Millennials and Agriculture: Taking Over the Farm

Millennials are reshaping the produce industry, and it already shows.

Jhonatan Sanchez

Technology savvy and non-conformity are about the few things people agree on over millennials.

"...a huge number of Americans who sometimes seem united only in the dreams of marketers." The New York Times

Millennials are perhaps the most misunderstood generation ever. I should know, I am part of it. However, there a few points in which everyone agrees: it is the largest population cohort in US history and they have lived in an entirely digital age. Even on the actual size of the generation there is a bit of discrepancy. While the Pew Research Center pins the population at 76 million by 2015, Goldman Sachs takes a more generous year range (1980-2000) and reckons Millennials make up a 92 million segment. Also, more than ever, immigration is a powerful generational driving force, contributing to the rapid growth of Millennials. This is particularly interesting for the produce industry because immigrants tend to have higher participation in farming and produce trading. Farms operated by Hispanics rose by 21% from 2007 to 2012, according to the USDA Census of Agriculture. And we are already seeing evidence of their preference for technology. As of 2012, Internet access was 61% among Hispanics and 68% among Asians, 38% and 41% higher than in 2007, respectively.  The Deloitte Millennial Survey 2015 found that millennials in developing economies are twice as likely to be inclined to start their own business compared to their counterparts in developed economies. By extension, this should apply to immigrants from developing countries as well.

There are three clear themes with regards to immigrants:

  • Immigrants are more prone to work in the produce industry
  • They are more inclined to start their own business
  • Connection to their foreign home makes them more likely to engage in import/exports of agricultural products.
Here is a crucial intersection between immigrants and millennials: they are well educated, more travelled, and globally minded. 

There are many more produce businesses, but less farmers.

The combination of these three trends helps explain why while there are more people in the produce industry, the number of farms has decreased by nearly 200,000 from 2007 to 2012, with produce imports serving the increase in food consumption over the same period. Part of the decrease is also due to productivity gains in crops farming. However, this suggests that immigrants tend to prefer produce trading instead of production, focusing on sourcing and distribution, usually from overseas. This poses grave challenges for domestic and regional producers and distributors in the US. We know that the average age of farmers has increased, and it makes sense because most newly entrants to the produce industry are not farmers. 

Farms are looking different too

Traditionally, businesses in the produce industry have taken pride from two sources: how long they have been in business and being family owned. Indeed, the age of a business is usually tauted as a badge of honor. Millennials (the customer) pay less heed to these things, showing more preference for ease of doing business, sustainability, and transparency. Millennials have lived their entire lives in a world in constant, rapid evolution. They are used to things changing drastically every once in a while. While family tradition and deep community ties are universal values, loyalty and brand affinity is of the more ephemeral variety for millennials. To draw a parallel, consider how people initially took to MySpace, then Friendster, Facebook, and who knows where they are now. Same with Altavista, Yahoo, and Google. All in the span of less than 10 years. Look elsewhere and you will notice several industries being radically transformed over a relatively short period (ie. Barnes & Noble/Amazon, airline travel/Kayak, hotels/Airbnb, taxis/Uber). Think these changes don't apply to the food industry? Take a closer look at several startups disrupting food production and distribution. Companies like Instacart, FreshDirect, and even Amazon and Google are disrupting retail and wholesale transactions. Further upstream in the food supply chain, millennials are driving significant changes too. They tend to prefer more principled business, hence the popularity of movements such as organic, local, and CSA farming. Farm to table is another preferred trend. These are hardly disrupting business models, but millennials are certainly more canonical about their preferences. For them, uniqueness is their badge of honor. 
For millennials, it is not just about more technology but how technology is used. Uniqueness is a badge of honor.

How different is the produce industry in the millennial era?

In terms of preferences, millennials are open to new technologies in order to gain flexibility. It is not about more technology, but how technology is used. They shun one-size-fits all software such as Quickbooks or Xero. Millennials want the right tool for the job. But they want value too, they know it makes no sense to pay $25,000 for Famous Accounting where there are open source solutions that work better and cost much less. Millennials are increasingly driving technology decisions at family owned business. In our conversations with customers, more owners of family businesses are referring us to speak to their children to discuss our services. And those converstions tend to go very differently than with traditional businesses. We spend less time explaining what we do and more time discussing how we do it and what additional capabilities we could provide to them. Our solutions make sense to them not because they are disruptive, but because they are an extension of tools they are already using elsewhere (mobile, cloud, SaaS, automation, etc). 
Now more than ever, millennials are on the driving seat of more produce trading businesses. Expect this space to look very different in the coming years.