Everything you need to know about selling to diversifying farmers
Glamping. Glamorous camping. Bivouac deluxe. Whatever the name, you’ve probably heard about it in one form or another. A bunch of strong safari tents, timber pods or domes set up on a piece of land in an (usually) peaceful surrounding, what’s special about it? Well, it makes farmers and landowners around the world a great deal of money. Whatever business you operate you should understand what farm diversification is, why it happens and how you can take advantage of the trend. So, here is all you need to know!
Let’s start with the definition of what is farm diversification. It’s the act of adding other business activities to traditional farming on one's land. The choices are endless here, from tourism and hospitality to retail and renewable energy. Don’t worry, we will discuss each option later in this article. However, to fully take advantage of this market and understand your customer, you need to understand…
What motivates farmers and landowners to diversify?
It would be anticlimactic to answer that question with ‘farmers diversify for different reasons’, regardless of how accurate it is. There are trends that can be spotted if you look at the big picture. For example the uncertainty of Brexit prompted farmers to ensure their enterprises are more sustainable.
Another reason is the general shift in public approach to the environment. Farmers have been under fire for their allegedly high carbon footprint of their activities and livestock. Some experts challenged those claims publicly, but that didn’t reverse the damage caused by the sensationalist articles put out by various media outlets. Farmers are tackling that bad press in many ways. One of them is diversification into green tourism, renewables and forestry.
Livestock farms often diversify due to the big markets driving the milk prices down. Low margins prompt them to find new ways to utilise their milk. That's why we’ve seen such a boom for artisanal ice creams and cheeses. Interestingly, it just so happens that ‘conscious consuming’ has become much more prominent in recent years which is encouraging for young artisanal food business.
How big is the farm diversification market?
It is hard to estimate the exact size of the market because of the sheer number of options available for farmers to expand into. According to governmental statistics, there are over 212,000 farm holdings of various sizes in the UK. Out of that number 48% plan to set up or expand their diversification ventures. Based on that, there’s around 101,760 enterprises looking for products, services and advice that will help them make more money.
Total income from diversified activities in 2018/19 was £740 million according to the DEFRA report. It is not a surprise the numbers of farmers that have or are looking to add a new venture to their business have grown massively over the last decade. The recent survey also found that 97% of respondents that diversified considered it a success and 51% of them to a great extent. It is definitely an investment worth every penny.
What are the most popular ways to diversify?
Considering the very beginning of this article it would be appropriate to start with glamping sites. The global market size for this sector reached $2.1 billion in 2018 and is projected to grow at a rate of 12.5% until 2025. In the UK alone the interest in glamping has grown massively, which is the most transparent on Google Trends. The term ‘camping’ was searched 23.5 times more than ‘glamping’ in the year 2012, in 2019 this gap got reduced to only 5.7.
It is not a surprise then, that farmers turn their heads in that direction looking for additional income. It is a no-brainer really, if you have a piece of land in a picturesque part of Britain you don’t need much to start making money. These landowners are likely to look for the following:
- Glamping pods, tents or shepherds huts
- Surfacing services
- Planning services
- Landscaping services
- Garden offices
- Booking systems
Another popular route taken by farmers is to open a farm shop where they can sell their own produce. There are 4,000 farm shops in operations today, and their combined turnover is £1.5bln. The growing distrust of the middle class towards supermarkets has allowed the sector to develop within the decade. Some services needed by farmers choosing this option are:
- Modular Buildings
- Barn Conversions
- Shop fitting
- Vending Machines
- Epos systems
Farm shops often go hand in hand with artisan food production. Whether it’s cheese, ice cream, meat or any other freshly made food, landowners always look for more profitable ways of using the fruits of their land. The success stories are countless and often spectacular, no wonder many decide to try their luck at this endeavour. Some of the things one needs to set up such enterprise are:
- Food processing equipment
- Legal services and certificates
- Food hygiene solutions
The close cousin of artisan food solution is craft alcohol production. Pretty much in every alcohol market small-enterprises are rapidly growing in popularity. Micro-breweries, small distilleries and vineyards offer tasty alternatives to the low-to-average quality of mass-produced alcoholic drinks. The most popular choices for farm diversification are craft beers, gin, ciders and wine production. Here is what is needed in this sector:
- Alcohol production equipment
- Bottling machines
- Labelling solutions
- Modular buildings
Let’s have a look at a somewhat different diversification idea now. Many farmers have a spare barn that they can easily turn into a wedding venue. It is great for entrepreneurs that don’t want to get involved with extensive works on their land and want to make use of already existing buildings that are easier to convert. Some surveys suggest that the average cost of a UK wedding is more than £25,000 and venues are usually the biggest expense on the list. Farmers that want to take advantage of that fact, will usually need:
- Barn conversion services
- Marquees, gazebos and pergolas
- Catering equipment/services
Another farm diversification idea that has proven to be a great income source is to set up a petting zoo. For farmers that love working with animals this is a perfect opportunity. And it’s also a great opportunity for many other businesses because farms usually need some work before they can be used as a farm zoo. Here is a list of things this type of diversification usually requires:
- Timber buildings
- Rare animal breeds
- Outdoor furniture
There’s much more that farmers can do with their land, but these are the most popular ones. Were your products on one of the lists above? That means you probably should be exhibiting at the Farm Business Innovation Show. The demand for all of them is huge among landowners engaging in farm diversification projects. There are also thousands of established rural businesses coming to the show looking to invest in new projects.
If you want to learn more about how you can get your products in front of 18,000 diversifying farmers, landowners and country houses, email firstname.lastname@example.org. Make sure that you’re a part of the biggest event in the industry!