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www.SugarProducer.com 19 a good cross-section of the agri-food value chain—farmers and ranchers, food company executives, economists, academics—and posed one big question: "Who are the farmers of the future?" The Farmer of the Future In determining which farmers are best set up for long-term success, Sciotto and his team set about dividing the farming population into every conceivable demographic: age, race, education level, geography, acreage, net worth, consecutive generations in the business. Before long it was clear that however they split or rearranged the demographic groups, what truly predicts a farm's future success is the mental makeup of its primary decision-makers. This psychographic segmentation became the first major component of the Farmer of the Future project, and it unearthed five main groups of farmers and ranchers, each of whom approaches the business of farming differently. The groups were dubbed: 1. Independent elites 2. Enterprising business builders 3. Classic practitioners 4. Self-reliant traditionals 5. Leverage lifestylers The Farmer of the Futuer study goes beyond understanding the psychographic profiles that currently exist. Aimpoint Research led wargaming exercises to predict the conditions most likely to define agriculture through 2040 and, in turn, match the farmer segments with the traits needed to successfully navigate those industry shifts. The two most successful groups—the groups Sciotto expects to have successful farms decades from now—are the independent elites and the enterprising business builders. Though each of the five groups has traits it shares with every other group, these two share some critical characteristics—entrepreneurial spirit, high business IQ, willingness to adapt, early adoption of new technology and practices, and optimism about the future of agriculture and their role in it, to name a few. "I would argue that farmers were the original entrepreneurs," says Sciotto. "And it's the entrepreneurial class of farmers who are setting themselves up for long-term success. Some have a high level of energy around that, and others don't. Those who are pushing the hardest for their business to meet the needs of the value chain—whatever those needs may be—are having and will have the most success." Change is constant in this world, and it's always been a part of agriculture. The Farmer of the Future study underscores the wisdom that the food industry will lift up farmers who achieve success far higher than those who struggle and expect to be supported from the outside. "The agriculture industry has to disrupt itself, or it will be disrupted by something else," Sciotto says. "The emphasis in the future will be on reinforcing successful farmers, not trying to reinforce those who are struggling. That's a pretty hard reality, but it is reality. "At the end of the day, it's about food, not farms. The farmers who adjust to that are the ones we'll see succeeding in 20 years." What's Next? As part of the Farmer of the Future study, Aimpoint Research will continue to conduct and refine predictive research on the evolving agri-food value chain. In November, Aimpoint will host a third annual predictive Industry Wargame with leaders across the agri-food value chain. In addition to the Industry Wargame, Aimpoint has also established the Executive Intelligence Network to provide ongoing insight and situational awareness to industry leaders. Those interested in learning more about the Farmer of the Future study or other insights are encourage to contact Aimpoint Research at info@aimpointresearch.com. n INDEPENDENT ELITES • Long-time successful farmers • Driven toward growth of their businesses • Develop strong teams of advisors • Feel secure in who they are and how they run their businesses • Take the long view; "invest their way to prosperity" • Believe their success is completely within their control • Optimistic about future of agriculture ENTERPRISING BUSINESS BUILDERS • The most entrepreneurial group, with highest business IQ • Earliest adopters of new technology and management practices • Highly collaborative • Believe success is fully in their own hands • "If the independent elites are at the top of the hill, the enterprising business builders are charging up after them to lead the industry." CLASSIC PRACTITIONERS • Desire to grow and improve their farm businesses • Lower business IQ • Conservative in adoption of new technology and management practices due to financial struggles • Shorter-term thinkers; tend to bunker down rather than take risks • Less optimistic about future of agriculture and their roles in it SELF-RELIANT TRADITIONALS • Holding on to what they have rather than trying to grow operations • Very conservative in practices • Focus on cost management • Financially healthier than classic practitioners, but not growing to be competitive in future • Rather than expand, they seek off-farm income to keep status quo on the farm. LEVERAGE LIFESTYLERS • Look the part: best equipment, etc. • Love the practice and lifestyle of farming • Overextended and pin blame on outside forces • Pessimistic about future of farming; believe they "did it right and still got dealt a bad hand" "Here's one of the big revelations," says Sciotto. "The leverage lifestylers who are going out of business include some of the biggest farms in the country. In fact, in every one of these segments, there are big, small and medium farms; younger and older producers. A lot of our biggest farms are disappearing, and some smaller farms are emerging like rockets. The psychographics tell a more accurate story about the future than the demographics do." FARMER OF THE FUTURE Psychographic Segmentation of America's Farmers and Ranchers