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Farmers Adapt to Changing Consumer Trends
Tim O’Connor, president of the Wheat Foods Council, thinks agriculture gets a mixed report card when it comes to ag’s response to changing consumer trends.
O’Connor has a wide view on this topic. He is currently president of the Wheat Foods Council, a consortium of state wheat organizations and others up the value chain that want to increase the use of wheat. Previously, he worked in the potato and beef industries.
Consumers still want the occasional Twinkie, he says, but there’s no denying they want more authentic food – simple, fresh, unprocessed, and perhaps with a local farm story behind it. “I see a related trend: a larger variety of food flavors,” he says.
These trends are generation-driven, he believes, starting with the millennials. “It’s not only them. There are a lot of baby boomers who are very focused on health and want to stay active. None of us eats steak and potatoes six or seven days a week anymore,” he says.
That’s the point on which O’Connor gives his mixed report. “Many of us in agriculture just want to stay in our comfort zone,” he says. “It’s odd, if you think about it, but farmers are pretty comfortable accepting risk in the weather, or the markets, or even buying the neighbor’s farm. But to grow something different, to meet a new demand? Then we really hit the brakes,” he says.
He hears farmers ask, “Why can’t I sell the same product at the same profit as 10 years ago?” Meanwhile, others willing to try something different are doing fine.
He gives an example from the potato business. “There’s nothing wrong with the traditional russet potato for the french fry market or baked potato or mashed potato markets. But people aren’t eating those as much as in the past,” he says.
Meanwhile, markets are opening for something different as people add new and interesting flavors in the form of ethnic foods, like Korean or Thai. That calls for a smaller potato and opens a door for adaptable growers.
“I think it’s the challenge farmers need to face,” says O’Connor. “Be willing to try something new when demand shifts.”
O’Connor is new to the wheat business, but he says, “As I pushed the potato industry to look for something new, I see some of the same things with wheat. There are new varieties coming, and the whole grain and organic wheat industries are doing pretty well. There are more incredible opportunities coming all up and down the supply chain.”
He thinks farmers will have to decide which track to follow. Some will grow traditional commodity crops and do fine.
“If that is a challenge to your profits and you need more growth and margin, then look for a unique place,” he says. “For instance, I’ve heard about growing organic crops for export. Those who can do it are making good profits.”
He says you could keep 95% of your business in traditional crops, but try something new on the other 5%. You learn how to grow it, then at some point in the future, it becomes 30% or even more. “That’s the direction I’d be moving,” he says.
This article is part of a series titled "Meet Your New Boss: The Millennials."