Paddock raised chickens supplying healthier, speciality grade eggs with an innovative business model

Upcoming Mrs Clucks Farms and Foods Pty Ltd

Investment Highlights

  • Eggs produced by hens roaming and grazing naturally in low densities on open pasture are more ethically farmed and healthier (Higher Vitamins and Omega 3s and lower in cholesterol.)
  • Mrs Clucks’ low-density grazing and new business model for production involves fewer risks than eggs produced conventionally
  • Scalable egg production and business model with low capital requirements,  is better for the environment, better for the hens and delivers better quality for consumer health
  • Growing niche for sustainably farmed premium quality eggs with national egg production of 518m dozen eggs valued at A$828.2m in 2019. Recent supply has declined following drought and destruction of large hen flocks due to disease
  • Eggs are the most efficient source of protein by way of weight feed input to output of protein, and egg consumption per capita in Australia is 247.1 eggs pa and growing
  • Demand for protein from sources that are sustainably farmed and where animals are treated well, with speciality eggs such as pasture, nomadic or paddock eggs commanding a higher price, yet representing only 2% of the existing supply: cage 40%, free-range 47%, barn-laid 11%
  • Awareness about pasture egg production is increasing but most producers are small and find it difficult to guarantee constancy of supply
  • Mrs Clucks Farms ‘paddock raised chickens’ are producing eggs in the Fleurieu Peninsula Region of South Australia (Producer Number SA170) and flocks are expanding there and in Queensland’s Stanthorpe region. The SA flock produced a rate triple yolk egg last month (1:25m)
  • Funds focussed on growing production, expanding hen numbers under management and working capital to drive sustained supply of fresh eggs
  • Collaborative and profitable business provides returns to investors and improves the environment
  • Share dividends expected to commence Year 2 and a share dividend policy will be formalised by the Board at that time, to comprise a mix of retained funds for growth and share returns to Shareholders.

The Problem

The egg industry has problems in several areas – costly regulatory processes, large retailer policies, farmer operational risks and financial pressures to continue to meet increasing consumer demand:

  • Egg consumption is increasing and with hens laying 1 egg/day, increased production can only come from increased flocks numbers.
  • Commercial flocks have experienced significant disease and drought problems over past 18 months resulting in decline in flock numbers.
  • Social demands for the removal of cage eggs (target to achieve 2023-25) and improvement in hen living conditions.
  • Consumer demand for quality produce is increasing, as is the demand for local and ethical, natural and organic.
  • Flock numbers can’t be switched on instantly.
  • Capital investment is intensive in a commercial egg farm over and above operational costs (enough land + sheds + biosecurity costs + environmental and cleaning and disposal of manure costs + hens + feed)

There is a gap in the market for a genuine alternative agri-business structure that supports farmers, minimises fixed capital costs with production of a high-quality product and ensuring consistent and sustainable supply in the consumer market.

The Opportunity

The egg industry has seen a “perfect storm” in the first half of 2020. 2019 saw large scale drought, devastating bushfires, salmonella infections resulting in destruction of flocks and early 2020 saw supply chains disrupted as well as widespread further flock destruction from bird-flu infections in Victoria. Many farmers have struggled to stay afloat while chicken hatcheries and nurseries are adjusting to keep up with demand for pullets.

Australians need good sources of protein and traditionally, Australia is seen as a “clean” food bowl where specialty and high-end/premium producers have found a strong niche. While many vertically integrated and sustainable farming approaches have become established in the agriculture sector, the traditional method of egg farming remains reliant on high land and capital costs. This presents a significant opportunity for Mrs Clucks Farms and Foods to provide an alternate business model to grow flocks under management by controlling capital outlays and focus on operational practices to avoid the standard risks and pitfalls of the poultry and egg sector.

Introducing Mrs Clucks Farms and Foods

Our paddock raised chickens have total freedom of movement using our Coop e cabana chicken campervans for roosting and laying, and individual flocks are moved 2x a week imitating a nomadic lifestyle.

Our happy hens are able to express all their natural instincts such as scratching, digging and dust bathing. Regular change in farm pasture exposes them to a broader range of natural foods which increases the nutritional value of their eggs.

Roaming with grazing rotation across different paddocks, recycles nutrients more effectively, helps farmers and is much better for the environment. Grazing on insects and other pests provides natural pest control which means it is doubly good for the environment and for us. This rotation grazing method involves no large volumes of waste as with intensive chicken farming and is much healthier for our hens. Refer the ABC Landline segment on Pasture Eggs.

Our exclusive Chicken Campervans (Trademarked Coop e cabana) are 100% Australian designed and made and sold to equipment investors on a fixed period lease-back arrangement. This is core to our business model which shares the cost of infrastructure and provides investor returns on equipment similar to fixed property rents. This means that Mrs Clucks doesn’t include land and shed infrastructure on our balance sheet at a high fixed asset and capital cost.

The campervans also provide operational efficiencies so that as a business, we can focus on our hens, biosecurity, sustainably farming methods, and marketing our premium eggs to ensure a strong bottom line and provide investor returns at all levels.

Key Components

Breaking the existing industry model of farming finance, Mrs Clucks has developed a new business model in an alternate approach that diversifies infrastructure investment plus shares revenue streams with farmers and equipment investors.

Our business operations focus totally on expanding flock size and quality and risk management in

  • animal husbandry,
  • biosecurity management
  • egg collection, screening and grading, and
  • marketing and distribution.

With a focus on training, health and hygiene, and awareness education around improved health benefits from nomadic chicken eggs, the Mrs Clucks’ business model delivers immediate recurring revenues from egg sales, and growing profits in March 2021 from operations once target flock numbers of 10,000 in each of SA and Queensland are reached.

Mrs Clucks and Foods Pty Ltd will be undertaking an equity crowdfunding campaign. Please register your interest to be the first to know when it goes live.

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