Ian and Marilyn Lanyon – Simply making tough decisions
Farmers taking action on climate change
Case study 2.1 - Boort
Marilyn and Ian Lanyon are the owners and creators of Simply Tomatoes, a business specialising in gourmet marinated green tomatoes. Marilyn and Ian have not always produced this niche product, but were once one of the largest processing tomato growers in Australia. Stimulated by difficult climatic conditions and tightening profit margins in the tomato industry, Marilyn and Ian focussed on developing new business skills, whilst staying on the farm and enjoying their much loved Loddon Shire Region.
- Diversifying is an option when adjusting to a changed climate
- Think about your transferable business and technical skills and resources
- Research the market when considering new enterprise
Boort is situated in Victoria's northern country and averages about 400 mm rainfall annually. A traditional irrigation region, the pressures on water supply for production have dramatically increased in the last 12 years through ongoing dry climatic conditions. This has caused major rethinking in how farming businesses in the region are able to maintain competitiveness and productivity. Whilst Marilyn and Ian still think that "next year will be right" the cumulative impact of climatic change forced them to make some tough decisions, which thus far have been extremely challenging, yet rewarding.
A long standing share farming partnership came to an end allowing Marilyn and Ian to think about how they could diversify their income whilst increasing their profit margin and reducing their risk. Marilyn and Ian first experimented with sweet potatoes after much research into the industry, typically found in Queensland. With the reinvigoration of the Queensland sweet potato industry and the less than ideal black cracking clays of Boort region, it was decided to investigate another option.
Focusing upon their transferable technical skills and resources with processing tomatoes, Simply Tomatoes was initiated. Green tomatoes are identical to red tomatoes but are harvested at an earlier life stage. The tomatoes are hand processed by slicing and marinating in a simple dressing. The tomatoes are then vacuumed sealed and stored in two large underground containers ensuring that the tomatoes are kept cool in an extremely economical way and omits the need for expensive cooling equipment.
Whilst Marilyn and Ian had a great idea they needed to undertake market research to ensure their product could be sold. A product trial was conducted in local cafes and farmers' markets and confirmed that the green tomatoes were worth investigating further.
How does one go about changing everything they know and starting a new enterprise? Marilyn says "if you have the desire, you need to move forward and get help where you can", and that's exactly what Ian and Marilyn did. Ian says that "Marilyn has believed in what she is doing, believed in the product and never given up". This has proved crucial to the success of their new business.
An important part of business development has been the training and networking undertaken by Marilyn to further her business skills, along with awards strengthening the product. Marilyn participated in an international marketing tour in 2001, visiting Austrade offices in Singapore, Malaysia and Hong Kong. Through the development of professional relationships with key advisors and the employment of a Melbourne based marketing expert, Marilyn was able to quickly learn the business skills required to make this venture successful.
By the year 2004 Marilyn and Ian had harvested their last paddocks of processing tomatoes and began focussing on developing their new business. Green tomatoes are now only harvested from one hectare, with the remaining property given over to dryland cropping. Marilyn and Ian now have a strongly diversified farm income and have sold permanent water to help reduce debt. Whilst selling water was a tough decision they knew that increasing rates associated with the holding were a financial burden, and that the requirements of irrigation farmers were too high for them to desire returning to large scale irrigated tomato growing.
Marilyn and Ian maintain that critical to their success in this venture has been the financial and emotional support of government and industry, staff, friends and family. Marilyn has been the recipient of the Victorian Rural Women's Award and with Ian the recipient of the Premier's Innovation Award for Victoria.
Whilst starting a new enterprise during a drought was certainly difficult for Marilyn and Ian, they are now in an exciting phase of further developing their products and accessing new markets. Over the last few years Marilyn has been actively looking for opportunities to sell green tomatoes in the Middle East, and with the support of the Victorian Government has exhibited at the Gulf Foods Exhibit in 2008 and 2009.
Ian and Marilyn recently diversified their income further through the purchase of a local quilt making company. This purchase has added income security, more employment opportunities in the region and increased the tourism appeal of their property significantly.
Marilyn and Ian say they are "Simple people on a simple farm", yet experience suggests that making the tough decision can pay off both in the lifestyle it can afford and the learning along the way. Ian says "the only thing we have is the dirt", and when you use it smartly its possible to reap the rewards.
Factors leading to business diversification:
- Decreasing cost margin and increasing debt
- Uncertainty about climatic conditions and relationship to income.
- Diminishing water supply impacting on current practices
- Increasing risk and impact of pest incursion ie. Locusts.
- Identified an opportunity and decided to "go for it"
- Now produce only 1 hectare of green tomatoes, which returns a staggering forty dollars a kilo.
- A huge increase from 11 cents a kilo for processing tomatoes
- Remaining 399 hectares of processing tomato land area converted to more profitable dryland cropping
- Surplus permanent water holdings were sold to further decrease debtImproved business skills with out-sourcing where required through employment of marketing professionals to assist with international sales
- Price makers not price takers
View Marilyn and Ian's story in Season 2 of Farmview – our series of short online videos for the Victorian horticultural industries
Planning for diversification into a new enterprise, will involve some first step considerations. The following questions may be useful:
- Is my land and environment capable of producing the product?
- Do I have the adequate water resources? And are they available over the long term?
- What will I do with my existing enterprise? Does the new enterprise add value?
- Will it make me money? How long is the return on investment?
- What further skills do I need to develop?
Marketing new products
When considering the marketing of products from new enterprises, the better planned your approach is, the higher the chances of success. Adjusting your plan is easier than trying to sell a warehouse full of product that no customer finds appealing. Extensive research will be required to get the quality information required to guide your planning decisions. You will need to consider:
- Market research – Use the web, government market statistics and trade events.
- Develop a clear framework – this will help guide research
- Find a target market - and a marketing channel to match
- Market segmentation – understand who will buy your product.
- Product differentiation – position your product and company with clear values and behaviours.
- Collaboration – how can others support your new enterprise? Infrastructure, volume, marketing.
For more information refer to Marketing Agrifood Products or call us on 136 186
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