We know it takes grit to be an entrepreneur, and in this day-and-age it takes a special kind of grit to be a farm entrepreneur. Now more than ever farmers need to adapt their business models, innovate, and diversify to increase and maintain profitability. Not only do we ask farmers to plant, grow, and harvest, we ask them to brand, market, certify, sell, and innovate in a way that is natural (and budgeted for) within a growing CPG brand.
At the Food Finance Institute (FFI), we work with farm entrepreneurs to identify opportunities to adapt and diversify their business models while leveraging the unique stories and strengths of their brands and farms. While this strategy is not unique to farmers, the execution of it is more nuanced. We help not only the entrepreneur, but also our FFI-trained consultants and technical assistance providers, understand these nuances and the changing landscape of and market opportunity for, a farm-based enterprise. Despite the ever present challenges ranging from changing consumer preferences to climate variability, there is opportunity: farm-based businesses have the transparency and sustainability messages that consumers are seeking, and today just three crops (rice, maize, and wheat) account for over half of the plant calories consumed. Consumers are receptive to trying new products and diversifying their diet and there is untapped potential to build the market for less common plants, specialty crops, and value-added products.
In our most recent podcast, Wisconsin-based Campo Di Bella Winery, farm and farm-to-table restaurant, shares with us how they adapt and diversify their business model while creatively finding more value in their grapes. In response to customers, they determined a rosé they loved was too dry for the Midwestern palate and turned it into a vermouth. In response to climate variability, when a cold winter and damp spring caused their wine to fail, they converted that wine into a red wine vinegar. This ability to adapt paired with their diversified agritourism business model (which includes an on-farm restaurant and Airbnb) sets the farm up for long-term success and sustained profitability – not only for today but to pass on to the next generation tomorrow.
We encourage all business owners to consistently ask themselves three questions: “Where can I innovate and diversify?”, “Where are missed opportunities for innovation and/or collaboration?”, and “How do I remain viable, sustainable, and profitable not only for today but tomorrow?” These can be difficult questions to dig into on your own! When you need support, know that there are always a pool of FFI trained and certified consultants available to help you navigate these questions.
And now, our roundup of the best food and beverage finance news, events and resources from around the web…
Business Model Insights
- The Pivot That Helped This Founder Get Into 10,000 Stores (Entrepreneur)
“Jesse Wolfe created a delicious hummus that people loved, but he struggled to make big sales… Then he spotted the opportunity in his failure He convinced his team, reworked his manufacturing process, and saw immediate results. In 2017, he was in 400 stores. In 2018, he was in 4,000 stores. Near the end of 2019, he’s in more than 10,000.”
- Investing in the Future of Food: Failure to invest in e-commerce threatens market share, reputation (Food Navigator USA)
- Former Amazon executive talks ‘winning the last mile’ at Private Label Trade Show (Store Brands)
- Rule Breaker gets a crowdfunded boost (New Hope Network)
“In just three weeks, the campaign exceeded its original goal of $10,000 by nearly three times that amount, with 403 bakers pledging $28,403 towards the launch of this new line of three varieties of bite-sized cookies (Birthday Cake, Deep Chocolate Brownie and Chocolate Chunk Brownie). We caught up with Rule Breaker’s CEO and founder Nancy Kalish to ask her about her experience with this popular crowdfunding platform.”
- Banking agencies give hemp the OK (New Food Economy)
- Raising Capital From Accredited Investors: Know The Two Types Before You Start Your Pursuit (Forbes)
- Study reveals 7 important factors set to shape the future of convenience retail (Refrigerated & Frozen Foods)
“Across the U.S. retail landscape, convenience stores are said to grow faster than all other offline channels over the next five years, according to a study released by Nielsen, Chicago, thus reflecting the hyper-focus consumers put on expediency… Here are seven important factors set to shape the future of the convenience industry.”
- How to have nearly 50 years of success in plant-based food: Follow Your Heart (Food Dive)
- How to strategically build out your brand budget (New Hope Media)
- Sustainability Drives Food Brands to Embrace Earth-Friendly Practices (U.S. Chamber of Commerce)
“The future of food will be more environmentally sustainable and biodiverse, according to industry experts and new research.The NYU-IRI study concluded that sustainably marketed products are responsible for more than half the growth in packaged food products since 2013, according to Tensie Whelan, professor at NYU Stern School of Business and director of the Stern Center for Sustainable Business.”
- 59% of adults prefer snacking to meals, Mondelez study finds (Food Dive)
- Delivery Only: The Rise Of Restaurants With No Diners As Apps Take Orders (NPR)
Farming and AgTech
- Agtech solutions allow farming to move indoors (SmartBrief)
“Jeffrey Landau, director of business development at Agritecture Consulting, told the BBC he estimates the value of the global vertical farming market will reach roughly $6.4 billion by 2023, compared with a market value of $403 million in 2013. This growth inevitably means more companies are cropping up to become the necessary support that growers need to successfully move their operations inside.” See Also: these articles about Bowery Farming and Farmshelf, two vertical farming start-ups that recently received investments.
- Chew On This: Farmers Are Using Food Waste To Make Electricity (NPR)
- Agriculture: Germ of an asset class (IPE Real Assets)
- Vegan Cheeses Gain Momentum Amid Investments (Specialty Food Association)
“U.S. retail sales of other plant-based dairy alternatives have surged in recent years, led by plant-based milks at $1.9 billion, followed by ice cream (up 26 percent, to $304 million), yogurt (up 39 percent, to $230 million), and creamer (up 40 percent, to $226 million). Plant-based meat sales, meanwhile, grew at a 10 percent pace in that time period, to $801 million. Recent investments in plant-based cheese production support the category’s growing momentum. Just last week one of the leaders in plant-based cheese products, Miyoko’s Creamery, based in Sonoma, Calif., said it had received an investment from Ellen DeGeneres and her partner Portia de Rossi, who proclaimed their concern for animal welfare.”
- Banza Raises $20M to Focus on Food Service & Brand (Nosh)
- Deal Download: December 2019 (Nutrition Capital Network)
- Amazon Small Business Academy – Various Courses through Feb 2020, $, Online
- Becoming A More Effective Sales Manager In The Natural And Specialty Channel – (Bob Burke Consulting) 12/10 -12/11 in Boston, MA
- Financing Your Consumer Product Company: Natural, Organic, Specialty, Retail & Premium – (Bob Burke Consulting) 12/12 in Boston, MA
- Edible-Alpha® Raising Equity Live-Online Course – 01/20, 01/27, 02/03 2020 Online
- MOSES Conference 2020 (MOSES) – $, 2/27 – 2/29 2020 in La Crosse, WI
- Food System Vision Prize (Rockefeller Foundation) – Free to apply, 1/30 2020 Online
- Expo West 2020 (New Hope Network) – $, 3/3-3/7 2020 in Anaheim, CA
- National Good Food Network Conference 2020 (Wallace Center) – $, 3/10 – 3/13 2020 in New Orleans, LA
- Supply Side East, $, April 21-22 2020 in Secaucus, NJ
- SAVOR™: An American Craft Beer & Food Experience, $, 5/15 2020 in Washington D.C.