How the changing profile of the farmer and their adoption of technology is impacting their shopping journey

I have always been passionate about understanding the farmer's journey and in 2015 when I was the Marketing Director of one of the companies I worked for, we designed the farmer's journey together with Paulo Al Assal and divided this journey into 4 phases: 

- Investigation: What to plant?

- Planning: Looking for products, decide what to buy, and prepare to bear the costs (Future lock, Future sale, etc.)

- Experience: Plant, Apply, Monitor, Harvest

- Results: Measure the Performance / Success or Failure / Store / Delivery and Reinvest

Understanding and being present at each of these phases is paramount for customer-oriented companies. Five years after we first designed this journey, we have had a lot of changes, and the digital transformation that came at cruising speed has been accelerated by Covid 19.

What changed on this journey? What are we learning from this transformation? What impacts will we have?

The Brazilian farmer, a resilient one by nature, had an exemplary posture in this pandemic, the agrobusiness did not stop, and according to the recent ABMRA survey, we saw that 64% of farmers did not feel any impact and 86% of them did not make any changes in the management of their properties and what makes me most excited about this sector is that 78% of them kept their investments even in the biggest health crisis in recent times.

This survey also found that 94% of producers have a smartphone against 61% of the previous survey, which took place in 2017, a jump that shows all the acceleration that we had mainly in these almost two years of the pandemic. 74% of producers today use the internet to update themselves, and to my surprise, WhatsApp was the platform most used by them and not only to receive information but also to close deals. 

But one thing about all this digital transformation causes me some concern, is the exaggerated appeal of “Market places” in sales.

How will this tool enter in the customer journey without destroying value in a value chain already compressed by margins due to commoditization?

 What made me more comfortable with this research was that its corroborated a little with my hypothesis:

Farmers are using these channels more as a source of information and a source of pricing than to effectively close deals. The sales that took place through Market places were much more in function of discounting, destruction of value, than a value proposition of content or value. In most of the cases, the farmer took the price and used WhatsApp to close the deal with the company/agronomist he trusted.

 In my point of view, the more the products are commoditized, the more the marketplace will be the biggest source of sales and the more the farmer trusts in delivery and in the form of payment the more online sales will increase for these products.

For commodity companies and for professionals that do not offer value, the farmers will replace them with the click.

In the United States, digital sales by some distributors represented almost 20% of sales, with more than 90% of these being in the fertilizer area. This concern with the trivialization of the Marketplace and digital sales grew as they became more aggressive and numerous, and whose only value proposition was based on discounts.

Browse these Marketplaces and you will understand that everyone wants to be the Magazine Luiza or the Amazon of agribusiness, and forget that our offers are based on science and technical training.

I even heard from some of them recently, saying that digital sales will allow agronomists, veterinarians, and zoo technicians more time to “sell” other things. In fact, we must use Marketplaces to give us a better price parameter for the farmer, offer useful market information, and help them in the investigation, planning, experience, and results. I think, as an agronomist, if I have more time, instead of selling, I will use that time to use more data and innovation to meet, recommend and make the farmer produce more and use fewer resources.

What matters to me in my offer is giving profitability to the producer and the digital tools needed to help me with information and practical results  to obtain this.

Actually, Brazil has more than 1500 agtechs and many of them focused on the Market place and I have been studied and monitored several of them, from the small ones to the co-owners of distributors, cooperatives, and crop input companies, and I want to give two examples that I appreciated very much: An American and one Brazilian who are looking for a better value proposition to the farmer instead only discounts.

The first of them is the American/Australian FBN which had a huge change in membership after it started making the platform free and instead of focusing on discounts and sales all the time, started to focus more on information and content to help the farmer in decision-making and not simply in the purchase of products. They got stronger, as instead of having transaction-based customers they started to think about community and engagement.

The program called Farmers First strengthened the farmer-to-farmer connection, and the connections grew as farmers shared experiences with each other and thus encouraged more farmers to participate in this community. FBN focused on leveraging the power of network intelligence and technology to maximize farmer profit, began using data insights to help farmers make safe, bottom-line decisions, including transparency in crop input prices, in the performance of seed varieties/hybrids, in the performance of the products and in the network benchmarking. A clear value proposition that enriches the chain and not simply goes for the easiest appeal of destruction, which is to always discount.

Our agricultural Market Places, managed to popularize even black Fridays, as every Friday has a discount.

Other positive example at this time here in Brazil, is agro2business (www.agro2business.com), an agtech that focuses on being a business platform aimed mainly at the concept of the circular economy.

 
Understanding the customer journey, they realized that in the production process in the field and in the food industry there are a series of residues and leftovers, which could be better monetized and captured by specializing in the commercialization of these by-products.

Items such as soybean meal, cottonseed, citrus pulp, chicken feather, sugarcane bagasse, rice and coffee husk, beef tallow, meat and bone meal, swine grease, animal feed that was previously discarded, donated, or generator of “garbage”, today generate economic value for the entire chain.

Instead of focusing only on the sale of products, they also have a Marketplace for crop inputs and serve as a platform for other companies, they sought to solve a problem by bringing technologies such as geolocation tools, user ranking, and data analysis to increase connections. What used to be an informal and word-of-mouth market, with the use of technology they increased the scale and income of the producer. Another interesting point of the platform is the concept of Reverse Auction, that is, seeking a cost reduction in the investigation phase, the platform proposes that the farmer or rancher place the product and the price they want to pay, and the platform seeks interested parties in meeting this demand with the established quantity and price.

 I also really liked the platform for the concept of community, where in addition to information that generates content, we also have a section with offers of jobs and employees, as well as migrating, to help farmers export products, regularize rural areas through compensation of legal areas and in the search for revenue from carbon credits generated in the productive activity.

Agro2business and FBN show us that it is important to think about digital sales, but above this sale, we have to think about concepts such as Algorithms, community, experimentation, engagement, and how to integrate all of this with the needs of the farmer within their journey of production. If it does not happen, the agro Market places, in addition to black Fridays, will have to start making black Mondays, Tuesdays, Sundays etc...