New rural industries Rob Fletcher School of Agriculture and Horticulture University of Queensland Ga

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New rural industriesRob FletcherSchool of
Agriculture and HorticultureUniversity of
Queensland Gatton
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Our aim is to reduce the anticipointment of new
rural industries
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anticipointment

• n. the expectation and disappointment often
  experienced with new rural industry development

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Problems with all new rural industries

• Little truthful information
• High risk
• A long wait for profits
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To solve a problem

• 1. Copy someone else
• 2. Trial error
• 3. Guidelines

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Principles are things no-one subscribes to,
apart from the person who established them.
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In principle, there should be no differences
between principles and practice.
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In practice, there is.
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50 of us are below average
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97.3 of all statistics are made up
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Hatching Out Profitable Enterprises
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HOPE
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HYPE
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Hamper Your Progress Every-time
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Although an expert is someone from a long way
away (with OHTs)
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There are no experts
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Each participants system is unique

• Experience Aspirations Capabilities

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• Globalisation
• Environmentalism
• Consumerism

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Todays remaining proceedings have been cancelled
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I do not like surprises
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Who says today is cancelled? Why? Whom do I blame?
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I would like to have more information
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Insufficient information

• How much information is sufficient?

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Facilitation

• never initiate anything
• never motivate anyone
• only give help if asked
• listen all the time
• Ernesto Sirolli Ripples
  in the Zambezi

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New rural industries

• new products from conventional industries
• conventional products from new industries

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Strategy

• Old Industry Old Industry
• Old Product New Product
• Market Penetration Product
  Development
• New Industry New Industry
• Old Product New Product
• Industry Development
  Diversification

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Marketing theory

• New manufacturing industries
• Not new rural industries

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New manufacturing industries

• New products are often a slight modification of
  current products
• --------------------------------------------------
  -------
• New products are often an entirely new industry
  (e.g. broad acre to horticulture)

New rural industries
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New manufacturing industries

• Large companies with large resources
• --------------------------------------------------
  -------------
• Small companies with limited resources

New rural industries
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New manufacturing industries

• New products represent a relatively minor
  proportion of the companys activity
• --------------------------------------------------
  -------
• New products often represent a large proportion
  of the companys activity

New rural industries
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New manufacturing industries

• New products are released in large quantities
  with plenty of promotion
• --------------------------------------------------
  -------
• New products are released in small quantities
  over extended periods of time with little or no
  positive promotion

New rural industries
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A new crop is a crop new to an area
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New Crops since 1950(Australia)

• Wood Chudleigh
• Bond (1994)

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Gross Value(million, 1992)
All crops New crops 1949-50 6783
20 1991-92 9108 1570
Annual Increase 55 37(67)
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220 new crops
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4591 potential new crops
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Whats your new rural industry?

• Organics Stevia Vegetable soybean Hemp Native
  flowers Bush tucker Neem Asian vegetables
  Paulownia Olives Echinacea Kenaf Pitaya Cacao Tea
  tree Sunn hemp Lemon myrtle Jujube Dioscorea
  Amaranth ...
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Enquiries what should I do?

• I dont know
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The 10 points for Planning
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Planning

• 1. Are we contented?

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Crisis?Desiging a better future?
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Planning

• 2. Why are we contemplating change?

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Will the change be a hobby or a business?
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What is our purpose?
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What is the purpose of our purpose?
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What is the purpose of the purpose of our purpose?
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Forpossing

• n. focussing on the purpose

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Focus on the the main game
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Planning

• How will we know we have been successful?

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Benchmarking
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Planning

• What happens if we are successful?

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Future purpose
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Planning

• 3. What do we enjoy doing?

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Expecting windfall profits can be exhilarating
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Will the changes drive us crazy?
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Planning

• 4. What is our commitment to change?

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What can we do for ourselves?
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Dependancy
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Planning

• 5. Is there easy access to info?

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• Media reports
• Hunches
• Data
• Info
• Knowledge
• Wisdom

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Bootstrapping
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Planning

• 6. What is the new product?

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We will never hit a target unless we aim at it
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Planning

• 7. What is the new products marketability?

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Why produce something nobody needs?
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DOOR Marketing(Do Our Own Marketing Research for
New Rural Industries)
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Planning

• 8. Is the new product easy to produce?

