When it comes to solving problems and creating a sustainable future, agribusinesses need to connect and collaborate to innovate.
About seven in eight businesses in the Australian food and agribusiness industry are SMEs employing less than 20 staff and, of those, 37% are non-employing, meaning they are owner-operated.
“How do you empower them when they are very small businesses doing everything?” asks Emma Greenhatch, chief executive of the Food and Agribusiness Network (FAN), an industry organisation with more than 300 members across the Sunshine Coast, Gympie, Noosa and Moreton Bay.
With innovation trends ranging from regenerative farming and reducing environmental impacts to serving the increased demand for plant-based food, the food industry has a lot on its, ahem, plate. But the issue is that solutions can be expensive for small businesses alone. Enter the cluster model.
FAN fosters connections that lead to innovation at a product, process and/or business level. It’s where “industry works with stakeholders, including government and researchers, to collectively solve problems and create a bigger pie than what any individual business can do on their own,” Greenhatch explains. “We build ecosystems for our industry.”
Its regular events give members the opportunity to meet and form deep connections, be frank about their challenges and forthcoming about potential solutions. The result is healthy ‘co-opetition’ (a portmanteau of ‘co-operation’ and ‘competition’), which has included everything from new products and co-distribution arrangements to formal joint ventures.
“You see innovation come from when businesses are collaborating across sectors and across the value chain to create some really amazing solutions,” says Greenhatch.
One example is a goat dairy and a rosella grower that worked with a business that had freeze–drying equipment to produce a freeze-dried rosella-flavoured goat’s feta that keeps longer than fresh cheese, showcases native flavours and Australian produce, and is suitable for the export market.
Innovation as a point of difference
Talking to Greenhatch reminded me of a segment I heard during this year’s SofaSummit, presented by Shabnam Weber of the Tea and Herbal Association of Canada.
Weber’s eighth guest is Muskan Khanna of Tea Studio (pictured below), located in the Nilgiris district of India. Tea Studio is a collaboration between Kevin Gascoyne of Canada’s Camellia Sinensis and Muskan’s father Indi Khanna of India’s Tea ‘N’ Teas.
Tea Studio is an all-female factory (to “empower women around the village,” says Muskan) in a state-0f-the-art facility run on LPG. Its biggest selling proposition is that it pays ten times the local price for tea to ensure it can have its pick of quality leaf. But the secret ingredient is actually that she is new to tea and open to trying different things.
“I had no experience or knowledge of tea factories or tea per se. So I learnt everything on the job,” she says. Upon installation of the Chinese-made equipment, two Chinese teamakers showed her how to use the machines and make six teas. In the almost four years since Tea Studio debuted, Khanna has learnt to make 16 through experimentation, including a kukicha-like product using just the stems of the tea plant. “Every day was an experiment, it was a fresh approach.”
Despite having high quality tea, innovative products and a thirsty market, Muskan says there’s more the Nilgiris can do to promote the terroir of their teas. The problem is that 95% of tea production there is CTC (cut-tear-curl), which means consumers don’t consider the Nilgiris the place to buy fine teas.
The answer is a collaborative marketing effort, she proposes: “Somebody else needs to do it apart from us.” There’s no problem finding the market for these teas, she promises, “you will find people who will appreciate the quality you’re producing.”
Collaboration is the most productive way to break down barriers, says Greenhatch. “There’s much more to gain than to lose by lifting the veil. Having resilient and sustainable business models is arguably more important than having just high growth, profitable ones – and it also builds confidence. We can’t underestimate the power of that.”
This article originally appeared in AUSTCS enews 15 June 2021. Mailchimp no longer allows external links to the original newsletter.