The production of products consumers want and delivering them where they want are key agriculture trends entrepreneurs need to pay attention to, says Dawie Maree, Head of Information and Marketing at FNB Agribusiness.
- Ready for the Future? Follow SME South Africa’s 2021 Report to find out the trends that will affect every business owner this year.
Maree on the growing importance of technology as a key agriculture trend and why one should never let a crisis go to waste.
MORE 2021 BUSINESS PREDICTIONS
COVID-19’s Impact on Agriculture
On the positive side, people will still need to eat. Preferences may change, but consumption will continue to be there. The fact that agriculture sustained growth (albeit from a low base) again showed the importance of the industry in South Africa. Both from a food security and employment perspective.
COVID-19 boosted the demand for citrus due to its inherent health benefits. Thus, exports are expected to remain robust in the year ahead as the COVID-19 effect will take time to fade. The bullish production conditions with above-normal rainfall due to the La Nina weather pattern will boost fruit harvest in the new season.
On the negative side, the COVID-19-induced lockdown measures will continue to constrain crude oil demand and help limit increases in fuel prices. This will help soften the blow on the already battered consumer disposable income.
Although the pandemic has somewhat disrupted global trade, the impact on the agriculture system has largely been localised and subdued. This is because most countries have declared the sector an essential service.
However, industries that struggled during 2020 due to the lockdown regulations (e.g. wine, tobacco and hunting), will still struggle to recover in 2021. The economic downturn will also have a prolonged impact on consumer spending and in turn agriculture.
The pandemic elicited some unfavourable trade practices such as export bans to safeguard local supplies and contain prices. This might cause further disruptions to trade flows if the situation persists. Nonetheless, this has been limited to a few countries and fortunately not worldwide.
On agriculture trends entrepreneurs should take advantage of
Technology development. It has been growing fast in agriculture in the past, and expectations are that it will increase in future. Furthermore, changes in consumer demand and the way they shop should be noted.
It is essential to produce products consumers want and deliver where they want. The emergence of food deliveries grew exponentially during the lockdown and will be here to stay.
Also, there are opportunities in agro-processing across the commodity value chains. Entrepreneurs should take advantage of the emerging consumption patterns, service offerings and product diversification.
Issues such as on-time delivery, good shelf life, food safety and packaging will be critical in food chains.
On the importance of tech adoption in the agricultural sector
Online shopping and delivery options, even for fresh produce. Remote working options, obviously where possible. Anything that will improve efficiencies and drive down costs.
Market integration technologies that seamlessly link the consumer, the producer, and the retailer. This will broaden consumer choice, improve service, and reduce cost.
Establish digital data platforms to harvest and conduct analysis of production and consumption trends.
On how to do business in 2021
As the saying goes – never let a good crisis go to waste. There is always an opportunity. Entrepreneurs will know this and capitalize on it.
Both the global and domestic economies have almost been reset, you are not alone. This is an opportunity for an introspection as there are always ample options to diversify your service offering and innovate.