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Planning

• 9. Are others also considering change?

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Planning

• 10. Should we work with others?

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DOOR Marketing(Do Our Own Marketing Research for
New Rural Industries)
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Can you sell the product?Can you get it to
market?Who will get in your way?Can you improve
your info?
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NameAffiliationReason for attendingAgribusiness
to targetDesired outcomes
Introductions
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We can talk about usFacilitator provokes
Exchanges occur
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We all know who each of us is
We all have the same problem
Outcome
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Farming systems 1 What are our wishes?
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Farming systems 2 What are our aims?
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Farming systems 3 Evaluation and modification
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Farming systems 4 Future plans
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Think tankWhat info is needed?Priorities?Where
is the info?How will we get it?
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Strategic Marketing Management

• What market conditions are necessary to stimulate
  the commercialisation of new crop products?

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Strategic Marketing Management

• External
• Customers
• Competitors
• Market analysis
• Environment
• Opportunities and threats

• Internal
• Performance
• Strategic options
• Strengths and weaknesses

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INTERNAL EXTERNAL
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INTERNAL EXTERNAL
M
M
M
M
M
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The 13 steps for new crop commercialisation
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Predicting economic outcomes is only difficult
when it relates to the future
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Active commercialisation with benchmarking and
monitoring
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Commercialisation strategy

• 1. Choose the
• new enterprise

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Its always easier to learn something if it is
interesting and relevant
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Is there a local champion?
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Commercialisation strategy

• 2. acknowledge
• the risk

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We should only gamble what we can afford to lose
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Commercialisation strategy

• 3. respect
• intellectual property

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Commercialisation strategy

• 4. assess
• marketing potential

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Quality is the consumers view of the product
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Marketing satisfies consumer needs
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High demandIrrelevantPyramid selling
Unique at first
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LockoutIncreasing returnsExpected lossesGross
margins
Economic concerns
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constication

• n. consumer gratification

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purchume

• n. the sweet aroma emitted by a consumer
  purchasing what he or she really needs

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Commercialisation strategy

• 5. assess production potential
• (in theory)

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nopestsordiseases

• n. the ubiquitous claim made for any rural
  enterprise that has never been field tested

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Production dominates producers minds
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Why?

• Curiosity
• Achievement
• Producers

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Commercialisation strategy

• 6. form a group
• producers, processors, marketeers, facilitators

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Everyone involved in a solution needs to
participate in finding it
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Changes need expertise in 1. Production2.
Marketing 3. Business
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No one is expert in all three
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Value/supply chain

• Producer
• Processor/packager
• Transporter
• Wholesaler/packager
• Retailer
• Consumer

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Native Food Industry Supply Chain

• Wild harvesters, Consultants,
  Educators, Growers, Agribusiness, Companies,
  Brokers, Processors, Manufacturers, Exporters,
  Wholesale/retail, Government, Biomedical
  companies, Consumers
  (Hotson)

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How can competitors work together?
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ComplementCompete
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Commercialisation strategy

• 7. resources, plans, expectations, profits

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Agreements on

• Resource requirements
• Expected outcomes
• Action plans
• Profit distribution

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Agreement on when to abandon changes
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Commercialisation strategy

• 8. problem monitoring

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Commercialisation strategy

• 9. economic benchmarks

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Commercialisation strategy

• 10. a review system

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Commercialisation strategy

• 11. trial marketing

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Commercialisation strategy

• 12. trial processing, packaging, etc.

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Commercialisation strategy

• 13. experimental production

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Information and networking
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A few months research can often save a few days
in the library or a few hours on the telephone or
Internet.
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Emerging Opportunities in Agriculture Info Days
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http//www.newcrops.uq.edu.au
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ProductPlacePromotionPricePerson/peopleProfit

• P

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ChanceCuriosityCommunicationCooperationCommitm
entCoordinationCop-outCelebration

• C

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Thank you
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ContactDr Rob FletcherSchool of Agriculture
and HorticultureUniversity of Queensland
GattonPhone 07 5460 1311 07 5460
1301Facsimile 07 5460 1112Email
r.fletcher_at_mailbox.uq.edu.auWeb site
www.newcrops.uq.edu.au