Michael Mazzocco, Director at Verdant AgriBusiness Consultants, presented the afternoon session of day 6 of the TEPAP conference. This session was on Market Growth Strategies for farmers.
To grow your farm revenues, you have seven degrees of freedom:
- Increase sales - same customers; same product mix
- Existing products; new customers
- New products - same or new customers
- Increase sales with better delivery / channel management
- Expand geography
- Change industry structure via acquisition/alliances
- Cross industry boundaries
You can focus on only one of these or decide to incorporate a couple into your farm structure.
If a farm decides to grow, then there are three horizons of growth:
- Horizon 1 - Extend and defend your core business first
- Horizon 2 - Build your emerging growth business
- Horizon 3 - Create viable options for that growth
Always be willing to shed your business of those operations that are running below your rate of capital. By doing this, you free up resources to expand those operations that exceed your cost of capital. This can be a double benefit.