Commercial Sustainability of Peri-Urban Agriculture

Allen Roberts

www.strategyAudit.com.au.

Successful agriculture requires:LandWaterCustomers.Some very hard choices need to be made

How do you balance interests, reward & risk?

Short term Vs Long termIndividual Vs CommunityFarm Vs Urban.We are faced with the basic choice of farmsVs bedrooms, and the balance is currently heavily weighted against farms.

Food & beverage market

Ingredient

$16, 9%

Food service $45, 25%

Retail $118, 66%

179 $billion

The 2 supermarket gorillas get bad press, but there is way more out there.Requires business model innovation.

Drive cost out of supply chain

Reduce shelf prices

Market to increase customer numbers

& Basket size

Leverage Volume to negotiate price

reductions

Supermarket marketing model

Penalises small scale

Supermarket business model requires:ScaleLow costContinuity of supply. Peri urban farmers fail on all three, so need to find ways to get to customers who value their freshness, provenance, and sustainable practises.

Create lead Nurture leadLead into prospect

Prospect development

Transaction After sales

Create lead Nurture leadLead into prospect

Prospect development

Transaction After sales

Marketing Sales

Marketing Sales

Yesterday

Today

1. Digital broke the marketing model

Farmers need to be better marketers, not better farmers.

2. Supply chain to demand chain

Forecast Production Warehouse Wholesale Retail Consumer

ConsumerRetailWholesaleWarehouseproductionForecast

Supply chain

Demand chain

The old supply chain has reversed, and disintermediated.

3. Death of Mass

Mass

Early adopters

Loonies

Late adopters

Grandma

The mass market is dead.Mass = average, and nobody now is prepared to put up with average.

4. Power of “Tribes”

Mass?

Early adopters

Loonies

Late adopters

Grandma

We now are all members of many tribes, Dunbarsnumber has lost traction.The market has spread widely, and there are niches everywhere.

It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change

Charles Darwin 1809 - 1882

Peri urban agriculture is a C21 challenge, we need to look at it with C21 tools, as C20 tools will not be adequate, and lead to no change.