Farmers of today are facing many challenges that did not exist twenty years ago or weren’t as severe. Most people agree that we are living in ‘uncertain’ times - particularly economically… but along with the challenges, there are also some excellent opportunities for innovation and growth.
Farmers of today are facing many challenges that did not exist twenty years ago or weren’t as severe. Most people agree that we are living in ‘uncertain’ times - particularly economically… but along with the challenges, there are also some excellent opportunities for innovation and growth.
One of the recent shifts helping farmers in this current climate is the move towards direct-to-consumer (DTC) e-commerce business models. Instead of just being producers, many farms are skipping the middlemen altogether and selling directly to consumers who want high-quality agricultural products.
Selling directly to consumers used to be far more difficult in the past, but now through the internet, even small family farms can set up shop and sell straight to consumers. Where it used to require building a physical store and all the logistics associated with that, there is now technology that brings customers to you virtually and instantly.
In this issue, we will cover the basics of this business model and look at how it applies to farming in New Zealand.
Looking back: The Industrial Revolution and its influence on farming in NZ
The Industrial Revolution brought significant changes to global agriculture, including NZ’s farming sector. As technology and infrastructure rapidly advanced, agricultural production boomed. But this progress came with some changes, as it resulted in large-scale, volume-based food production that often sacrificed connection to our food and sustainability.
Now, Kiwi consumers long for a more genuine connection to their food and its origins, and the DTC model is helping farmers reestablish that farm-to-table bond.
Here's why people want to buy straight from farmers.
The reason there’s such an opportunity here is not just because of the power of the internet - we all know that the internet makes it easier for businesses to reach customers. There’s also a groundswell of demand for this sort of service, as consumers' attitudes and values change. Ultimately, now more than ever, people want to know where their food comes from.
Now, more than ever, people crave transparency about their food sources. With growing scepticism around food products, individuals are becoming increasingly aware of their health and the environment. Whole market segments are now willing to pay a premium for products they perceive as healthier, more sustainable, or simply more trustworthy.
People also want quality, and they're often willing to spend more to get it and kiwis are no exception. A Consumer NZ survey found that 68% of consumers prioritize the quality of a product when making a purchase decision. This underscores the value that kiwi buyers place on high-quality goods.
These growing consumer preferences present a golden opportunity for forward-thinking farmers to embrace the DTC model, tapping into the demand for sustainable and traceable products. So let's dive in and explore the Kiwi farming businesses currently making waves in the DTC space.
Hill Country Farms
One shining example of a direct-to-consumer business model in the NZ farming community is Hill Country Farms. Owned by the Ryan family, this Hawke's Bay-based farm is a mixed horticulture and cattle finishing operation nestled in the picturesque Heretaunga Plains. The farm raises cattle on a blend of the nearby hill country and their home block located just south of central Hastings.
They raise their cattle on fresh Hawke’s Bay grass, using a combination of sustainable farming practices and care to produce high-quality beef that their growing customer base loves.
Hill Country Farms has cleverly leveraged the DTC model by offering grass-fed beef boxes on their website - which are popular for both eating at home and as corporate gift boxes. This gives a platform for them to showcase their commitment to quality and sustainability while building trust and rapport with customers who value transparency in their food sources.
Havoc Farm Pork
Another DTC innovator is Havoc Farm Pork. Founded by Ian Jackson, a passionate pig farmer with international experience, the farm has its roots in Ian's time spent working in the UK's pig industry and travelling to various pig farms worldwide.
Today, Havoc Farm Pork brings Ian's expertise and dedication to quality to customers across New Zealand through its user-friendly online store. By selling directly to consumers, the farm is able to showcase its commitment to humane pig farming practices, while also providing a convenient shopping experience for its customers.
The Brothers Green: A sustainable pioneer in the DTC space
All good family farmers place a huge emphasis on environmental stewardship and welcome any opportunity for new crops such as hemp to help them achieve gains in this area.
As consumer demand for plant-based proteins and foods continues to rise globally, The Brothers Green recognizes the potential in this growing market and masterfully combines sustainability and the DTC model by offering their eco-friendly hemp products through a sleek online store.
This allows them to share their passion for green practices whilst making it easy for customers to access their nutritious hemp-based offering. They've also recently widened their impact and catered to ever-evolving consumer needs by establishing wholesale relationships.
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Happy Cow Milk
Controversial but growing fast, Happy Cow Milk has re-engineered the milk model with a different approach to both the collection of milk & its sales of it.
A complex product has meant it’s not quite as simple as just creating a website and getting on with selling. HCM allows farmers to have a mini processing plant and collection and cuts the bigger players out altogether. By reimagining the traditional supply chain, they've found a way to empower farmers and create a more sustainable business model.
Despite the success that many NZ farms have found from using the DTC approach - it may not be a viable option for all farms.
Although the DTC model has worked well for many NZ farms, it's not a ‘one-size-fits-all’ approach. That being said, with the challenges that Kiwi farmers face such as rising costs and changing market dynamics, it's definitely worth looking into other ways to boost your farm's income.
Smaller farms looking to start a DTC limb of their business might come across some hurdles, especially when it comes to marketing and logistics, like setting up a user-friendly e-commerce platform. In situations like these, collaboration can be the key. By teaming up with other small-scale farmers, you can pool resources and work together to create joint online platforms or shared distribution networks.
This cooperative approach allows everyone to reap the benefits of the DTC model, creating a tight-knit community of farmers who support one another in navigating the challenges of today's agricultural landscape. Plus, by joining local initiatives like food co-ops or farm-to-table programs, you can expand your customer base and strengthen connections within your community.
