Consumer preferences can totter between fads and trends. For farmers to capitalize on consumer demands, they must be able to sort out what is an of the moment fad or a significant shift, according to Rob Dongoski, Ernst & Young food and agriculture leader.
“This is a big challenge in agriculture, since it takes so much time to change course,” says Dongoski. “You really have to find the end market first.”
As a partner at Ernst & Young, Dongoski has over 20 years of experience serving clients in the food and agribusiness sectors. He works with a number of Fortune 500, Global 1000 and private companies in advisory and transaction capacities.
In helping clients develop growth strategies, complete buy-side and sell-side transactions and lead significant enterprise transformations, Dongoski has his pulse on some key trends. Here are three he believes farmers should monitor.
- Consumers want fresh and uncomplicated food. Overall, consumers are starting to shift to diets with more fresh food and foods with limited ingredients. These are things at the perimeter of the grocery store.
- Food miles are becoming mainstream. Local has been thrown around frequently in the last decade in terms of consumer trends. It is now mainstream. Consumers are tracking food miles, as in how far does it takes for strawberries to get to their grocery store. And, 1,800 miles doesn't sound very local.
- Younger generations are willing to pay more for food. Baby Boomers and Generation X have different views on food than their younger counterparts. While older generations are not willing to pay more for organic or regenerately grown food, Generation Z and Millennials are willing to do so.
How Farms Can Cash-in On Trends
Dongoski says farms of all sizes can capitalize on their trends, but in different ways. Large farms have the ability to scale and work with large companies, while small farms can specialize and find niche markets.
The other big trend shaping the future of farming is the technology used to do it.
“There are going to be folks who will continue to play a big role in the dirt and there's going to be farmers who are going to play big roles probably under glass,” Dongoski says. “We've reached a point where greenhouses, vertical farms and aquaponics play a larger potential role in our food system.”
EDITOR’S TAKE:
Your AIR Editor has always been a big supporter of determining the end market and then calculating solutions to meet those demands. It is refreshing to read Mr. Dongoski’s analysis and follow his logic as related to current consumer trends that have and will continue to impact agriculture in the future. Consumers are clearly becoming more vocal about their likes and dislikes. As the generations continue to evolve, farmers/ranchers will also need to change to keep up with consumer demands/trends, thus grow their revenue stream. The good news – they are very adept at changing to meet market preferences. This is precisely why we encourage all CAD members to take full advantage of their unique relationship to agriculture. Be sure to let farmers and ranchers know that you, as a CAD member, greatly appreciate them. Remember to let them know about the fantastic exclusive discounts and rebates that are part of AgPack®. Put your inventory on AgTruckTrader.com to gain even greater exposure to the farmers and ranchers in your market area.
