REINVENTING THE TRADITIONAL SMALL FARM AS A PROFITABLE BUSINESS

FINKENBERG AGRAR

Homepage 2018-04-24T11:20:28+00:00

EXECUTIVE SUMMARY

CURRENT SITUATION

Finkenberg Agrar serves a growing segment of consumers that want to buy regional products. These consumers want transparency of the food production chain and they would like to know ‘their’ regional farmer – ideally in person. They are willing to pay fair producer prices where sustainability and animal welfare are guaranteed.

Finkenberg Agrar is establishing a new kind of agricultural business model that enables small high-tech farms to operate profitably, building on a diversified product range and creating an emotional bond with their customers.

The trend towards the industrialisation of agriculture is irreversible with continuous competition for lower prices. At the same time, there is a trend towards ‘community-based’ production models that achieve scalability through multiplication.

In the context of regional food products, the following problems needs to be addressed:
The term ‘regional product’ is not defined and therefore no guarantee for good quality. It is difficult to find local or regional producers and producers tend to specialise in one foodstuff. As such you need to visit multiple farms if you want to buy your regional products directly from the farm.

Traditional regional farms are popular with consumers, but few of them manage to profit from this trend. They are either too small or too remote to benefit from direct selling. Successful farms are limited in their growth by lack of manpower or problems in succession planning.

A NEW MODEL – FINKENBERG AGRAR

A new farm concept was devised using the Design Thinking methodology. A fantastic customer experience and a convincingly profitable business were selected as critical design parameters.

The Finkenberg Agrar Model aims to establish a chain of small standardised farms in Germany, each catering for 1,000 families (approximately 2,500 people) with a broad selection of regional products sold directly at the farm.

THE FINKENBERG AGRARMODEL GETS ITS INNOVATIVE CHARACTER FROM FOUR ASPECTS OF ITS DESIGN:

A DELIGHTFUL CUSTOMER EXPERIENCE

The farms are designed to delight the customer. Customers want transparency: They have access to the stables and insight into the work processes – there are even offers to join in. Seasonal events such as the harvest festival seek to strengthen the bond to the customer. Shopping is made easy through online pre-ordering and pickup or the delivery service. For the Finkenberg customers, ‘their’ farm is a trusted, reliable provider.

OPTIMISED FARMING OPERATIONS

Although small, the Finkenberg farm functions as a solidly profitable enterprise. The sales per customer are maximised through the broad product range on offer, the direct selling approach and fair producer prices. Compared to a traditional farm, the operating costs are dramatically reduced through process optimisation, sensor-driven automation and energy self-sufficiency. A shared services concept lowers the costs per farm, e.g. via the shared online-shop platform.

INNOVATIVE FINANCING

The acquisition of farming land, modern farm design and modern building technology mandate significant investment of € 8-10 million for each farm. The investment need for 20 to 30 of such farms is pooled and placed on the financial markets as a new class of property investment.

 DEVELOPMENT OF A BRAND

The development of the first 25 Finkenberg Agrar farms across 5 regions in Germany is being implemented as a coordinated project from start to finish. The aim is to rapidly attain the critical mass for building the Finkenberg brand as well as to establish profitable ongoing operations without the need for subsidies.

CALL FOR PARTNERS

The immediate next step will be to confirm the business model through a farm prototype. At the same time partners will be sought for the property investment, the central shared services organisation as well as various agriculture technologies.

TOBIAS REITH

A FEW WORDS ABOUT ME

I am a computer scientist and MBA graduate with 30 years’ professional experience as a business consultant and project manager in Europe, Asia and Australia.

My focus has been the planning and execution of major IT projects in Financial Services with a budget of over € 100 million.

I have been living with my wife and daughter in the Eifel region of Germany since 2007

My contribution to the Finkenberg Agrar model lies in the bringing together of the interests and needs of consumers, farmers, investors and local politicians in order to create a sustainable and profitable agricultural model. Facing the current social and ecological problems in the agricultural sector, I consider the Finkenberg Agrar model to be just as practical as it is necessary. For the project implementation phase, I bring to the table all my experience in large-scale project management.