Adapting Farm Business Models for Sustained Profitability

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…

Consultant With TabletBusiness Model Insights

Raising CapitalRaising Capital

National Wholesale BrandsCPG/National Brands

Grocery Store Produce Section
Market Trends

Regenerative AgricultureFarming and AgTech

Mergers And AcquisitionsDeals/M&A

  • 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)

EventsIndustry Events