Trend Spotting in Agribusiness
Trends are everywhere around us, influencing everything we do. The difficulty is in spotting them early, assessing which ones have staying power and then extrapolating out the implications specific to you and your business. Trends have always fascinated me, especially when it comes to the strategic imperatives behind them. One core component of strategy is either identifying trends early and being able to take advantage of them, or better yet – starting a trend and creating the future. Often strategy even stems from the convergence of the various trends.
What is a Trend?
A trend is defined as:
“an assumed development in the future that will have a long-term and lasting effect on and change something, typically changing in intensity”
But identifying the trend itself isn’t the only important thing - understanding the velocity at which the trend is moving, and the breadth of the impact is important too, such as whether it’s micro trend or a macro trend.
Trends also tend to be multidimensional - meaning that many trends that one does not see in one's own industry at first glance are nevertheless often relevant due to chain and interaction effects. The second reason is that a trend in one's own industry can have very different effects.
The reason trend spotting is important, even if you aren’t directly involved in driving the strategic direction of a company or an entrepreneur, is preparing yourself for change. As humans we don’t inherently like change, and in fact we must condition ourselves for change. We are creatures of habit.
In agriculture we are continuously influenced by macro trends – consumer demands like sustainability, traceability, or organics, or business trends with technology like artificial intelligence. These make their way throughout the industry, ultimately impacting your business and the farm customer. We also deal with micro trends, which can ultimately roll up into a larger trend or interact further with other micro trends.
How Do You Spot Trends?
There are several ways to begin spotting trends – typically involving consumption (read, observation, discussion etc) of information:
Consume -> Synthesize
This is core to be able to identity trends. Plain and simple, you need to observe, converse, read, listen and then process and consider everything to be able to assess and understand what trends are happening. You want to be able to find the signal in the noise.
The goal is always to analyze quantitatively, however, qualitatively is important to, especially early on. Often there isn’t sound data early on to spot trends.
My focus when looking at and for trends is simple:
1. Collect Significant Ideas
The aim here is to find ideas that describe a behaviour that is happening today with increasing frequency.
2. Group Ideas By Theme
In this phase, my goal is to find individual ideas that have similarities and try to group them into clusters.
3. Consolidate Ideas
Multiple clusters may be related to the same bigger concept. This gives an idea of directionality.
Where do you find information to identify trends?
1. Take advantage of industry research and trends reports.
One of the simplest things you can do to better recognize trends is read research reports. Often, industry leaders perform original research and compile their findings in one large report, and by taking the time to actually read through it beyond the executive summary, you can almost always find something in it that's valuable and relevant to what's trending right now in your space.
These reports aren’t gospel but reading a variety of reports can help you get a feel for the landscape and where things are headed.
On top of this annual reports from influential companies can be instrumental. Many large organizations, specifically ones focused on R&D or platform strategy, need to have a 10+ year time horizon and plan in place. This can be competitors, strategic partners or otherwise.
Pattern recognition will begin to kick in and you’ll start making connection across numerous areas.
2. Regularly follow publications and influencers in your industry.
Let's be honest- we don't all have the time or desire to read through every report out there. A good alternative is making a point to read through top blogs and publications in your industry every day (In my biased opinion, I highly recommend Upstream Ag Insights).
A lot of the articles in those blogs and publications will reference data from the longer reports you don't have time to read in full so you can still gather that info in a more conversational, easy-to-digest format.
3. Use different tools and analytics systems to identify the direction trends are heading.
Using tools like Google AdWords or Ngram Viewer for example can be critical to understanding what exactly is starting to show up. You can use CRM tools at your own company as well to understand customer desires and shifts. In my opinion, the more tools the better when really digging in.
4. Surround yourself with smart people and advisors
Have a core group of friends, colleagues that you talk about trends and occurrences with. I’ve been fortunate enough to have friends and contacts in numerous industries as well as many within the ag industry that I am conversing with weekly – it keeps you relevant, helps to identify trends, but also keeps you grounded in what’s notable and what’s noise.
5. Ask the right questions, and listen to your customers.
Don't be afraid to ask current customers what's on their radars and what they see as future needs in their areas. You can get solid insight into trends in general and hear different perspectives. Many will say you need to look beyond customers, and many times I fully agree, but there is still a need to understand where customers are at and what they are thinking, ideally getting to the root of their problem.
I truly believe there is no replacement for good questions in general, especially when attempting to spot and clarify trends.
Example questions to be asked and answered in trend research are the following:
What impact do megatrends have on our company, our business and our industry?
What impact do megatrends have on our environment (e. g. customers, consumers, legislators)?
Why are these trends occurring? What’s the root of it?
What major changes will there be?
Are there a combination of microtrends that could influence our business or industry?
What are the trends in our industry?
What is the velocity at which these trends will impact us?
We see many trends today in ag like consolidation, consumer demands for organics or sustainability, but one trend I see coming is the movement to more passive soil testing with rapid results in the coming decade. The trend stems from a few places:
- Human tendency to desire less friction and speed of feedback loops
o Less effort and obtaining the results and resulting information quicker.
- Soil testing is data collection and the holy grail of any sort of data collection is instantaneous, accurate and passive.
- Technology is improving meaning spectroscopy can more accurately, and readily determine chemical and physical soil characteristics.
o Other technology is improving too in terms of being able to stream data to the cloud for rapid processing.
- Soil testing is increasing and the desire to know what’s occurring in fields/in the soil pertains very closely to farm decisions, profitability and sustainability trends.
o Convergence of/cross of other trends
- The velocity may not be rapid, as we know soil testing hasn’t taken off quite like one would expect but factoring in models like Moore’s Law we can begin to assume that within the next 5 years the capability to execute on passive spectroscopy will increase (Like SoilReader).
Stacking these observations together gives the insight into what trend might be developing. Now, the implications of this trend vary by business type, but the focus is on being able to first observe and identify potential trends, and then determine how that will impact your business and what you should do to either defend against it, or take advantage of it.
While this trend hasn’t occurred yet, it is a quick example of coalescing observations into a future prediction.
Dealing with trends and the future is one of the most important roles in agribusiness. It provides the basis for development of innovation strategy and future orientation of a business, from which the search fields and the road map of organizations are derived. If you don't have solid information, a company can find itself succumbing to disruptive businesses. This shows that trend research is an important success factor, now more than ever with the velocity of which new things happen.
Whether you're ready for them or not, trends change industries every day. Knowing what's coming around the corner and evolving your company and industry alongside those changes can keep you competitive. Remember, change brings not only risks, but opportunities.