On 6th November, the NEC in Birmingham will open its doors to the Farm Business Innovation Show. For three years on the trot, I have been a speaker at this event, talking to land-based business owners about how to exploit the marketing mix to optimise their diversifying businesses.
Why have so many land-based businesses diversified?
There is an extraordinary number of disruptive factors that have entered the arena in the past 10 years for this industry, which is why I love this show and what it is trying to achieve.
- Greater mechanisation and automation: as with all industries, there has been huge digital influence which includes the introduction of precision farming techniques, sensing and monitoring systems, inspection via drones, Big Data and AI.
- Changes in consumer behaviour: there is a move to eating less meat and dairy which is well documented, but there is also a change to our palettes meaning vegetable plant breeders need to develop sweeter tasting cabbages, fun coloured Brussel sprouts and judge what unique product their customers might want on next year’s Christmas dining table.
- Heightened environmental pressures: ELS and HLS environmental programmes (and their predecessors) have seen farmers build beetle banks, plant wildflower margins and invest in trees. However, the public and Government expect farmers to do more on their behalf to improve biodiversity on a larger scale. This is at the same time as landowners are facing more flooding, more droughts and generally much harsher weather.
- Farming doesn’t always make money: large scale farms and niche farms can be very profitable, but the small and medium-sized traditional farms increasingly find themselves unable to compete in a global marketplace. In the UK this will be further impacted by reductions or the end to subsidies, which has already happened in other countries. Farming on its own doesn’t always make money, so the space on a farm needs to have multiple roles to remove vulnerabilities.
As you can see, farm businesses are not simple crop-growing operations.
Land-based Innovation – Tips for Success
Here are Ignite Exponential’s top tips for starting to think about innovation for land-based businesses:
- Diversification; understand your new marketplace: as you will see at the Farm Innovation Show, there are scores of different routes to take. You could invest in vertical farming, or run a trendy glamping holiday destination. You could diversify into different crops, requiring new machinery and familiarisation with the characteristics of that crop. You will need to balance what you are good at, what you enjoy and what the marketplace might want from your location and products. What is the supply and demand for your new diversified business?
- Be a marketer, operations manager and accountant: landowners already know how to multi-task. However, leaving the land and heading to the office permanently is not always an easy transition, and many business owners find it difficult to manage the huge amount of extra work and communications needed in a changing operation. So, think about where your own skills lie and where you might need to out-source a skill. Do you need a marketing agency, leaving you to run the operations of the business? Or do you need a farm manager, leaving you to concentrate on new business development?
- Innovation through acquisition: do you want to sell some or all of your land, or buy more land to achieve economies of scale? Perhaps increasing your hectarage through contract farming first. There are plenty of options and each business has its own set of factors to consider in terms of skillsets, finance, product and place.
- Test the market first: no need to buy 10 yurts and a soft play centre’s worth of play equipment. Start small and build on successes when you have more evidence-based knowledge about a new market you’ll be entering.
You are already an innovative entrepreneur if you are considering diversification plans, so take lessons from lean start-ups in other industries in order to lessen risk and get better results.
If you are going to the show, here are some of my recommendations for speakers to see:
Innes McEwen is Head of Farming for Future Biogas Ltd and is fantastic to listen to. He’ll be covering Renewables and Energy Storage at the show.
The engaging Tara Punter (@TaraPunterPR) will be covering PR for rural business. She’s an enjoyable speaker giving food for thought on your own PR strategy.
My old colleague Nigel Padbury (@PremiumCrops) will be speaking about what other options there are for break crops for farmers now OSR is harder to produce.
If you would like to chat about the diversification of land-based businesses, pop us an email and we can send you our AgriTech brochure!