Issue No 11, January 1999.

NOTICE: Hard copies of the Australian New Crops Newsletter are available from the publisher, Dr Rob Fletcher. Details of availability are included in the Advice on Publications Available.

13. Commercialisation of new crops

[This article by Rob Fletcher originally appeared in the Australian Bushfoods magazine, Issue #8 for July-August 1998 and is reproduced here by kind permission of the Editor:

Ms Sammy Ringer
38 Mountain View Road
Maleny, Queensland 4552
Telephone (07) 5494 3812
Facsimile: (07) 5494 3506
Email: bushfood@hotkey.net.au
Web Site: http://www.hotkey.net.au/~bushfood]

Samuel Johnson once wrote 'curiosity is one of the permanent and certain characteristics of a vigorous mind'.

Unfortunately, curiosity works against our best efforts to commercialise new crops, especially the Australian native species.

Because of curiosity, the first thing we naturally want to do is plant.

It's also one of the easiest things to do.

Once done, we have something to show.

But why plant something if there is no obvious way to make money from the planting? Perhaps we plant in hope.

Our principal motivation for any commercial rural enterprise is to make money.

To plant a new crop species without knowing what the product will be and who will buy it, is not a commercial undertaking but a hobby.

It is more a gamble, with the odds of a pay-off probably worse than those associated with buying a lottery ticket.

This does not mean that new crop plantings do not have any value at all.

They could be useful for aesthetic, educational or ecological reasons.

However, if our plantings are made without any clear idea of the product and its eventual use by consumers, we should not be considering them as an investment with an expectation of future earnings.

Instead, they are a cost against our overall enterprise.

The difficulty with Australian Native species products is they are so innovative and different that the consumer has not yet realised how much he or she needs them.

The commercialisation of innovative new crop products usually suffers because it lacks the internal company support commonly available to innovative manufactured products in the non-rural sectors of the economy.

For example, innovative manufactured products are usually produced by large companies wishing to diversify.

Because of the companies' size, they have other products to support innovative research and development.

Innovative manufactured products are often developments from other products or processes already in place.

On the other hand, new crop products are usually developed by relatively small companies, which depend on the success of the new crop product for their future.

The new crop product is often entirely new in its production technology, such as the methods for harvesting and processing, requiring the development of entirely new technology.

Once an innovative manufactured product is released to the market, initial production levels can be large, supported by a significant promotional effort.

However, new crop products take some time to reach significant levels of production.

One of the biggest problems with promoting a new crop product, is having to guarantee a consistent supply of the innovative product of the appropriate quality, whenever and wherever the consumer wishes to try it.

As a sideline, the initial demand for a truly innovative new crop product can also be misleading since the consumer will often purchase anything which is genuinely unique and unusual and will be happy to pay almost any price to secure such a product.

Once the crop product is no longer unique, the consumer then determines whether he or she needs the innovative crop product, rather than the products which are commonly purchased.

In this situation, the initial prices paid for uniqueness no longer apply and should not be used as a basis for expansion of production.

The Australian Native Food industry has some particularly difficult problems confronting it.

Most, if not all the other successful new crop species recently developed in Australia have had:

• well recognised and established products;
• markets somewhere in the world where these products have been traded;
• well accepted protocols describing product quality and identifying the risks associated with the products' use; and
• long established genetic material suited to the areas in which the products have been previously produced.

The successful establishment of these new crops as commercial enterprises in Australia has involved transplanting the expertise from overseas, with local modification and adaption.

The Australian Native Food industry is facing a range of difficulties.

The innovative products currently on offer are relatively unknown.

The production technology required for the stable production of a uniform product economically is not widely available.

New crop commercialisation must be to make money.

But why plant a new crop rather than the crop all the neighbours grow?

Because we are curious.

The Do Our Own Marketing Research (DOOR Marketing) program for new crops, developed by the New Crops Group at the University of Queensland Gatton College and colleagues in the Queensland Department of Primary Industries and the Toowoomba College of TAFE, aims to direct this curiosity instead, into considering how to evaluate the marketability of new crop products.

It has recently been trialled with members of the Australian Rainforest Bushfood Industry Association at Lismore.

