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Managing Estates & Land Estate & Land Management Future Trends Consumer trends

CLA Rural Business Conference – Unlocking tomorrow’s markets

Q4 2019

Strutt & Parker was delighted to sponsor the 2019 CLA Rural Business Conference, which examined the opportunities for rural landowners to grow their businesses by seeking out new markets.

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The conference was a fantastic opportunity to learn from, and be inspired by, landowners who have embraced change and successfully identified a range of new market opportunities, both at home and abroad.

What is striking is that many are not only future-proofing their own businesses, they are also playing a critical role in helping society meet the big challenges of our time.

For example, there was a strong emphasis on the potential for landowners to tap into new environmental and social markets, through the delivery of carbon sequestration, biodiversity restoration, or care farming services to improve social outcomes.

Speakers also shared their experiences of how they have identified new markets for goods, ranging from compound fertilisers made from waste products, to non-food crops grown for use in industry, pharmaceuticals, nutraceuticals and personal care products.

Key messages from the conference:

  • Despite the uncertainties facing rural businesses, there are opportunities for landowners who are willing to embrace change and think differently about how they make best use of their land assets.
  • Landowners can open up new income streams by playing a critical role in helping the government to deliver on its long-term ambitions on climate change and reversing losses in biodiversity.
  • It is becoming increasingly important for private landowners to show that they are a force for good and that they are helping to address the big challenges facing society, including climate change, biodiversity losses and the need to improve the nation’s health and wellbeing.
  • Farmgate prices for commodities are likely to remain under pressure – as the retail marketplace for food and drink is tough. The sector is facing the challenge of costs rising more than sales, with the move to online shopping and the rise of discounters also eating into margins.
  • Understanding changing consumer patterns is vital as businesses seek to identify new markets, with the end user the most important stakeholder in the food chain.

Watch a video of The Countess Sondes talk about how the benefits of introducing non-food crops, such as echium, at Lees Court Estate in Kent.

The estate is also engaging in initiatives such as a large-scale archaeology project, conservation work on the Swale Estuary and a tortoise breeding programme, which are delivering significant personal, social and environmental benefits.



The potential of environmental and social markets

Carbon trading and the provision of environmental goods was identified by 52% of the 550 delegates in attendance as the market with the most potential for the rural economy. It may be a market in its infancy, but it is one which could provide important long-term income streams for landowners. However, policy makers will need to address market failures, which are meaning some ‘service providers’ currently struggle to get paid a fair price for the outcomes they produce.

Key lessons shared by speakers:

  • Government is introducing legislation which will make it mandatory for developers to provide a 10% biodiversity net gain when building new houses, in order to reverse serious declines in biodiversity.
  • Biodiversity net gain is likely to be a major part of the market for environmental goods, with landowners receiving annual payments for a period of 30 years in return for providing bespoke habitat banks to offset development.
  • Bespoke habitat banks can be used to generate conservation credits which can be used to service multiple developments in a region.
  • The potential value of a mandatory biodiversity offsetting market ranges from £500m to £1.2bn per annum.
  • Corporate businesses will increasingly come under pressure to account for the environmental impact of their operations – which could prove to be an even larger market for environmental services and offsetting.
  • There could be significant potential for the UK farming industry to supply the raw materials (potatoes and maize) required to produce bioplastics, with demand for bioplastics rising rapidly as people seek to cut down on single-use plastics. However, the UK needs a suitable starch extraction facility to make this happen.
  • Technology is now being used to produce high-grade compound fertiliser based on captured carbon dioxide and waste nitrogen sources, such as sewage sludge. This manufacturing method leads to an 85% reduction in the carbon footprint when compared with traditional fertiliser manufacturing techniques.
  • Farms and estates can play a powerful role in helping children and adults with defined needs to benefit from health, social and specialist educational care, transforming the lives of the individuals concerned. Attracting funding can be a challenge, despite the clear value of the work, but it can be deeply rewarding on many levels.

Changing consumer patterns – at home and abroad

The food industry is going through a period of rapid transformation, with analysts suggesting it could change more in the next 10 years than the previous 50 years. As rural businesses look for new opportunities they need to ensure they are addressing the fundamental needs of consumers - focusing on what people do and not what they say.

Key lessons shared by speakers:

  • It can be misleading to look at markets in aggregate and at a distance – get close to the people, products and place and stop treating consumers as a homogeneous mass.
  • Examine the data on consumer patterns – their actions may speak louder than words when it comes to issues such as provenance, welfare and the environment. Data is available for free from the Who Buys My Food project, run by University of East Anglia.
  • Most people’s food buying decisions are driven by habit and emotion, more than rational thought. The average shopper spends just seven seconds at a food fixture.
  • Tapping into international markets for food can be financially rewarding, but takes investment in terms of travel, research and time away from the core business to get things started.
  • There is a huge opportunity for UK-produced products as British provenance does carry weight around the world.
  • Research is critical when considering exports – but lots of information is available through government departments and universities, who can supply analysis on the best markets to target.
  • The biggest challenge when building a successful exports business is getting the admin and paperwork right.

Speakers at the 2019 CLA Rural Business Conference included: Mark Bridgeman, CLA President; Lord Price, UK trade adviser and former managing director of Waitrose; Dai Miles and Stuart McNally, from organic dairy cooperative Calon Wen; Jeff Grant, New Zealand red meat sector representative; Pawel Kisielewski of CCm Technologies; The Countess Sondes, Lees Court Estate; Professor Andrew Fearne, University of East Anglia; Professor David Hill, The Environment Bank; Jess Brooks, Game and Wildlife Conservation Trust; Tim Palmer, farmer chairman of Martin Down Farmer Cluster; Joe Evans, managing director, Whitbourne Estate and Julia Evans, chief executive of Longlands Care Farm.