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Effects and longevity of niche markets

How can you create value from value-added?

With the agriculture industry entering the seventh year of the economic reset, some producers are examining niche or value-added markets. Organic production, hemp, point of origin, and specialty crops are just a few niche markets that come to mind.

Given the changes in consumer preferences, the growth of these markets is inevitable. The millennials, Generation Z and Generation A will shape the markets. The key to these domestic and global markets will be transparency concerning point of origin. The personalization and customization from producers to the consumer will be attributes that provide initial entrance into the marketplace.

The key to market longevity is to be one, two, or three production or service differentiators ahead of the competition. A product or service can quickly become a commodity when innovation is lacking. For example, the organic milk sector has become commoditized by larger competitors taking away much of the pricing premium.

Whether it is crop or livestock, the success in the market often takes three to five years to establish the branding effect. Once established, then the task is to build off the brand. Be careful not to destroy the brand with the production process or a marketing blunder.

Study the industry and determine the trends, direction of the market, and the competition. The key to success is the alignment of your land, labor, and capital resources with your talents and management skills. Then, layer your resources and skills with the wants and needs of the marketplace. The ability to align these three categories is 95 percent of success.

Management tip

Niche markets will be a trend for young producers, particularly those coming from outside the industry or coming back to the industry. Study consumer trends in Europe, Australia, New Zealand, and Canada for possible new markets. Look for niche markets to be a major trend from 2020 to 2030. Remember, just because your operation is not located near a metropolitan area does not mean that you cannot be successful operating in a niche market.

TAGS: Crops
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