DOOR Marketing has been developed in response to requests from the new crops industry in Australia to assist with the initial planning of new crops commercialisation.

The New Crops Group at Gatton sees marketing research as important in the recommended thirteen step process developed to guide the process of new crop commercialisation:

1. the proposal of the new crop by those willing to commit themselves financially to such development and the identification of the new crop product to be produced;
2. the acknowledgment that new crops research is inherently a high risk venture; those entering new crop production in pursuit of windfall profits in the short term are no doubt seeing this venture as a part of some other financial strategy unrelated to the new crop itself;
3. the recognition of the need to protect intellectual property rights; with so much basic information available from indigenous elders, their involvement needs to be recognised;
4. the assessment of the marketing potential of the new crop product, using all relevant criteria and identifying those criteria for which no information is available; the DOOR Marketing program seeks to assist with this assessment, prompting abandonment of specific projects which have no promise of a marketable product;
5. a theoretical assessment of the production potential of the new crop using all relevant criteria, again identifying those criteria for which no information is available; software such as PLANTGRO or CLIMEX can assist with this process; it is important at this stage that large commitments to production are not made;
6. the establishment of an integrated development group comprising producers, processors, distribution and marketing teams with research providers, initially, in a facilitation role, only; once production begins in earnest, it can be anticipated that research will be required to solve problems which arise and these will be defined by the industry itself; hence the solving of new crop research problems can be put out to tender by the industry;
7. agreement within the development group of resource requirements, expected outcomes, action plans to achieve them, and the manner in which profits will be distributed;
8. the establishment of a process of project monitoring to identify and resolve problems quickly and efficiently;
9. the establishment of economic benchmarks and an agreement to abandon the project once these have not been met;
10. the establishment of a system of review to place on record the circumstances under which the project was successful or failed;
11. trial production for trial marketing;
12. trial production for trial processing and packaging and
13. experimental production.

The aim of the DOOR-Marketing program is to provide members of the new crops industry with a procedure to follow in determining whether a potential new crop product is marketable.

The outcome of DOOR Marketing for each participant is a decision on whether to proceed with more intense (and expensive) investigations into his or her targeted new crop product.

Once completed, participants are in a better position to consider if their favourite new crop product warrants a full marketing plan, and/or a professional business plan or should be abandoned.

The course is designed to encourage participants to formulate their own understanding of possible answers for the following questions:

• What is a new crop?
• Why are we planning to enter the new crop industry?
• How should we choose a new crop?
• How will new crops fit into our current farming system?
• How will we commercialise the new crop product?
• What marketing information do we need to find?
• How will we find this information?
• How will we determine the marketability of the new crop product?

The learning approach adopted during the DOOR-Marketing course is different from a conventional educational course:

• there are no experts, of the kind we know in conventional crops, available in new crops
• all participants, including the facilitators, will be learners, being introduced into relatively unchartered territory
• we learn if the subject matter is interesting and relevant
• we are inspired/motivated to solve new crop industry problems
• we will act on the solutions since we own the process that found them
• all participants, include the facilitators, share the problem solving
• each industry participant focusses on a single new crop, and subsequently a single new crop product to assist the learning process
• competition becomes cooperation
• if the new crop product targeted does not warrant any further attention because it is unmarketable, this is seen as a victory for the participant, who can use the process to pursue other leads.

By this process, we hope to redirect our natural curiosity away from investing in production to investing some time in thinking about what our real purpose in new crop commercialisation is, and how we can achieve it.

The Australian Bushfood industry is uniquely Australian.

Once its products satisfy the needs of the world's consumers, it will be successful.

Marketing is the process of fulfilling the needs of consumers, comprising elements such as product, place, promotion, price, person/people, profit etc. To these we can add the elements of commercialising new crops, which begin with 'C': curiosity, communication, cooperation, commitment, coordination, commercialisation and finally copping out (or celebration).

Contact: Dr Rob Fletcher, School of Land and Food, The University of Queensland Gatton College, 4345; Telephone: 07 5460 1311 or 07 5460 1301; Facsimile: 07 5460 1112; International facsimile: 61 7 5460 1112; Email: r.fletcher@mailbox.uq.edu.au

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originally created by: GK; latest update 6 June 1999 by: RF