ₦1 invested in the honey processing business. Several key challenges were identified, including issues with electricity supply, limited access to capital and modern technology, and high materials and labor costs.Conclusions: The honey processing business is very lucrative in the study area, considering the high value of 80.95% return on investment (ROI) on the business. The study recommends encouraging honey processors to operate beyond their present stage 1 under production level on their return to scale (RTS) by increasing significant variables positively affecting technical and allocative efficiencies to enhance output and income.